How can retailers better merge the physical and digital worlds? Nicki Sprinz, managing director of digital experience agency ustwo, shares examples from around the world.
During the first lockdown people were happy to ditch old loyalties in the rush online, with 40% switching to whichever brands or retailers best met their online needs, according to McKinsey.
Against this backdrop, all retailers have had to think digital-first about every part of their customer journey – and that applies to in-store too.
At every step in the customer journey, from awareness and consideration to purchase, and on to retention and advocacy, there are points where digital and physical have different strengths, and where a better alignment between the two could significantly enhance consumer experience.
Here are four big opportunities that global retailers are capitalising on:
Opportunity 1: Re-imagining discovery
With stores closed retailers are innovating to give customers new ways of discovering products.
Livestreaming has taken off in China during lockdown. iResearch predicts that China will have 524 million livestream users by the end of 2020, which accounts for 62% of the country’s internet users.
Livestream retail is more than a reinvention of the infomercial or a digital version of QVC.
On a platform like Tmall’s Taobao, viewers can chat, click, buy and share with ease and speed. Livestream retail can also be very creative, with more emphasis on entertainment and engagement, and less on the hard sell.
It also provides jobs, not just for the influencers but for in-store employees, some of whom were re-assigned to livestreaming from home and became celebrities in their own right.
This is a big opportunity for the Western world too. Brands such as L’Oréal and H&M-owned Monki have experimented with livestreaming, which opens up a new discovery channel for shoppers.
Opportunity 2: Re-imagining browsing
In the US, Walmart’s new store redesign is now more closely aligned with the navigation that customers encounter when using its app.
Categories, such as electronics or baby products, are consolidated as they would be on an app and there is clearer signage that matches up with the categories and icons found on the Walmart app.
This creates a seamless experience between the physical and the digital. The result is also pragmatic – providing a speedy and safe service.
Augmented reality (AR) and artificial intelligence (AI) can also help brands transcend the limitations of in-store browsing by taking the physical experience online. MAC Cosmetics, for example, allows customers to try its products virtually via its YouTube channel, and Nike uses AI and AR to help ecommerce users find the perfect fit.
Opportunity 3: Re-imagining the point of sale
New York store Showfields is a next-generation department store that focuses on unique, digital-first brands in the wellbeing, home and design space.
When it reopened after lockdown, Showfields turned to a new app called Magic Wand to integrate the physical store with mobile shopping. Visitors can use the app to engage with brands in store and customers anywhere can book an interactive tour of the Showfields location as well as purchase products online.
Showfields now hosts weekly shoppable livestreams, as well as digital round tables that connect brands with experts. All purchases are contactless and there’s also an option to have goods brought to the pavement outside for pick-up.
Opportunity 4: Re-imagining the experience
If shoppers are to make the journey to store they expect an experience as seamless as the one online, but distinct and special enough to warrant leaving the sofa.
Luxury Shanghai mall K11 has been built around a seamless offline-to-online experience that blends digital touchpoints with a museum, picturesque interior designs, a members’ club and classes covering topics from wine tasting to art history.
The result is a global high-end, Instagrammable lifestyle experience with a community focus that is based around shopping.
K11 is not alone. Other shopping centres and retailers have invested in unique – and very often Instagrammable – experiences.
Look at digital-first brand Glossier. It’s flagship store, which opened in New York in 2018, is designed using its signature millennial pink colour that is omnipresent on its Instagram account.
This makes the store instantly recognisable to Glossier’s army of online fans and the soft hues, accompanied by mirrored rooms filled with human-sized tubes of its iconic products, are designed to be the perfect backdrop for an Instagram post.
In fact, the writing on the mirrors and tubes is even displayed backwards to appear the right way round in selfies.
What retailers should do
Retailers who are serious about being digital-first need to start thinking longer term and upgrade services that enable them to really get to know their consumers, while smoothing the transition between online and offline.
A useful starting point is to dive into retention data from loyal customers to understand what they are doing right, as well as discovering what might have motivated customers to go elsewhere.
Secondly, re-imagine the human experience. Focus on connections rather than transactions. Pay close attention to the drop-off points where friction is traditionally highest, like signing in online or making a return.
Leverage existing communities and networks formed around your product to help customers discover new products and services.
Thirdly, experiment. Try small things and if they work scale them. Effective innovation takes not just one but a conveyor belt of experiments, powered by a test-and-try mindset that accepts some might fail.
Tomorrow’s winners will be the retail brands that find the best ways to meet evolving consumer demands, while also creating compelling and engaging experiences relevant to today’s new retail context.
Experimentation may sound risky in the current environment, but those who are willing to try will have a better chance of longer-term success.
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