Retail customers like browsing online, but they prefer to purchase items in physical stores. That’s the finding of consumer research presented by Tom Bullotta, managing director at Acumen Solutions, at LiveWorx.
The death of brick and mortar stores at the hands of their online counterparts has been a plotline for over a decade, but it’s turning out those fears are overblown.
Instead of preferring one experience over the other, consumers have created their own hybrid model that blends online and onsite shopping. With unlimited search and comparison resources, it’s no surprise that 80 percent of customers prefer to do research and browsing online. But of those shoppers, 75 percent prefer to purchase in-person at a physical location.
This desire to combine the tactile, emotionally engaging experience of onsite shopping with the research power of the Internet is manifesting in consumer’s smartphone habits.
Fifty-six percent of shoppers use their phones inside a retail store for activities related to shopping. As smartphones and the mobile web have improved user experiences, this trend will grow.
Smart, forward-thinking retailers are already taking advantage to create a smart, connected ecosystem. The result enhances the customer experience blending the best attributes of physical and digital shopping.
I recently covered the potential competitive advantage that IoT offers physical retail stores, and at this week’s LiveWorx event, IoT solution providers put some exciting retail shopping apps on full display. IoT firm Kalypso provided a real-time demonstration of how these apps are already redefining the shopping experience.
Courtesy of a smartphone or other connected touchscreen device, branded retail apps leverage customer proximity, past behavior, and shoppers’ interaction with inventory, to blend physical and digital shopping.
Take the example of a browsing customer who is in a store looking for a specific jacket; a jacket is available, but only in black, and in the wrong size. Previously, that would have been a dead-end, and the shopper would have left empty-handed. But with the right shopping app (built on an IoT infrastructure), a consumer can scan the tag, and initiate an inventory search across the retailer’s complete organization. Even if that size-medium green jacket the shopper wants is in a freight container crossing the pacific, the app allows ordering or reserving it.
The same demonstration brought a traditionally online experience into stores: the infamous price match. Picture the same shopper, finding the right jacket in the store, but the price is a little high. Historically, shoppers might go home and search for the same jacket at a lower price; they might even conduct that search in the store, using their phones. In this situation, a mall retailer essentially sets up the sale made by an online competitor like Amazon.
All retailers prefer to get list price for their inventory, but price matching allows a business to move inventory, keep some margin, and remain competitive. Price matching has been difficult to provide in physical stores. But using a smart app, shoppers can again scan a bar or RFID code to initiate a search for a cheaper instance of the same product. Using logic, the retailer’s system can decide whether to price match, by offering to discount the difference.
In addition to improving the customer experience, app-enhanced shopping helps create a more managed conduit of shopper data—data that gets converted to valuable information for improving the customer experience. Buyer profiles, shopping history and other data that’s been difficult to aggregate and act upon, can now be more easily used for marketing, customer management, and even inventory and ERM.
For instance, if there is an inventory surplus of a type of hat, a promotion can be triggered by a purchase, alerting the shopper via their most trusted personal device, the smartphone.
These experiences, when thoughtfully planned and effectively executed, not only make onsite stores more competitive, they strengthen customer relationships and build trust.
This combination of online and in-store resources creates a shopping experience that gives another edge to physical stores. While it’s so far been difficult to bring the physical experience into shopping online, it’s become the de facto reality that customers are bringing the Internet with them into physical stores.
As the Internet of Things connects the digital world and the physical world, the barriers between brick-and-mortar stores and online retailers are dissolving.
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