When a shopper peruses a web site or casually strolls through her favorite department store and makes a purchase, she likely has no idea of the data-driven technology behind that transaction.
This story first appeared in the June 8, 2016 issue of WWD. Subscribe Today.
Whether it is in store or online, today’s omnichannel shopping experience is a complicated affair for retailers and brands that involves product sourcing, inventory management, trend forecasting, consumer behavior analysis, data management, marketing, employee training, visual merchandising and e-commerce fulfillment, among other variables.
The technology behind retailers’ drive to create a so-called seamless shopping experience includes everything from capturing transaction data and predictive analytics to iBeacons and cloud-based marketing campaigns. Yet many companies — especially fashion apparel retailers — aren’t using some of the key technologies or services available.
For example, SAP offers a retail software solution that helps inform marketing and merchandising strategies via planning and analysis. SAP for Retail also helps retailers manage inventory across the supply chain; conduct procurement; manage human capital, and manage financials, among other tasks.
Retailers are using predictive analytics from companies such as First Insight Inc. to bring products to market that resonate with consumers, which reduces inventory overflows and increases gross margins. Other companies such as RetailNext are working with using various in-store technologies to measure foot traffic as a way to create better floor plans to maximize sales productivity — and bolster profits.
All of these innovations are deployed in the name of creating a better in-store — and online — shopping experience. Michael Klein, director of industry insights, retail at Adobe, said the innovations available today are partly driven by consumer demand, but also due to advances in the technology itself.
“Consumers are looking to technology to provide seamless experiences while saving them time,” Klein said. “Retailers have always had to deal with digital disruption for over two decades now, which is driving innovation.”
And despite what many observers are saying, physical stores — and department stores in particular — are not dying, although they face fierce headwinds. “Whether it’s online or in store, consumers will always want to see, try, feel merchandise before they buy it,” Klein asserted.
The challenge for many retailers is creating a compelling enough reason for shoppers to head to the mall. Ike Boruchow, senior analyst at Wells Fargo Securities, said last week that May traffic saw a deceleration for the third straight month. Citing data from ShopperTrak, Boruchow said retail traffic was off 10 percent in May on a year-over-year basis — despite the arrival of warmer temperatures, which followed below-normal averages so far this spring. “Thus, the retail malaise cannot be entirely blamed on weather,” he said.
So what is to blame? Maybe retailers themselves need to take a close look in the mirror and ask if they’re using the tools available in the right way.
“Technology adds an additional excitement and convenience to shopping experiences,” Klein said. “But it’s not just technology and consumers driving new innovations in online and in-store retail. The retailers themselves have a vested interest in shaping these experiences.”
Klein said, for example, that if a shopper opts to share location information, “retailers can use iBeacons and other digital shopping technologies to offer content that is hyperpersonalized for that customer.”
“Data that’s captured and analyzed through these in-store and online experiences can also drive dynamic pricing, inventory management and even help shape store layouts, product placement, and more effective visual merchandising,” he added.
As for shoppers, what exactly are they looking for when they go to a physical store? According to a white paper published last week by Synchrony Financial in collaboration with Forbes Insights, a positive omnichannel shopping experience requires the very best retailers can offer — online and in stores.
The white paper showed that 82 percent of consumers polled “conduct research online for major purchases,” while 46 percent said they make the actual purchase in the store. Forty-five percent of respondents acknowledged that “closing the sale for a major purchase online” is a challenge. And 38 percent of those polled said “the biggest reason for in-store visits is to be assisted by friendly and helpful associates.”
Regarding that last point, Klein said offering a personalized experience in the store is critical. “Its importance can’t be understated,” he said. “Personalizing the shopping experience in store is necessary for winning and retaining customers beyond price differentiators. What retailers need to keep in mind, though, is that they need to personalize the experience at every touch point, anonymous and known customers.”
Klein said companies tend to focus their personalization efforts online and via loyalty programs, which is good, but they do so while neglecting their mobile commerce, for example. Klein said solutions such as Adobe Marketing Cloud can help tie together marketing efforts across all touch points.
Amit Sharma, founder and chief executive officer of post-purchase experience platform provider Narvar, reiterated the need for personalization. He also noted the importance of mobile devices as a bridge between the online experience and the in-store one.
“As mobile continues to dominate digital media consumption, brands are more thoughtful about how they engage with customers on the go,” Sharma said. “The most admired brands realize that mobile can be the bridge between customers’ experiences online and in store. A customer can browse in a store and later order her product via mobile, or she can purchase a product in a mobile app and pick it up in store. Taking it one step further, the mobile channel can be effective in engaging a customer even after she leaves the store through demo videos and relevant instructional content.”
Sharma challenged the industry to reconsider its prime nomenclature. “The rise of digital shopping has transformed the traditional definition of a store,” he explained. “‘Store’ no longer refers to just bricks-and-mortar or an online portal; rather, it’s a reflection of a shopper’s entire experience. Customers now expect brands to tie together all of their physical and digital interactions into a cohesive experience. This means retailers must now apply attention to every unique moment in which a customer engages with the brand, from when she’s browsing — whether online or in store — to when she’s waiting for a product to when the purchased product is finally in her hands.”
Sharma said Sephora “does this exceptionally well.” He said when shoppers are browsing in store, “customers can interact with store associates to browse items, have makeup tutorials, practice applying products and interact with shoppable screens. Sephora mirrors this experience online through ‘how-to’ videos, offering virtual try-ons, and creating a community board where shoppers can ask questions and provide answers.”
Sharma noted Sephora’s seamless customer experiences extends “through the post-purchase experience, when customers can view relevant product video content while also tracking their package.”
Maintaining that seamless experience by leveraging various technologies while also using data to manage inventory and analyze trends helps to set the stage for better sales. But also offering a personalized approach in the store or on a mobile device or web site is what solution-providers say will seal the deal — and convert shoppers and browsers into buyers.