The Future Of Retail: ‘Connected’ Consumers Benefit From New Channels

Analysis, eCommerce 2822 views

Omnichannel

Consumers are connected like never before. In a fast moving customer world, where technology is evolving and the customer wants a personal relationship with their favourite brands, ‘always on’ technology makes it possible for consumers to interact with brands in new ways, and whenever they want.

And as omnichannel provides consumers with a seamless experience, how are retailers going to make a profit using the old traditional supply chain? How can retailers remain relevant to the consumer? And how can retailers use design thinking to put the consumer at the heart of everything that they do?

High Street

There’s been a lot of discussion about whether the High Street can survive in its current form or whether it’s doomed to disappear under a wave of online sales, high business rates, expensive parking and the rise of out-of-town retail parks. These are all factors of course, but the biggest challenge facing retailers of all sizes is simply that consumer buying habits are changing rapidly and retailers are struggling to keep up. So can retailers discover new ways of using technology to adapt and survive?

For example, in the last decade, High Street retailers have come under pressure from the phenomenon known as ‘showrooming’, which is when customers buy goods online from Store A via their smartphones, while actually physically standing in (bricks-and-mortar) Store B. How this works is that customers goes into a shop to look at and handle a product that they are interested in, but then browse online to find a cheaper version somewhere else – which is the one that they will actually end up buying.  This sort of behaviour is not going away anytime soon and retailers need to embrace it and see it as an opportunity, rather than a threat, by making the customer experience a whole lot more personal.

Data

A big part of attracting business is by using retail analytics so that everything about a customer, or potential customer, is measured, optimised and custom-made for them in real time to give each customer an individual experience via their smartphones. Whereas shoppers might once have asked a sales assistant to help them find what they want, now the shop can tell them what they want – maybe even before they know it themselves!

Using increasingly detailed data, from demographics and psychographics and by tracking consumers’ clickstreams to find out what they are looking at when browsing the Internet, retailers are starting to create highly personalised offers that steer consumers to the ‘right’ products – or the ‘right’ services — at the right time, at the right price, and in the right channel – a so-called ‘next best offer’.

Amazon was an early online pioneer of this form of impulse buying, using collaborative filtering to generate ‘you might also want’, ‘goes well with…’ or ‘customers who bought this also bought..’ prompts for each product bought or page visited.

Retailers can use splash pages (website introduction pages) to get in front of showroomers who are using their mobiles and promote special offers while they are still standing in the shop, but before they get to the checkout or exit. If retailers can’t compete on price, then they need to offer additional value through calls-to-action at the point-of-sale and on localised media outside the store in order to push out mobile coupons and promotions.

Magic Mirror

Another innovation from the High Street of the future is virtualisation. Most fashion shops will sport a ‘magic mirror’ inside their changing rooms which will let shoppers see how an item they have selected would look when they are wearing it, without them having to make the effort of getting undressed to put it on.

It may sound like science fiction, but it’s already happening. Burberry’s new Regent Street shop includes the world’s tallest retail screen, 550 hidden speakers, screens which turn into mirrors when required and a hydraulic stage for performances. It also features RFID microchips in some items of clothing which, when worn, transform mirrors into screens showing how the clothes look on a catwalk. What Burberry has done is blur the divide between physical and digital; the store was designed to be a physical version of its website. The company is sending out a clear message that it wants to be seen as being in touch with today’s technology and its flagship shop achieves this.

RFID

Advertising billboards (or hoardings) similar to those seen in the 2002 Tom Cruise film ‘Minority Report’, which can recognise passers-by and target them with customised adverts will also be a common sight on the High Street of the future. (You may remember in the film, a billboard calls out to Tom Cruise’s character as he walks past: ‘John Anderton, you could use a Guinness’). And yes, some of these digital adverts are already here now – the Westfield shopping centres and Heathrow Terminal 5 for example – but in the future, they’ll be everywhere.

The billboard does this by using the same kind of wireless technology tags – RFID chips – that are found in Oyster Cards, the travel cards used on London Underground. The billboard picks up data from RFID chips in your mobile phone or credit card to find out your personal details and spending habits and then uses it to target an advert at you personally. Facial recognition technology can also identify the age and genders of passers-by and then use it to tailor adverts to the right demographic – maybe fashion and personal grooming products to teenagers or travel and gadgets to the over 50s.

Connected

Digital billboards are instantly changeable and so can respond to things like changes in the weather, showing summer clothing and suntan lotion in hot weather to jumpers and raincoats when the weather turns colder. What these examples all have in common is that they are ‘connected’ through technology, which links consumers, data and devices together for smarter shopping experiences. They all connect customers from the High Street to online, to in-store and mobile applications.

Understanding the individual customer, offering them personalised products and interactions – so-called ‘me-tailing’– means that retailers shouldn’t view future channels as threats, but opportunities to connect even further with shoppers and deliver what they want, when they want it.

Nicholas Mitchell

Nicholas Mitchell is MD, EMEA, at intuitive customer experience company [24]7. Nick has a background of delivering IT supported, business transformation programs, along with providing differentiated customer service solutions. With [24]7 he works with some of Europe’s most prominent brands to deliver a more intuitive and omnichannel customer experience.