Article

The future of wired retail

Retailers must offer consumers a mix of interactive, self-service technologies or they will be left behind. 

October 28, 2010

By Sam Stein and David Weinfeld, Obscura Digital, Retail Solutions Group.

With tough economic times, consumers have become much more frugal with their spending. Because of this, shoppers are becoming much more educated and informed about products, shopping on a need rather than want basis.

To keep up with this changing face of retail, companies must embrace the new shopper. Today's customers are more technologically savvy, knowledgeable, mobile, time-starved and financially challenged. They have embraced technology as it has become more user-friendly, including smart phones and mobile applications. They have become more knowledgeable through the use of technology by researching their purchases online, via social media with peers, and digitally as they are on-the-go with their phones.

In a 2010 survey of U.S. consumers conducted by Buzzback Market Research, findings showed that 88 percent of shoppers are more likely to choose a company that gives them the ability to interact via online, mobile or self-service technologies. With the modern day consumer more willing and eager to use technology outside the confines of his home, retailers are finding it beneficial to integrate customer-facing technology solutions into their stores.

Technology can be the enabler that facilitates an improved shopping experience. Through advanced analytics and marketing solutions, retailers can deliver the information that shoppers want and need to become and remain loyal customers. Technology enablers come in many forms including customer relationship management, e-marketing programs, self-service kiosks, self-checkout, social media and mobile applications.

Interactive retail signage, in particular, is something retailers have turned to in order to feed the knowledge-starved, modern-day consumer. Interactive retail signage solutions are no longer simple vending machines. They are information hubs and omniscient virtual sales associates.

Using the kiosks, shoppers can browse the online catalog, and then scan the merchandise using the built-in bar code scanner in the kiosk. They can complete an order on the kiosk then swipe their credit card on the kiosk to pay. They also can print a receipt directly from the kiosks, which are integrated with the retailer's e-commerce and inventory management systems.

We are already seeing a number of large brick-and-mortar retailers, across a range of different industries, using interactive retail signage solutions to their advantage. Hot Topic, the popular apparel and music store, has installed approximately 1,500 NCR's Netkey self-service interactive retail signage solutions and digital signs across its locations. Kohl’s, the value-oriented specialty department store, is deploying interactive retail signage solutions throughout its national footprint of stores. After a successful pilot that resulted in heightened customer service scores, Kohl's made the decision to expand the initiative to all of its stores by fall 2010.

The numbers speak for themselves. With North American consumers continuing to embrace self-service technology, transactions at self-service interactive retail signage solutions will surpass $740 billion in 2010.

Beyond the integration of interactive retail signage solutions into store environments, mobile technology is enabling retailers to stay connected to their customers 24/7. Mobile phones play an invaluable role in how we move through our daily lives. More than 53 million U.S. consumers own smart phones. As the technology in mobile phones continues to advance, retailers are positioning these devices to function as much more than extensions of their online portals.

Shopping in tough economic times has made bargain hunting a necessity. But who has time to search for coupons and other promotional deals? Applications like ShopKick solve this problem.

These new applications have the ability to deliver location-based mobile coupons at the exact moment a consumer needs them. With an application like ShopKick, all you have to do is walk into a store equipped with the technology and the system knows you're there. Through push notifications, you receive instant discounts at the right place and the right time.

In addition to mobile's expanding role as a distribution channel for promotional offers, mobile devices are increasingly being used at the point-of-sale. The ease of using one's mobile phone as a transactional tool is accelerating the adoption of mobile payment services.

Now that we have the capabilities to receive coupons and make purchases on our mobile devices, what's left? Phones have GPS to guide us to our favorite malls. Why not be able to access real-time directions to stores inside the mall when GPS is not available?
With indoor positioning applications like Point Inside, this is rapidly becoming a reality. Point Inside uses wi-fi technology to identify your position and give real-time wayfinding directions inside malls and retail stores. The application is an invaluable resource in guiding consumers down the path to purchase.

While digital signage and mobile phones will have a major impact on the future of retail, social media has the opportunity to exceed their reach. Social media can function as a cross-channel platform that connects the consumer to the retailer, and vice-versa.

Social media will be able to improve the retail experience through the use of things such as, but not limited to, the sharing of content, status updates, real-time transaction information, LBS check-ins and the enormous amounts of data that these systems make available.

When it comes to sharing content, there are many ways it can benefit both the consumer and the retailer. For the consumer, a company like Fashism lets you upload photos of yourself trying on new clothing or accessories and getting instant feedback from other Fashism users. Now indecisive shoppers will have the opinions and support of their peers, letting them shop with a newfound confidence.

While social media is great for the consumer, how can retailers take advantage of this? Social media gives retailers the opportunity to garner significant insights into consumer behavior. Retailers can more easily identify their most loyal shoppers. Companies like American Eagle can target the individuals who are likely to generate the most social buzz upon receiving an exclusive offer.

Foursquare is a location-based mobile application built upon checking-in to specific places to collect badges, earn exclusive discounts, and access geo-targeted content. The world of location-based applications is overflowing with information about purchase behaviors and our relationships to specific geographic areas. LBS check-ins provide a gateway into the dynamics of consumer behavior.

The future of retail is one of connectivity and fluid communication. Not only do consumers have boundless access to product information, pricing data and location-based availability, they have the ability to connect their social graphs to the overall shopping experience.