One Size Doesn't Fit All for Retailers in the Digital Era

The app economy demands more than just simple in-store or online customer experience options.

If retailers only had to establish an online presence to become truly multi-channel in the application economy, success stories wouldn’t be so impressive. The reality is much more daunting.

Meeting the demands of today’s hyper-informed, always-mobile-connected consumers requires retailers re-imagine the customer experience, bringing together the best of both the digital and physical shopping experiences—and in some cases, adding something different than the competition.

“The multi-channel debate is not about having a website and mobile presence. It’s about how creatively you go to market,” said Mike Gregoire, CEO of CA Technologies.

Consider Under Armour and Nike, two companies that have deeply integrated software into the ways customers experience their brand. Under Armour uses fitness lifestyle products like the MapMyFitness app to collect data, which they can then mine to better understand and market to their customer base. And while Nike still maintains a significant store presence, it uses its digital presence to offer customers the ability to fully personalize their sneakers. 

The multi-channel debate is not about having a website and mobile presence. It’s about how creatively you go to market.

— Mike Gregoire, CEO, CA Technologies

From Physical Stores to Digital Experience

Brick-and-mortar retailers used to be concerned about the practice of show-rooming—whereby customers go to physical stores and search online to price comparison-shop and then buy cheaper products online. But customers are more likely to use the web to do their research at home and visit a physical store to purchase their product, a practice that has become known as web-rooming. And many retailers report customers that engage with a brand both in a physical store and on-line spend twice as much.

“Multi-channel shopping is the trend that’s growing the most. People who use more than one channel buy a lot more than people who use just one channel or the other,” said David Blumenfeld, senior vice president of business development at Westfield Labs, the digital innovation lab of Westfield Corp., which owns and operates 34 shopping malls around the world.

To capitalize on the benefits of multi-channel shopping, retailers are exploring how to integrate their products into social media platforms and how to use digital media to maintain and extend customer service.

For example, Nordstrom leverages the Like2Buy platform to make an Instagram photo a tappable advertisement. Nordstrom’s TextStyle messaging app lets customers buy products by texting in-store sales associates. Customers can purchase a product immediately by texting a unique code to Nordstrom, without having to type personal and financial information that the store already has on file.

Retailers are also focused on delivering a seamless digital-physical experience to combine the time-savings and convenience of online shopping with the immediate gratification of shopping in-store.

“Retailers are really scared because they’re not tech companies, they’re inventory management companies. And they need to figure out how to become a tech company really quickly,” said Mona Bijoor, a fashion and Internet entrepreneur known for developing JOOR, an online global fashion marketplace for wholesale buying. “They have all these disparate systems that they need to figure out how to merge into one holistic experience. I think it’s very difficult, it’s very challenging.”

From Digital Shopping to Physical Locations

Originally online-only retailers like Amazon, Warby Parker and One Kings Lane are opening flagship physical stores to offer some of the benefits of in-store shopping.

Amazon’s first bookstore, which opened in Seattle this fall, is a space for trying out Amazon devices such as the Kindle and Fire TV, and it also takes advantage of the vast amount of data that Amazon has amassed about buyer preferences. The books featured in the store are based on popularity on Goodreads and Amazon.com customer ratings.

Today’s mall-shoppers are a different breed than in the past, according to Blumenfeld. Mall-shoppers today have already done their research ahead of time and they are more task-based; it needs to be easy for them to find and buy what they’re seeking.

“There is still an important physical shopping experience that takes place. We very much see it as how do we facilitate that shopping experience both digitally and physically,” said Westfield Labs’ Blumenfeld.

Westfield Labs’ mission is to help the retailers in their malls use digital to amplify the physical. One innovation that they are working toward is an integrated inventory system so that shoppers can know what is available in all the stores in a given mall before they drive there. Malls are also experimenting with other in-store innovations such as curb-side pickup or same-day delivery, find-my-car functionality, digital storefronts, parking lots with fast-pay systems, and dressing room technology that allows you to change the lighting and order different sizes. 

We use technology to take away friction, but software enables human connection in a way that has never been imagined.

— Ron Johnson, founder and CEO, Enjoy

To New Shopping Models

Industry visionaries are even considering innovative shopping models to keep customers engaged.

Formerly working with brands such as Target and Apple, Enjoy CEO Ron Johnson now heads up the company that delivers some of its goods at the same prices as others retailers within four hours of ordering online. But that’s not the only differentiation. Enjoy also sends a product expert to the home of the buyer to set up, explain and train the buyer on their new electronics purchase. Founded in 2014, Enjoy is a brand new model for retail, with no storefronts and very little overhead.


“We provide personal services in the digital age,” Johnson said. “We don’t invest in the store, we don’t rent, and we don’t have loss prevention. We get the same margin as a store, but we invest in a person to deliver your product.”

This shift in investment from physical locations to exceptional service from experts with specific know-how is how Enjoy differentiates itself. It delivers products fast, almost as fast as a shopper going to a store for the instant gratification, but with a unique service.

But Johnson recognizes the store isn’t going away altogether. “People like to go to stores,” but they might also want the convenience of an at-home expert training session with delivery, he explained. The premise is that technology, specifically software, is making more options available to not only consumers but also innovators who might have the next big idea in retail or other industries.

“We use technology to take away friction, but software enables human connection in a way that has never been imagined,” Johnson said.

 

Katherine Demacopoulos
By Katherine Demacopoulos | March 14, 2016

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