More and more consumers today see the physical and digital worlds as seamlessly connected. Mobile apps, digital wayfinding and online shopping are changing what customers expect from bricks-and-mortar shops.
The question is how quickly retail brands are catching up. That will be the topic of the keynote speech at Marketing‘s upcoming Retail Tech Conference on Oct. 8. Hilding Anderson, director of research and insights at the SapientNitro Research Institute in Washington, DC., will share recent findings about which retail stores are thriving in the digital age and which are falling flat. We asked Anderson to give us a preview of his insights.
You recently completed your second annual In-Store Digital Retail Study: Exploring The Reality Of The Digitally-Enabled Store. You found that while a few select brands have made striking digital enhancements of their stores, most are only taking baby steps. Why is this study important for retailers to read?
There is a huge shift happening in how we shop on a daily basis. SapientNitro is trying to be a leader in terms of understanding consumers and their new expectations, matching that to what retailers provide. It’s a useful foil to understanding the broader landscapeNnt just in retail, but how our broader society is changing. It’s crazy to think the Apple iPhone is only five or six years old and we’re still getting arms around what that means.
You visited 72 brands’ physical stores in the U.S. and Canada and evaluated their performance, augmenting that data with a survey sent to 1,500 consumers in partnership with Ipsos. How did you evaluate the stores’ performance?
We asked ourselves, ‘to what extent are they embracing digital in the physical space?’ The visibility of store displays — could you see them, were they working? We looked at the content, we looked at functionality, and we looked at brand. How well were social tools like Facebook and others integrated into the digital tools? Did they allow you to amplify the voice of the person while they’re in the store? We also looked at omni-channel inventory and fulfillment, which means can you see inventory in other stores while in one store?
One of the other things I’ll be touching on during the keynote session that the research didn’t touch on is in-store analytics. How [consumers] are walking around the store and what their needs are, understanding where they’re spending time in the store, getting improved analytics in the store itself., having sensors on shopping carts.
Do digital improvements correlate to increased store transactions?
ROI is huge question for our clients and for retailers in this space. It’s hard to get a clear answer. We’ve got a number of ways to measure experience, a set of dimensions and ways we use to evaluate a physical space. What we do know is that interactive tools have been shown to increase same-store sales.
One study we quoted in the paper was about Build-A-Bear – when they switched from a typical store to a digital store (with interactive touchscreen stations), they reported a 20% to 30% increase in same-store sales in 2013.
We won’t give away which brands you crowned as excellent (attendees will hear that first hand on Wednesday, though one of them is a Canadian retail star that shows our brands are leading the way). Instead, give us a sense of what is working and what isn’t.
We believe the roles of the physical and digital have permanently collapsed into one. Our perspective is, there need to be better interactive tools in the store today. What you see is that stores are investing in mobile tools, and that makes sense. When people go home, they can still use their mobile tools to shop. We found good improvement there.
What we really had hoped more progress would be made is in touchscreen or some level of interactivity in the store that lets you learn more about the products, that lets you configure the products and have them be shipped to home, that lets you engage with the brand in a new way.
A lot of these retailers are wholly focused on their in-store environment. That’s where their experience has been. It’s an area of change. Not all retailers are in line with that vision. Not all retailers have the expertise internally to do all the technology and the integration work between the digital and the physical.
Can you drive home the reason these costly upgrades are crucial for retail?
Last holiday season, the number of (visits to) stores was down 50% in the U.S. from where it was in 2010. That’s a four-year decline from 35 billion visits down to half that, 17 billion visits. That’s a staggering shift. That suggests that the role of store is fundamentally changing. You need to rethink a lot of the traditional merchandising, even traditional floor plans of the store to make it more engaging, to make it a unique experience and a compelling experience.
Retail Tech takes place the morning of Oct. 8 at the International Centre in Toronto. Tickets are still available.
