As much as it has already changed, the in-store experience is poised for increasing digital transformation. That’s according to a recent Forrester report on the state of the digital store, which said that digital is expected to influence nearly half of U.S. retail sales by the end of 2016 and as much as 55 percent by 2020. These findings should come as no surprise to retailers working to merge the digital world with the physical retail experience.
The effect of digital technologies on consumer behavior and expectations is vast, said report authors Adam Silverman and Lily Varon. However, the report admitted that obvious success stories are limited, as retailers are still in the experimental stages of these digital enhancements.
Customers are spending more time pre-shopping online with search engines, Web sites and smartphones; thus, the store is no longer the dominant destination for researching and purchasing. In turn, online retailers like Bonobos and Warby Parker are establishing physical entities that focus on engagement and service, while both adding revenue and working as a branding tool.
The report, which is an update to one that was published in 2014, in addition to outlining how digital technologies are influencing brick-and-mortar shopping trips, also shed light on the opportunities for the in-store experience.
“The rapid integration of omnichannel initiatives such as inventory visibility, coupled with new advances in order management and analytics,” the report stated, “provides physical stores with unprecedented opportunity to marry the online and offline experience to revolutionize in-store shopping and the role of the physical store.”
Among the opportunities that Forrester found was the ability to implement Web-style analytics using Wi-Fi, Bluetooth beacons, video and GPS to understand and serve shoppers and the recommendation for stores to make better use of smartphones, from both the customer standpoint and by allowing store associates to assist customers in-aisle. The study found that 60 percent of U.S. online adults expected mobile-device-equipped associates to be able to look up product information, 59 percent expected associates to be able to check store inventory and 37 percent expected to be able to checkout in-aisle.
To serve online customers, retailers are increasingly using stores to pack and process online orders. By fulfilling online orders from stores that are close to the customer, the retailer reduces shipping times and boosts revenues. According to the study, Target fulfills online orders from 450 locations and one of out five Kohl’s customers who pick up online orders in store bought something else once they were in the store.
Finally, Forrester reported that interactive touch screens, gesture-based displays and augmented reality were all options for enhancing the customer experience.
Still, due to the experimental nature, retailers face a number of challenges in adoption technology. Ultimately, Forrester recommended an informed and cautious approach; “technology can be enticing,” the analysts wrote, but said that ultimately, retailers should “avoid the temptation to jump headfirst into developing expensive virtual fitting rooms or AR displays without clearly defined objectives.” In other words, they recommended that the experience break down so-called “friction points” in the purchase cycle, and that potential technologies be tested before full implementation. The report also recommended that brands incentivize store managers to adopt the technologies, and that the new services connect with existing enterprise systems.
“Undertaking piecemeal, custom integrations for each in-store touchpoint,” the report said, “is neither scalable nor cost-effective.”