The unravelling of the middle class in the US and elsewhere has had a huge impact on consumerism and the retail industry.
Consequently, consumers are being more conservative in their spending, following rising house prices and sluggish economies. Alongside this, technology has greatly impacted the retail journey, with consumers expecting genuine, engaged and “aligned interaction” with stores on every device, both online and in-store.
Technological trends have dictated that consumers are now comfortable with in-app payments and transaction portals such as paypal. Near-field enabled mobile wallet services have been available in Japan for many years, and in the UK since May 2011 but uptake has been sluggish. In spite of this, Western communications companies are using its success in Japan as a blueprint to develop new ways to make purchases on the move, whilst keeping track on spending. The challenge for retailers is to respond to this by providing increasingly useful services that function with all payment options.
E-commerce gets organised
Key to the successful rollout of e-commerce is the organisation of the data. Exponential growth in the types and methods of data-gathering means that fully eighty percent of data gathered by the retail industry has been accumulated in just the past two years, it is clear that retailers have had to be nimble in how they treat the information, given the potential for saturation of negligible, low to no value data.
The information needs to be harnessed and pushed back to the consumer in a meaningful way. A recent KPMG survey showed that after signing up to receive information from a retailers Website, 62% then get a ‘thank you’ email but nothing else.
In this context, retailers need to remember that e-commerce sites are essentially digital storefronts and consumers expect them to deliver similar levels of support as you’d get in an in-person storefront. This ultimately means providing the consumer with as much asymmetry of information as possible.
Interactive experience in-store
IKEA were one of the first retailers to present the concept of a showroom. Retail is about selling first and foremost and selling starts with good marketing.
By creating an in-store showroom IKEA were able to help consumers to dream about their ideal home, conjuring up images that could then translate into the digital showroom, which ended with consumers being able to write out a shopping list for purchases of what they’d just seen.
Interactive experiences in a web-browser are of course notoriously tricky, and just as prone to turning the consumer off as stimulating their interest, but in the interior design space, IKEA has clearly cracked it.
This blend of experiences is what successful retailers are adopting in the digital age. As an example, Waitrose are using Touch4, a touchscreen solution, to enable their customers to browse through thousands of existing recipes via an in-store kiosk. Customers have shown real interest in the solution and basket sizes have increase significantly as a result of this initiative. It requires investment in fairly significant development work, but it’s worth thinking of this as a capital investment for the long term, as m-commerce becomes increasingly more important.
Bluetooth technology is already being used to gather data in physical Apple stores. This deep knowledge is helping retailers to create aligned interaction with consumers both online and in-store. Samsung screens in stores are a growing phenomena.
These increasing attempts to leverage physical space alongside the digital is termed “Shopertainment”, which means the attempt to bring entertaining content into the shopping space. It’s a method increasingly being adopted both in-stores and online by ambitious retailers wanting to provide an end-to-end experience. In some Clarks stores there is now a wall-mounted screen with games and activities aimed at occupying children whilst their parents browse the store.
Retail and e-commerce at home
Consumers often slip between high street shops and online e-commerce. The classic example would be researching products online followed by visiting a store to test a product, finished off with returning to a number of Websites to find the best price online.
Savvy start-up, Metail, have identified the concerns shoppers have with buying clothes online and developed a virtual changing room experience which has been trialled by ASOS and another of other forward thinking retailers. The consumer clicks on an item of clothing they wish to purchase, then put in some information about their body type to then be presented with a model, which can be spun around 360 degrees, to give a really good impression of how the clothes will fit. Competing with games and entertainment online is of key concern, so the virtual changing experience can both solve a problem and make the solution enjoyable.
It’s all about the detail
Knowledge about how consumers interact online is key to e-retail success. Even the smallest difference on a Website can make a big difference to top line growth. Popular features for engaging new consumers include the ability for a retailer to show other customers being engaged, and to show the metrics behind this. This may sound unremarkable, but a big part of big data analysis now is providing clear tools to retailers to make voluminous amounts of intensely varied data readily comprehensible in terms of its market value.
An example might simply be a counter showing how many shoppers are online at any given moment, or where in the world others who are browsing a Website are located.
Recommending other items of interest might seem like a small detail, but retailers cite that even this can make a huge difference to the all-important metric of basket size. Data intelligence, and understanding of how consumers interact can now reach beyond what people say they’ll do, in focus groups, and reports can now dictate what customers will actually do when on a given site.
We’re all in it together
Interestingly, the rise of e-commerce and digital catalogs has resulted not only in changes for retailers, but also in a shift towards more industries being focussed on the e-commerce elements of their businesses. Magazine publisher, Harpar Bazaar now enables online readers to shop directly from their magazine. Even 100% online stores are realising the benefit of owning a physical space; with Ebay launching digital store fronts in the streets in various US cities.
At YUDU we have also helped supermarket chain, Allerhande to develop a digital catalog which works seamlessly with an in-store shopping experience. The catalog is an example of how retailers can make the shift towards becoming media companies; meanwhile publishers such as Harper Bazaar think the money is on shifting towards an e-commerce experience.
If you’d like to learn more about working with YUDU on your Digital Catalog, click here.