How Digital Disrupts the Store Visit
by Frances Yu
 
 
Shopping has truly changed in the past 5 years.  When I look at my own shopping habits, I can see how much it has evolved. I buy my books from Amazon, which is delivered to me by a reshipper.  Sometimes I buy a Kindle book, which is delivered to my iPhone in a matter of minutes.  I have multiple options for apparel, which includes my favorite stores locally or re-sellers who advertise their wares on Instagram and deliver them to my doorstep.  I also check online for the latest styles and merchandise in my favorite stores abroad.  Shopping, for me, has never been easier and more convenient.  This is a direct result of the emergence of various digital technologies.
 
In the early days of online retailing some experts predicted the demise of the physical store.  Retail sales online hit 1.5 trillion in 2015, which represents 7% of total retailing sales worldwide.  While this number is enormous, it points to the continued strength of the brick-and-mortar retail as well as consumers’ appetite for purchasing in-store.  The earlier predictions of online sales replacing in-store shopping did not materialize as the store continues to be the center of the purchase journey.
 
However, the onset of digital technologies has changed the way customers shop the store.  Here are just some of the ways that digital has forever changed the consumers' shopping habits.
 
 
Downward Pressure on Prices
Through smart phones, consumers can now research and compare prices across stores in real time.  It is almost impossible for retailers and producers to maintain a significant difference in prices on widely distributed commodities.  This price transparency will serve to drive down prices among competitors.  This also means that shoppers are less impulsive in their purchases.  Many consumers research online before purchasing a product in-store.  On the other hand, many also look in-store and decide to purchase these items online.  The consumers of today are empowered and demanding as they leverage greater visibility into better product availability and pricing among retailers.
 
Walmart, the largest retailer in the world, has capitalized on this price transparency in order to strengthen its value image.  The retailer provides a mobile-friendly store and free Wi-Fi for its customers.  It also lets shoppers compare the price of their products with those of their competitors.  If a customer is able to find the same product at a lower price, Walmart guarantees a price match.
 
 
The Rise of the Experiential Stores
As online shopping continues to grow, the physical store will need to focus on creating unique, brand-defining experiences that keep customers coming back.  Consumers want shopping to include entertainment, education, emotion, engagement, and enlightenment.  People go to a retail store to see, touch, and feel.  It's a place to buy, a place to stimulate, and a place to create new possibilities in the eyes of the shopper.  Experiences create value for customers beyond the products or services that companies happen to sell.  And consumers are willing to pay an increasingly large premium for the extra value represented by experiences.  Properly executed, customer experience can be the biggest point of differentiation from competitors and is the remedy to commoditization brought about by product and pricing visibility.
 
Consider the experiences provided by the likes of Starbucks, which has successfully created a "third" place (neither the home nor the office) where patrons can connect, bond, or just relax by themselves.  Its customer service principle of "connect, discover, and respond," makes customers feel that they are not just another impersonal order, but a human being who matters.
 
Krispy Kreme, on the other hand, has successfully wrapped experiences around its products through its doughnut theatre, which allows customers to experience the entire process of the making of the freshly baked Original Glazed doughnuts.  Krispy Kreme is not just a manufacturer of doughnuts, it is a multi-sensory, interactive experience that drives a deep emotional connection to the brand.
 
Omni-Channel
Today's consumer is fully immersed in digital technology and is connected 24/7.  As such, they expect the same of their favorite stores. The store's boundaries have extended beyond its four walls to include online presence, catalogs, virtual stores, pop-up stores, and in-store kiosks.
 
Tesco, for example, has begun to experiment with virtual stores located in subway stations.  Customers can use their smart phones to shop by scanning product bar codes.  Peapod, the US's leading online retailer has done the same by placing virtual grocery stores in Chicago's highly traveled subway.
 
With the rise of omni-channel retailing, the demand will be for connected, consistent, and customized experiences across devices.
 
 
In-Store Technologies Will Enhance the Shopping Experience
In-store technology will help customers enjoy a more personalized shopping experience via customization options, fit/size scanners, and fitting rooms outfitted with touch-screen connectivity to request different sizes or items, social networking via live video and virtual try-on options. 
Augmented reality allows retailers to conduct immersive product demonstrations in virtual worlds, or to give tours of virtual showrooms.  New projection technology allows retailers to combine physical products with digital media, including images, video, audio, text, and even tweets, without the use of a touch screen.   
In-store technologies will help create a more efficient and engaging shopping experience, via such options as holographic sales assistance, smart carts, product and information access kiosks, interactive digital media and messaging, biometrics and other forms of instant payment.
Kate Spade has introduced shoppable construction barriers.  The pre-opening installation, before the store has even opened, has consumers getting excited and interacting with the brand in a formerly unproductive space.
 
Digital technologies are not gimmicks, but about solving problems and adding value to the customer--added convenience, enhanced experience, more relevant products and services, among others.
 
In all this, the true winner is the empowered consumer.  Digital technologies have allowed her to wield more clout, become more informed, and more demanding.  She is always on the look-out for new products, experiences and services uniquely suited to her tastes, interests, and aspirations.
 
Are the retailers today ready for this new consumer?
 
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Frances Yu is the Chief Retail Strategist of Mansmith and Fielders, Inc., the only advocacy-based training and consultancy firm focused on marketing, sales, strategy and innovation. Write to mentors@mansmith.net or visit www.mansmith.net for more information.