How To Enhance Retail Customer Experiences With New Technologies, Part 2

A Conversation Between A Retail Maven And A Technology Futurist

Industry News, Mobile Apps Comments (1)

This is part 2 of last week’s blog post, How To Enhance Retail Customer Experiences With New Technologies, Part 1.

Today’s in-store retailers face substantial competitive pressures from online e-commerce. Without the cost of building and maintaining “brick and mortar” outlets, online sellers are able to offer merchandise at significant discounts. Yet despite this advantage, most consumer retail sales occur in physical stores. Float Senior Analyst Gary Woodill (GW) spoke with retail maven and Float Director of Sales Colette Young (CY) in the second of this two-part series about what online and ”brick and mortar” retailers can do to enhance customer engagement using new information technologies.

GW: So is there anything a store-based retailer can do to enhance customer engagement and boost sales in a physical store?

CY: Well, the use of mobile devices by consumers has become ubiquitous so the strategic availability of mobile apps and websites can further enhance the retail customer experience, giving store-based retailers useful tools to counter competitive pressures from e-commerce. Studies show that over 57% of shopping is done on a mobile device, and responsible web and mobile is emerging as a necessary strategy.

Right now, I am really interested in augmented reality for retail. There was a great article recently in VentureBeat that discusses some of the industry trends, and there are several retailers that are brushing the surface here, but I don’t really think we’ve capitalized on how valuable an AR tool can be. According to the article, a chart Digi-Capital released suggests that the market for augmented reality commerce alone will reach between $10-20 billion by 2020. I’m interested in seeing how technologies like Tango, Oculus Rift, or HoloLens assist in the customer during the trial phase. My buddy, Healey Cypher, created a company called Oak Labs, where they have magic mirrors in fitting rooms. To take this a step further, imagine their mirrors syncing into the store’s planning system to better understand the analytics behind a customer’s purchase. Just imagine if you could eliminate the errors of a complex installation, when fixing the errors in the first place not only loses you money, but costs you 3 times the amount to fix – what happens to your bottom line? Imagine what would happen if you were a retailer and could reduce the amount of returns through accurately suggesting a piece of clothing or make-up before you left the store? Float is currently working with a list of enterprise retailers to solve these problems.

GW: Some of the tools Float uses with clients include various emerging mobile wallet systems that allow payment from mobile phones, loyalty programs based on near-field communications (NFC), mobile self-checkout (SCO) apps where customers scan products as they shop, the delivery of offers to shoppers’ smartphones when they are near a product, store maps that orient shoppers and locate items for them, and in-store m-commerce for items not in stock. Retail mobile technologies can be used for store operations, as well, including compliance management, performance support, or mobile learning and onboarding for staff, to name just a few possibilities. But perhaps the most powerful application of mobile technologies in retail are those that enhance customer engagement.

While many retailers are experimenting with branded native mobile apps, it can be difficult to get consumers to download them and keep them on their phones. With over 2 million apps available in the various app stores, how can retailers get their apps noticed and used?

CY: The majority of e-commerce companies are mobile-first because they think they can successfully scale their business that way. But there is a problem here in that app store optimization (ASO) doesn’t work in the same way as search engine optimization (SEO). Most online e-commerce businesses succeed due to SEO, but this doesn’t work in the mobile environment because of the way that app stores have been set up. While ASO helps increase downloads from an app store, it doesn’t help you go back later and order the white T-shirt through a native retail app when you need one. So you need a different strategy for the mobile world. FarFetch is a company that gets this. Starbucks is a good example of how a company has leveraged loyalty and payments through a mobile app to get repeat users. Everytime I use their app to pay for my drink, I get points, that in return, turn into free drinks. It’s easy to use and I get something out of it.

GW: One alternative is mobile web-based apps that work on any device and can attract new customers by sensing their location, and make targeted offers when they find a potential customer near a store. Patagonia has gone this route, ditching their mobile app in favor of a highly responsive mobile website.

CY: Yes, location-based solutions are critical for both mobile and desktop environments. Sephora does a great job with in-store mobile-based payments and the use of beacons. They know when a customer walks through the door, and if they have the Sephora app, they can send that customer a specific type of message or offer through an enabled beacon notification on their mobile. I think beacons work for specific retailers, but not all. It’s important for retailers to ask whether this type of activity is going to enrich their consumers shopping experience or not.

GW: Once in the store, a variety of new technologies can enhance customer engagement. Tablets can be strategically placed around the store to provide specific additional information, such as product materials and construction, manufacturing sites, and availability of sizes.

CY: I remember going into the AllSaints store in SoHo years ago, and they seemed to be one of the first retail stores to roll this out – and not just for store associates. They did it for the customers to check stock through their stores inventory system, as well as their online stock through these strategically placed iPads mounted to fixtures throughout the store. This is a great idea, but it hasn’t fully caught on yet. Starbucks and Target were both early adopters of the Apple Pay option, making frictionless checkouts. Now, even grocery chain Whole Foods has adopted this and has seen significant growth. Also, Zara recently released that they are going to be rolling out self checkout kiosks to all of their stores globally.

GW: Consumers may enjoy reading a story or seeing a movie about the product, especially if it features a positive side of the retailer or manufacturer, such as how they show social responsibility in their procurement practices or donate to local causes. A retailer like Story in Manhattan is a good example of how retailers can use the power of narrative to enhance customer involvement.

CY: B Corporations, which are certified for accountability, social sustainability, and environmental performance standards, are a big thing in retail right now. Examples include Toms, Warby Parker, and Patagonia. Patagonia’s consciousness is engrained into their business model. For instance, every time they learn something new about their product and how it impacts the environment, they make a change to that product and their market share and sales increase. They even created a documentary called Worn Wear, which encourages people to think about the durability of what they buy and to repair, gift, or recycle their clothes, so the stories live on. That’s just smart business.

Another company that I admire that showcases radical transparency is Everlane. They provide detailed information and costs on every step of the manufacturing process, so the consumer knows where they are getting their merchandise from. Even an enterprise like Target is handpicking a collection of 21 brands that give back to the community with their Made to Matter initiative. Nike has also gone from being nearly crucified, to doing more for manufacturing workers than just about any other global player out there.

GW: If retailers want to move customers back to shopping in stores, it appears that they will have to embrace many of these new technologies and practices.

CY: You’re right. I’m happy to say that these are some of the things that Float is working with right now, ready to be deployed as the retail environment shifts into the next level of digital transformation.

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Gary Woodill is a senior analyst with Float, as well as CEO of i5 Research. Gary conducts research and market analyses, as well as assessments and forecasting for emerging technologies. Gary is the co-editor of "Mastering Mobile Learning," author of “The Mobile Learning Edge,” and the co-author of “Training and Collaboration with Virtual Worlds.” He also presents at conferences and is the author of numerous articles and research reports on emerging learning technologies. Gary holds a doctor of education degree from the University of Toronto.

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On July 13, 2016
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