New technologies are helping retailers create a more personalized and seamless shopping experience.
When it comes to modern-day shopping, consumers have naturally assumed a hybrid approach: They might start their research on a retailer’s website or read online product reviews, but then visit a store to get a better sense of a product’s look, feel and fit. Or they might start at the store and then later buy a product online. This means retailers have to be smart about giving consumers the experience they want as well as where and when they want it.
To achieve this, many retailers are rolling out innovative technologies that add value to the in-store shopping experience. From wireless beacons that send promotions to nearby shoppers’ smartphones to augmented-reality apps that let people visualize how furniture will look in their home, these new tools make shopping in physical stores more interactive and fun.
“It’s a new paradigm, and retailers are starting to embrace it,” says Dana Telsey, chief executive and chief research officer of Telsey Advisory Group. In addition to stores being purchase destinations, they are also often used as “showrooms” where customers can get a hands-on product experience. Retailers must consider ways to add value.
““A customer used to go to the store,” Telsey adds. “Now the store also has to go to the customer.””
RETAIL’S DATA REVOLUTION
New technologies allow retailers to give their shoppers a more personalized and rewarding experience. Interactive shelves—which display product information on demand—can help shoppers identify merchandise that fits their needs. Augmented reality allows shoppers to virtually “try on” clothes or see how a paint color looks on their walls without having to guess. These technologies can gather data that can help shoppers keep track of their preferences while also providing valuable information to the retailers themselves.
A smart mirror, for example, makes it easy for shoppers to “try on” apparel, a hairstyle or makeup virtually without actually having to put them on. The session is recorded by video cameras so the shopper can easily remember and review what they tried and how it looked. On the flipside, the retailer can keep track of what products shoppers are most interested in—providing valuable data for their marketing and merchandising teams to harness both for online and in-store purposes.
Melissa Gonzalez, founder and chief executive of The Lionesque Group, which creates pop-up retail experiences, uses the example of trying on lipstick at a cosmetics store: “Say I want a new lipstick, but I don’t want to go to the store counter and test five different colors. Now, I can stand in front of a smart mirror and see the makeup virtually on me. I might try 10 colors instead of five because this innovation has made it so simple.”
“Adopting the right in-store technologies allows retailers to learn more about consumer preferences to create a better holistic shopper experience and, in turn, increase brand loyalty.”
Michael Brown, partner in A.T. Kearney’s consumer and retail practice, increasingly sees this innovation around mobile applications designed to simplify the shopping process for consumers. “You can build a shopping list at home, then when you get to the store, the app will navigate you through the aisles in the most efficient route possible,” he says. “It’s about providing customers with the convenient, information-rich experience they get online in store.”
Likewise, location data provided by offering free Wi-Fi or using wireless beacons can provide retailers and shopping centers with useful shopper analytics, such as how much time a shopper spends in a store and which parts of the store or shopping center they spend the most time in.
UNDERSTANDING CUSTOMER EXPECTATIONS
A critical first step to using technology to connect with customers is understanding the customer, Gonzalez says. “When we’re thinking through store experience and technology integration, we keep in mind that what appeals to Gen X versus Millennials, upper Millennials versus younger Millennials, is going to be different.”
Lionesque recently opened a pop-up store for a cosmetics company in New York City with a younger target demographic, creating age-appropriate interactive moments.
“In store, customers can get into a bathtub, play with bubbles, make music videos, post them on social media and send them to all their friends,” Gonzalez says. “That’s something that’s going to speak to them.”
In contrast, Gonzalez points to a store opening in Chicago that speaks to an older Millennial and Gen X market with more of a sophisticated experience and a higher price point. “There are still engaging moments, but the tone is more earthy and serene,” she says.
A HOLISTIC EXPERIENCE
Many retailers also find that online shoppers still seek the convenience and other tangible benefits of physical stores as well. Consider this: 48 percent of shoppers have ordered goods online and picked them up in store; 37 percent of shoppers use the internet to locate or research items, but prefer to make in-store purchases; and 35 percent of shoppers have ordered online and returned purchases in store.
That said, a recent survey from the International Council of Shopping Centers shows that many consumers—particularly today’s Millennials—desire a tech-rich in-store experience.
“About 88 percent of Millennials have at least one retailer app on their mobile phones, and 86 percent access those apps at least once per week.”
Moreover, 87 percent of Millennials have used a “click-and-collect” feature in which they made a purchase on their mobile phone but picked up their order in person.
Providing this type of seamless shopping experience to customers is key, says Valerie Richardson, senior vice president of real estate at The Container Store. “Every retailer is trying to figure out how to best serve the public,” she adds. Her company has rolled out several in-store innovations in recent years, including voice-controlled wearable devices employees use to efficiently help shoppers find merchandise or check the status of their orders. The Container Store’s smartphone app also has a “click & pickup” service that lets shoppers buy goods online and get same-day drive-up pickup. The retailer also offers custom closet planning through its in-store, in-home and online custom-planning services.
“Because digital technology is now the dominant mode of expression, we’re looking for ways to leverage that technology to change the way we sell, serve and speak to the customer,” Richardson says.
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Shopping for the Truth aims to dispel misperceptions about the state of brick-and-mortar retail. ICSC has partnered with WSJ. Custom Studios to explore industry data, talk with leading retail experts and provide an engaging look at how shopping centers continue to thrive by evolving and better serving their local communities.
WSJ. Custom Studios is a unit of The Wall Street Journal Advertising Department. The Wall Street Journal news organization was not involved in the creation of this content.
