Transformation of Brick & Mortar in Support of Digital Experiences
The e-commerce industry has grown at an explosive pace in the past few years, with sales amounting to more than 1.2 trillion US Dollars in 2013. As e-commerce and mobile-app sales increase, retailers are looking for ways to creatively entice shoppers to shop in traditional brick and mortar stores. Both online and in-person, brands are embracing digital transformation across all touch-points and placing big data front and center.Here are a few trends to be on the lookout for:
Facial Recognition
Facial recognition software is becoming more widespread, with cameras placed strategically to identify shoppers throughout their in-store experience. When existing, potential, or VIP customers are registered on the software, a sales person will be alerted and can steer customers toward things they think will be interested in. As for how the software registers the common shopper's face? Stores will use the Facebook profile pictures of people who 'like' them on Facebook or who enroll in an account through the retailer, likely enticed through a discount deal. Facial recognition software is also being used to spot known shoplifters.
Beacons
Accessed through apps that the user has downloaded, beacons in retail will use GPS to alert the customer of sale items, coupons, and research about a product, using bluetooth to communicate to a shopper's smartphone. This fall, Macy's committed to installing iBeacons in all of their stores nationwide and retailers like American Eagle and Kohls are following suit. As discussed in a previous post, iBeacon has the potential to evolve into everyone’s personal shopper, delivering an engaging and entertaining shopping experience that fosters customer retention. The data from test runs has shown that we can expect to see more and more beacons popping up this holiday season. According to a survey by Swirl, a marketing company, sixty percent of shoppers opened beacon-sent messages, and over half of those surveyed said they would do more holiday shopping at the stores as a result of their beacon experience.
Digital Kiosks
Shopping malls are transforming the shopping experience with "Connected Malls". Simon Property Group and eBay Inc. have collaborated to develop six-foot LCD digital kiosks equipped with interactive services to help shoppers navigate shopping using 3-D maps and coupons. After being prompted to input their phone number, shoppers can get mobile notifications of events and deals happening that day. In the pilot mall in Palo Alto, the digital kiosk units went live just before Thanksgiving and "already [have] had 40,000 unique interactions, and 17,000 routes have been mapped" said Mikael Thygesen, Simon Property Group's chief marketing officer. Providing mapping information in 3-D allows for a more robust shopping experience and reduces the friction of shopping in person.
Billboard Shopping
For those who can't be bothered to step into a store, PowaTag has created pop-up virtual storefronts around New York City through Dec. 21, that allow shoppers to scan tags on billboards and bus shelters to purchase 2(x)ist's men's underwear using their smartphones. Alternatively, they can also purchase 2(x)ists through 60 second video advertisements that have been placed in nearly 8,000 taxicabs in Manhattan. Comptoir des Cotonniers initiated a similar campaign this summer using PowaTag across nearly 10,000 "virtual boutiques" across France for the ultimate omni-channel retail strategy.
Retail Trend vs. Robust Strategy
Although adoption of digital has increased among fashion brands, L2 research found that only 25% of brands in the Digital IQ Index: Fashion have at least one omni-channel feature, and only 10% are using them in combination. As we've seen with brands such as Warby Parker, Bonobos and Rent the Runway, there is testament to maintaining an in-person store to solidify the brand and shopping experience. In order for retailers to truly transform with digital and sustain a competitive advantage, they need to design a sound digital strategy that is in line with brand and consumer expectations.