Hybrid retail experience of the future

Building an effective omnichannel retail strategy, which unites user experiences from high street stores to mobile-browsing and everything in-between, continues to present a challenge for brands and retailers

Research shows consumers still value different ways of shopping and brands that do not engage with customers at every opportunity risk losing sales.

A report from retail property specialists Revo, with research by consultancies CACI and GlobalData, found that while sales are growing faster online, 86 per cent of total sales involve a physical store either directly or indirectly, compared with just 14 per cent purely online.

However, most retailers still operate online and offline in completely separate silos, or focus primarily on one or the other. But with a plethora of choice at a customer’s fingertips, brands can no longer rely on inertia for sales, and must have an offering on each channel that is unified, exciting and, above all, relevant to customers.

“If you’re not relevant, consumers can quickly go elsewhere and some of the big brands are struggling because no one feels passionate about them,” says John Zealley, senior managing director and global lead of the customer insight and growth practice at consultancy Accenture.

According to Mr Zealley, brands need to embody both purpose and personality to draw in consumers. “The first step is to create a business that fundamentally means something to people and they buy fully into its values,” he says.

This is a concept that arguably started with The Body Shop, he notes, but brands such as Nike, which has reinvented itself for consumers serious about sport, now embody well.

Along with a robust value proposition, which offers more than simply many things for sale in one place, retailers need to incorporate responsive innovation and intelligent interaction both on and offline.

“Retail of the future is about holistic experiences, as well as taking the best each shopping channel has to offer and bringing them together; that is the interesting evolution of omnichannel,” says Stephen Hewett, vice president, head of retail customer engagement and loyalty at consultancy Capgemini.

Companies can attract customers to stores by offering unique and personalised experiences that showcase their products and can’t be had online.

“There is a huge amount of latent engagement with consumers to be had. Retailers can make room for wine bars and places for people to sit and experience the products on offer,” says Mr Zealley.

For retailers, this might mean having fewer but better shops, or specially selecting in-​store merchandise to display based on ongoing trends or the ability to purchase personalised products.

Many brands are already doing this well. Nike’s five-​story, 55,000sg-ft store in New York features a mini in-​door basketball court and a shoe bar where shoppers can personalise a pair of Nike Air Force trainers. At premium winter clothing brand Canada Goose, customers can try on jackets in specially created changing rooms at temperatures as low as ‑25C.

In fact, the Customers 2020 study by Walker, a consumer intelligence consulting firm, says customer experience will overtake price and product as the key brand differentiator by the year 2020.

Retailers can make room for wine bars and places for people to sit and experience the products on offer

John Zealley, Accenture.

Good customer experience can also include incorporating the perks of both online and offline shopping in both channels. For example, when customers browse clothes online, an algorithm might make outfit suggestions.

Pete Ballard, chief executive at Foolproof, a global experience design agency, says this service can be replicated in-​store using technology such as near-​field communication chips on pricing labels. When scanned on a smartphone, the tech will flag matching items or even enable the shopper to choose a model with a similar body shape to see how the item might look on.

“The benefit of the online experience is brought in-​store and coupled with the strength of being in the shop, such as touching and feeling the fabric and seeing its quality,” says Mr Ballard.

Retailers can use technology to reduce known in-​store-​shopping pain points for customers, such as offering home delivery and mobile payment to avoid queues.

In China, mobile payments apps such as WeChat, which operates in physical stores via QR codes, have been a huge success. Transaction volumes via WeChat went up from $11.6 billion in 2012 to $1.2 trillion in 2016, according to KPMG.

Conversely, Argos has had success offering a click-​and-​collect service and last year launched a partnership with Google Home so shoppers could reserve items for in-​store pick-​up using a voice command.

Whenever a customer interacts digitally with a product, whether in-​store or online, it can provide retailers with new insights, for example to offer better, more comprehensive loyalty programmes that function both in-​store and offline, says Mr Ballard. “This can create a two-​way dialogue rather than a piece of static plastic in a purse,” he says.

IT network integrator LAN3 install smart wifi for retailers that can alert the store manager if a VIP customer walks in, so the they can greet them by name and improve their experience or even create personalised offers.

The future of retail is multichannel and experience driven, yet ultimately it still focuses on understanding what the customer wants and giving it to them, says Martin Newman, founder of The Customer First Group.

“As long as what is being offered is relevant, consumers will be open to it because it provides them with value, whether it is a discount or good content or a useful service,” he says.

Capgemini’s Mr Hewett agrees. “Retailers need to understand a customer’s behaviour and who they are, because real customer insights can transform into real benefits. Cracking this will make the people who shop with you continue to do so,” he concludes.