This article is part of our November 2018 series about the state of retail. Click here for more.
A structural shift is transforming retail.
That shift is e-commerce, which is forecast to become the largest retail channel on the planet by 2021. Add to that enhanced services, such as same-day delivery offered by Amazon, Deliv, and Doorman, and it’s easy to see why some traditional retailers are scrambling to keep up. And that begs the question: Can they stay relevant and grow in the age of digital disruption?
Of course. Technology might have created some headwinds, but it is also an enabling force that can be enlisted to create engaging in-store experiences, compelling, personalized touch points, and enhanced transactions.
Reimagining The Customer Experience
In his 1999 book on consumption behavior, sociologist George Ritzer coined the word “retailtainment.” He defined it as “the use of ambience, emotion, sound, and activity to get customers interested in the merchandise and in a mood to buy.”
That observation is even more compelling in today’s one-click world, where the attraction of a real-world experience must overcome the simplicity and convenience of a digital click. As humans, we are still compelled to seek out experiences, which leaves room for physical interaction with products and services even in our digital-first world. Immersive technologies like augmented reality (AR) are being used for this purpose, deployed to make the in-store experience much more personal and brand outreach far more captivating.
Immersive experiences are admittedly still experimental and require some basic affinity for technology, so one’s brand promise and customer segmentation must be considered before adding AR into the marketing mix. But doing so can create novelty and drive traffic in an increasingly crowded retail landscape.
A good example is Nieman Marcus’ Memomi Memory Mirror, which allows customers to try on makeup in different lighting and without having to use unhygienic testers. The mirror has a built-in screen and camera to give shoppers 360-degree views of outfits and even do a side-by-side comparison of several outfits.
Walmart, too, is reimagining its in-store experience by letting customers use their iOS devices to scan products on Walmart shelves (right) for up-to-the-minute pricing and customer reviews.
And Timberland created a crowd-scale AR game (video below) in Madrid to launch its newest hiking boot. The game dropped a large boot into a crowd, and the audience was encouraged to jump and gesture to throw the AR boot back up into the air. The boot reacted in real time to their movements.
Finally, Nike’s NikeiD service, available since 2007, now uses an AR experience to help customers completely personalize their sneakers.
Personalizing Touch Points
“Personalization is not a trend. It is a marketing tsunami.” So said Larry Light, a veteran marketer and professor at Harvard Business School.
Indeed, advances in technology have unlocked once unheard of abilities to reach individual customers with customized messages and offers at just the right time. Woven together between physical and digital touch points, retailers are now experimenting with all kinds of novel approaches to personalize their experiences.
For example, U.K. retailer Very does a weather check at a user’s location to present climate-specific offers on its website’s home page. Sounds basic, but how many retailers with seasonal offerings do that?
In a seemingly counterintuitive move, online retailer Bonobos has been opening brick-and-mortar Guideshops so that customers can be personally assisted in picking the right size and fit of clothing before ordering online.
Innovating At The Transaction
The point of sale and delivery have historically been mundane parts of the customer journey, but a lot of exciting innovation is happening here, especially in food retail.
Self-serve kiosks, for example, are becoming more prevalent and, combined with mobile wallets, can speed customers through their transactions, not to mention offer upsells and other messages in real time, based on a customer’s history with that retailer.
McDonald’s, for example, has been experimenting with self-order, self-pay kiosks for some time.
Additionally, as more vehicles incorporate digital touchscreens, food and beverage retailers will be able to create digital ordering experiences right inside of them. Companies such as Dunkin' Donuts are already doing so.
2019 Planning Tips
These examples are all promising, but how can you determine whether they make sense for your own business and brand? Here are a few key considerations to evaluate as you chart a path into 2019:
1. Understand your customer journey touch points: Are they digital, physical, or both? What are the critical elements that create loyalty for your brand, and how can you amplify them?
2. Delight and surprise your customers: How are you creating novelty so that customers look forward to interacting with you over and over again?
3. Make each customer’s journey unique: Have you assessed your personalization strategy this year? What areas need rethinking? If you don’t have a personalization strategy, now is the time to formulate one.
4. Remove friction: If your customers bottleneck at the point of sale, how can you incorporate mobile payments, kiosks, etc., to streamline that touch point? Is delivery optimized? Does it make sense to consider a delivery service partnership?
There is clearly a lot of innovation happening in retail. Of course, no technology will fix a broken retail experience or brand, but consider whether these technologies make sense as enhancements to amplify your relationship with customer and to create more traffic, loyalty, and ultimately revenue.