It’s been a long time coming, but retailers are finally recognizing that the in-store shopping experience suffers compared to the online shopping experience, and if the exhibits and sessions at the National Retail Federation’s (NRF) Big Show last month were any indicator, 2015 appears to be the year retailers actually plan to do something about it.
The challenge is what to do. Retailers have been trying to throw technologies in stores for decades now, and much of it has met with little success — e.g., kiosks (“websites on a stick”), employee-facing assisted selling (clunky mobile devices that ended up locked in drawers), even digital signage (a two-minute repetitive loop that drove employees insane and did little to drive sales).
This year, the digital signage was interactive. Place a RFID-tagged item on a sensor and the attached display will change the messaging to be relevant to the item. Combine that sensor input with customer awareness (e.g., a shopper who has opted in to be tracked in-store) and the message can not only be customized to the item, it can be customized to the shopper too — e.g., showing reviews from women 40-45 to a 42-year-old female shopper.
A lot of that interactivity was brought into the fitting room at NRF’s show this year. At least four vendors demonstrated both interactivity focused on engaging the shopper and the ability to connect shoppers to employee assistance as needed. The technology enables store associates to not have to interrupt the fitting room shopping process, where the majority of conversion occurs in an apparel retail store.
And then there were the store tours that featured retailers bringing services into their stores, either as one-off events or as long-running investments. These retailers are looking at stores through a slightly different omnichannel lens. If shoppers can get most everything they need without ever stepping foot in a store, why should they bother coming to stores in the first place? To answer this question, retailers aren’t thinking about how to shore up a store’s deficiencies in the shopping process — the kinds of things that fitting room technologies and interactive displays are designed to do — they’re rethinking the fundamental existence of the physical store.
Why does a shopper need to go to a store if she can get everything she needs online? Some people might argue that this question is pointless to ask because clearly consumers are still coming to stores and the vast majority of transactions still happen there. However, just because consumers are coming to stores today doesn’t mean that the channel has something that e-commerce intrinsically can’t compete with. Amazon.com and others are certainly betting vast sums of money that the primary reason consumers go to stores is the immediacy of the item — i.e., they can get it right away. If online retailers can turn a two-day shipping window into same-day delivery or even within a couple of hours, then that immediacy advantage becomes worthless. And indeed, then why does a shopper need to go to a store?
Some retailers are betting on services to draw customers into their stores. This is partly why retailers like Wal-Mart and CVS have experimented with on-site urgent care centers, why grocery stores have banks in them and, increasingly, why lifestyle apparel retailers like Tommy Bahama and Urban Outfitters have restaurants or bars in their stores. Retailers like lululemon and Desigual offer special events like one-time dinners or parties or even free old-school shaves for men.
So, all of this is cool and interesting, but the real question remains: Is it valuable? And by “valuable” I mean, do consumers find this valuable? If retailers go after customer experience opportunities while thinking only about the value to themselves — in customer engagement, more sales or higher profit — they’ll miss the mark. Those should be thought of as outcomes from providing customer value, rather than the outright goal.
I think the answer to this question remains to be seen. Sure, vendors can demonstrate an increased conversion rate for interactive digital displays and smart fitting rooms and employee mobile devices, and the demand for Tommy Bahama’s restaurants has been so big that it’s rapidly becoming a standard part of the brand’s store format, but for the long-term prospects of the store, I’m concerned. Everything at NRF seemed more whiz-bang and eye candy, and not deep enough into really understanding consumers’ needs and designing solutions that meet them.
I guess that gives me something to look forward to for next year!
Nikki Baird is managing partner at Retail Systems Research (RSR), a research firm focused on the intersection of retail and technology. Nikki can be reached at nbaird@rsrresearch.com.