Retail is moving from location to attention and experience to engage with the use of technology to meet customers’ expectations. The retail industry is undergoing a big transformation from retail ‘apocalypse’ to retail ‘renaissance’ to achieve customer centricity.
A digital experience is an interaction between a user and an organization that is possible only because of digital technologies. Retail in-store digital experience refers to the use of technology between the consumers and the organization that assists in the process of purchase. It can be a QR code for placing an order in restaurants to a completely digital store like a grocery store with minimum human interaction.
A recent Harvard Business Review article also shared that “while e-commerce will continue to be an essential element of retail strategy, the future success of retailers will ultimately depend on creating a cohesive customer experience, both online and in stores”.
Various studies prove that today's customers like the digital experience and the flexibility offered by them. Digital trend report from Adobe highlighted in its 2021 report that, “how omnichannel strategies that embrace both digital interactions and traditional retail environments are crucial for success, and how organizations need an integrated technology that enables them to combine a growing range of data sources to form a single view of the consumer.”
Even after so many advancements in technology one might wonder why to open a physical store. The reason is simple, to use emotions and human contact to create a memorable experience that fuses the digital advantages in the physical environment and gives a seamless experience while shopping and browsing. The ever-evolving consumer behavior is accelerating the shift to ‘digital’ giving a rise to the new ‘Phygital Stores’.
A blend of the physical and digital experience of shopping aims to combine the unique aspects of browsing or e-commerce in the real world to improve customer experience as well as sales revenue. Phygital is a way to accomplish an immersive brand experience that cannot be had online. Retailers need every tool in their arsenal to listen to their customers and understand how best to optimize and take advantage of their time in the store while meeting their ever-changing needs. India is growing fast technologically, retailers have to ensure how to make the customer a part of it, deliver the right message at right time, and allow the customer to touch, feel, and engage with the products.
The desire to buy from physical stores will increase by reinventing convenience, insight, engagement, and social interaction. Greater personalization and digital self-service will not only shape the future of retail but also make retailers more focused with a 3600 view of the customer. Not only can location services help identify someone who walks into your store, but it helps fuse the brick-and-mortar and digital channels. It’s the time of interconnectivity, in-store people, mobile people, and online people don’t exist anymore.
Undoubtedly consumers are more demanding and forcing retailers to take the shopping experience to them. Retailers need to use digital technologies and adopt new methods to interact with customers in the store itself.
A recent survey by Chase Design 2022, mentioned that “For retailers, they have to maintain and even boost their expertise in e-commerce and omnichannel in the context of their physical stores. It’s about having the right information presented to shoppers through the use of apps, QR codes, AR and VR, and other digital tech, so the in-store shopping experience can be as dynamic and convenient as online experiences.”
A Digital Blueprint with Physical Connections
Not so long ago (let's say two years ago) e-commerce and digital were primarily used to teach consumers how to shop in stores, but that has changed. Digitalization is now taking the lead, and brick-and-mortar operators must learn how to complement their shopping excursions that begin online. As connected platforms and ecosystems unite e-commerce and brick-and-mortar stores, technology choices have short- and long-term implications, so companies need to be smart and they need smart partners. Some retailers are already using on-demand companies and cloud-based logistics such as Instacart, Lyft, and Uber, in addition to established couriers such as DHL and FedEx. This is an area where retailers are using disruptive digital models to their advantage.
Brick-and-mortar stores aren't going away; they continue to be an important part of the retail mix. According to International Data Corporation (IDC), “56 percent of retailers consider their store formats and chain brands to be among the top three assets for digital transformation. This can be a competitive advantage, allowing retailers to build on their existing preferred in-store technologies such as point-of-sale (POS) tools, queue management, and in-store Wi-Fi”.
Forrester Research reports that online conversion rates increase by 10 to 30 percent when retailers can ship from their stores. Additionally, the buyer expects order fulfillment execution to be one of the biggest drivers of his loyalty to the brand through 2020. It's time to think digitally and make the most of physical trading.
Future of Shopping
In-store digital is the future of retail from groceries to luxury fashion, all retailers need to understand the need to catch customers’ attention and serve their needs. Investments in new-age technologies like AR, RFID, and magic mirrors are likely to yield long-term benefits by increasing customer satisfaction, engagement, and retention. The widespread adoption of e-commerce means that consumer expectations for service, convenience, and ease of navigation must be reflected in the physical retail experience to entice people to shop in physical stores. This means that investing in emerging technologies will enable retailers to transform their contactless offerings and meet and even exceed customer expectations.
(With inputs from Chinkesh Bomb, Student, PGDM (Retail Management), Birla Institute of Management Technology)