Consumer adoption of digital commerce, a great opportunity for the store
In today’s new retail landscape, synergies between offline and online channels of a merchant are ubiquitous.
Click & Collect (pick-up in the shop of an order placed online) is now a must-have service for any brick & mortar’s e-commerce given its rapid adoption by shoppers and uplift effect on basket value. According to Forrester, a third of customers collecting orders in store make an additional impulse purchase.
Another evidence of the value of the store in digital commerce is Amazon’s recent announcement to launch its first physical outlet in New York City, a revolution for the global e-tailer.
Every time FNAC opens a new store, its e-commerce website sees a surge of traffic coming from the new shop’s area.
Today, a third of Fnac.com’s revenue is related to the physical store in one way, shape or form. The online channel itself accounts for 13% of Fnac’s turnover and its integration to the store is ever present: floor staff is trained and commissioned to assist shoppers to buy online when they can’t find products in the store. Each shop now offers a much greater inventory than it can physically carry (including goods from marketplaces), which allows the brand to open smaller outlet formats and cover a much wider footprint.
Another illustration of the line blurring between the two worlds is the uptake of in-store connected devices, whether fixed (tablets, digital walls and kiosks – self-operated or assisted) or mobile tablets equipping shop staff. Sales associates of Burberry, a pioneer of store digitizing, are greeting and assisting customers through a personalized experience using a clientelling iPad application (see our related article). John Lewis Partners, equipped with tablets, completed 10,000 in-store transactions for customers in 2013.
According to a Forrester study, researching products via digital touchpoints generates 5 times more revenue in store than it does online.
Connected customers are developing new ways of shopping. The store can significantly gain from this trend given the unique advantages it offers: proximity, convenience, immediacy and hands-on experience.
Transforming the store to capitalize on digital opportunities: where to start?
Finding and implementing the right renewed role(s) for the store in a multichannel ecosystem is everything but a simple process. Effectively connecting the point of sale typically requires a series of interdependent projects, which for some can be lengthy and expensive.
This could start as simply as offering free in-store wifi, a quick and easy way for a retailer to convey a service-friendly image and observe shopping behaviours whilst developing the right digitizing strategy.
If connected stores were to offer customers two things and two things only, it ought to be Choice and Experience.
Connected consumers increasingly expect to be offered the choice of researching, trying, collecting, returning etc. virtually any product of the catalogue through any convenient channel/touchpoint. All this in a consistent, compelling and rewarding experience, in line with their expectations of the brand.
What is essential to realize is an e-commerce channel and a physical store do not replace or compete each other, they complement one another. Pushing this concept a notch further, where the actual purchase takes place is secondary. Whether the transaction occurs at the cashier, on the online store or via a mobile app should in fact be of little importance, as long as the sale takes place.
Understanding customer motives and developing a progressive roadmap
Once the retailer has made its peace with this concept, it is “just a matter” of determining how the store would add the most value to its connected customers and then “setting” it into a configuration that would facilitate the delivery of that value.
It all starts with (re)developing a clear understanding of the (target) customers: who are they and what are their objectives and expectations? With clear personas established, the crafting of tailored customer journeys can then begin, where all pertinent touchpoints and channels, should be considered.
Implement customer-centric journeys, meaning taking into consideration customers’ constraints and facilitating their everyday lives.
The actual feasibility should be addressed by developing a progressive multichannel roadmap, tied-up to stringent ROI criteria and in line with retailer’s internal change capabilities. Given the number of possible touchpoints, prioritizing in-store innovation is a must and here too, project ROI should lead the way. It is important to bear in mind foundation layers (an e-commerce website or at least an online product catalogue) are typically required to unlock the full potential of the connected store in an omnichannel setup.
A smart way to venture into store digitizing could therefore be to reuse existing assets or past investments, and measurably demonstrate the impact on store sales (on average basket, purchase frequency etc.). A first project could for instance leverage the company’s Product Information Management system (PIM) or the data gathered from a loyalty program.
Creating a familiar universe
An important factor to successfully blend physical and digital sales channels is to create a single universe, in which the customer would seamlessly navigate. Achieving this requires sustained efforts and deep pockets, as this paradigm should not only extend across channels, but also across touchpoints.
In practice, this implies a customer should in many cases navigate as logically and easily in the shop as on the e-commerce website. Likewise the use of a mobile app should find its natural place in the customer journey, for instance to research/review a product in the shop or contact the customer centre.
Prefer target audience relevance and execution quality over broad digital innovativeness
If allocated budgets are tight, the rule should actually be: less touchpoints, but of better fit for the targeted audience (and execution quality in case of a strong brand).
Be mindful of broken promises by not ensuring continuity between touchpoints.
A shop that would deploy digital attractors to catch the attention of by-passers but would neglect to follow-through inside the store with innovation augmenting the shopping experience ultimately stands the chance to deceive customers (see our article on Hollister Dubai).
Conversely, introducing a mobile app allowing consumers to check product availability in store, reserve an item and avoid queuing through mobile payment in the store is likely to be perceived as a real enhancement to the customer journey.
Regardless of the chosen solution, the level of integration into the organisation and operations, and the internal adoption/endorsement by the various teams will greatly influence its chances of success.
Ripping the full benefits of merging physical and digital is likely to require implementing a CRM program in parallel to build better customer knowledge and effectively influence multichannel shopping behaviour. This is essential to deliver a personalized in-store experience and convey a sense of recognition and reward no online pure player can match (see our article on customer recognition).
La Fnac, de l’agitation à la transformation – lesechos.fr
Data Insight Online Purchase InStore Pickup – forrester.com
How do you quantify the influence of digital on physical store sales? – Michelle Beeson’s Blog, forrester.com