On Way to Omni-Channel, Retailers Try Beacons and More
Location-based technologies, mobility and targeted marketing are part of retailers' efforts to become an omni-channel enterprise.
Bringing diverse e-commerce and brick-and-mortar businesses under a single umbrella as an omni-channel enterprise is a complicated exercise, one that involves uniting a number of back-end and in-store technologies. But companies are forging ahead, and experimenting with emerging technologies like beacons as they do so.
The omni-channel trend is accelerating with the increasing penetration of mobile devices, more powerful mobile browsing capabilities and mobile apps.
According to a July 2016 survey by the Periscope unit of McKinsey & Co., in-store shopping still dominates (for 83 percent of U.S. consumers and 77 percent in the UK), but online purchases are growing (59 percent U.S., 55 percent UK).
Retailers are striving to make in-store experiences more engaging, in an effort to reduce "showrooming," a practice in which consumers visit a physical location to check out merchandise but ultimately buy online from a competitor.
They are looking to beacons, virtual reality and other emerging technologies that convert shoppers to buyers, even if the purchase comes later via the retailer's online channel, says Walker Sands Communications in its Future of Retail 2016 report.
Bring on the Beacons
Macy's, Target and Lord & Taylor have all rolled out beacon technology to improve the customers' in-store experience. While the technology is in its infancy, there are encouraging signs for further uptake.
Walker Sands research shows that the majority of consumers are open to the location-based technology if offered the proper incentives. So while more than 60 percent of shoppers say they are not currently receptive to push notifications from retailers or in-store mobile tracking, two-thirds (67 percent) say it could improve their in-store shopping experience; in most cases, a discount or better in-store experience would persuade them to give the technology a try.
Currently, only 6 percent of consumers have used in-store tracking technology through beacons. However, among shoppers who have never used beacons before, only 30 percent say they will never opt into the service, according to the Walker Sands report. When asked what would cause them to opt in to in-store mobile tracking and push notifications, consumers cite discounts (61 percent), loyalty rewards (47 percent) and faster checkout (34 percent).
Mobile's Retail Momentum
"The real opportunity is mobile leading retail," says Rob Murphy, vice president of marketing for Swirl Networks, provider of a mobile presence platform, and one of several executives who have touted a mobile-first strategy as the key to omni-channel success.
"It's a great connection between the physical and the digital. Most people have a mobile device in their hands. With the technology available in the phone, you know when the consumer is in the store, what items they might like (in-store or online)," Murphy says.
When it comes to location-based smartphone technology that would improve their in-store shopping experience, consumers point to coupons (52 percent); additional information, including product content and reviews (36 percent); and indoor store mapping showing them aisle layouts and product locations (30 percent).
Only a third of consumers (33 percent) say they're not open to any location-based store technology, according to the Walker Sands research.
Using Location Data
With the data available from mobile devices, in-store point-of-sale systems and online ordering and social media sites, companies can build personalized offers for customers that distinguish one retailer from another.
For example, Johnston & Murphy, a shoe and apparel retailer based in Nashville, Tenn., used its backlog of offline customer data, including in-store purchases, to make targeted cross-sell offers to customers of its physical stores and its website. If customers had routinely bought shoes but not apparel, they received apparel offers which could be redeemed online or in the store. The cross-sell offer paid off, with a 19 percent improvement in the add-to-cart rate.
For retailers to successfully leverage customer information in-store, however, sales associates need to enjoy access to the same information customers do. An increasing number of stores provide employees with tablets to access this information as well as enterprise-wide inventory details, says Lauren Mead, vice president of marketing for TimeTrade, a provider of appointment scheduling software.
Seamless Customer Experience
Today's customers shift from device to device to make purchases, with some combination of in-store examination of goods (when practical), online/mobile research and online/mobile/in-store purchase, says Lucinda Duncalfe, CEO of Monetate, a provider of marketing software. So all customer touchpoints need to be consistent and engaging.
"Brands need to make sure that the marketing on their mobile site is just as compelling as the coupons found in store," Duncalfe says. "By creating a seamless experience, customers are more engaged and thus more likely to make a purchase. We firmly believe that experience is the best way to engage with potential customers. Giving customers what they want at their fingertips, no matter what the platform or store they visit, is huge."
That means seamless data collection across channels, yielding information that can be integrated with marketing, inventory and other systems across the enterprise.
However, to implement an omni-channel experience that bridges the online and in-store experience, retailers must first earn the trust of customers to use the information gathered online and through mobile device data or location-based services, Periscope points out.
Sixty-two percent of U.S. and 60 percent of UK respondents do not want their online and offline information to be connected to optimize the shopping experience -- something that is a necessity to provide these features, according to Periscope.
To convince customers to allow their information to be connected, brands must use data properly. That means sending customers personalized marketing messages on a schedule they are comfortable with, for example, not emails about every promotion – unless they’ve indicated they want emails about every promotion.
Pricing is one area that appears to impact trust, according to the Periscope research, with over half of consumers getting frustrated when they see products that are priced differently on- and offline at the same retailer (54 percent in the U.S., 55 percent in the UK).
Channel Usage and Spending
Retailers need to better align their channel spending and consumer channel usage, retail experts agree. Though some major big-box retailers promote "buy online, pick up in store," only 2 percent of consumers currently use this service, according to the Periscope research.
Additionally, many retailers still find their physical footprint is too large. Sears, for example, has closed numerous Sears and Kmart stores while also selling off its Lands End unit. Several published financial articles suggest the company isn't through with its downsizing.
Retail experts agree that the development of omni-channel strategies are still in their earliest stages. New technologies, shifting consumer buying habits and loyalty/customer retention programs will continue to shift those strategies in the future.
Phillip J. Britt's work has appeared on technology, financial services and business websites and publications including BAI, Telephony, Connected Planet, Independent Banker, insideARM.com, Bank Systems & Technology, Mobile Marketing & Technology, Loyalty 360, CRM Magazine, KM World and Information Today.