Retail Remix: Blending Online And In-store

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Customers want a digital remix of retail solutions, so much so that they would throw away their loyalty cards if not satisfied.

Call it the brighter side, the pandemic brought out the best in business leaders. Brands showed the courage to change business strategies, embrace digitization, and leverage technological tools to enhance customer expectations. From 360 degree lookbooks, data-driven omnichannel marketing, and AR/VR tools to BOPIS (buy online, pickup in-store), curbside pickup, and BORIS (buy online, return in-store), innovations took over the industry.

Legendary brick-and-mortar stores suffered huge losses, and the world almost believed the industry had hit a retail apocalypse. However, while some struggled to embrace a modern, digital change, many were receptive to the changing customer behavior. Take Macy’s, for instance. For a moment during the peak of lockdown, people almost believed it would shut down, but the brand had a good run in 2021.

Bloomingdale’s and Blue Mercury, reported that same-store sales shot up by 27.8% compared to the same period in 2019.

“We are now more digitally-led and customer-centric in our planning and execution,” said Jeff Gennette, CEO, Macy’s. “We have also demonstrated the value of an integrated company, meeting customer expectations for a more seamless shopping experience across digital and store offerings.”

With an increased effort towards leveraging technology such as data and analytics solutions, the retailer has also enhanced its personalization strategy. Macy’s says 58% of its customers shopped on the website, improving the digital sales by 12%. It was a turning point in the business journey of the iconic brand.

Similarly, 20 years in the making, Card Factory suffered a hefty loss during the pandemic, causing them to shut down completely for over five months. After much thought, planning, and cutting its losses, it bounced back recently. With new in-store digital screens, the refurbished store reopened, making better use of space and enhancing customer experience (CX).

Meanwhile, an Asia-based fashion retailer, Aditya Birla Fashion and Retail, known as ABFRL chose to leverage hyper-personalization technology for seamless CX across all customer channels. Using Algonomy’s Recommend, Engage, Find and Discover to leverage real-time shopper behavior, Pantaloons is the first ABFRL brand to deploy the new technology.

“Customers today expect the very best and completely seamless shopping experience from store to digital, and our partnership with Algonomy will enable us in delivering on these expectations by personalizing across the digital channels, without any experience fragmentation,” said Praveen Shrikhande, chief digital and information officer, ABFRL.

But Customers Want More

A new report by RSR Research and Coveo Solutions states that a problem arises when almost all customers want a digital remix of retail solutions, so much so that they would throw away their loyalty cards if they weren’t satisfied.

“Opportunity starts once shoppers land on a retailer’s digital property,” said Brian McGlynn, GM of Commerce at Coveo. “Retailers should be asking themselves how they are going to meet customer expectations in a more personalized and relevant way. Shockingly, according to this report, 40% of all retailers surveyed are using technology that is five years old or more – and that’s not going to cut it in today’s winner-take-all world.”

In the report, 61% of respondents stated that digital experience had become an increasing priority in their brand, and 56% said that their competition is doing a better job acting on customer expectations — no delusions or denial here. However, with brand leaders accepting and witnessing their competition do better, it’s only got them motivated.

While over 75% of retailers are using AI and ML to enhance their product and search discovery, many others are focused on offering new-age solutions to maintain their business’s online and offline blend.

Additionally, in August 2021, the Bureau of Labor Statistics identified that around 850,000 retail workers had left their posts, and many are yet to return. To deal with long queues and irked customers, brands are pursuing labor automation tools, checkout options, and other end-to-end store management solutions.

Backed by artificial intelligence technology with over 90 cameras, Ireland got its first frictionless grocery store recently called Market x Flutter. It allows customers to walk out without the hassle of check-out queues and payments. While the concept may sound similar to a grab-and-go store, it’s not. Its unique selling point (USP) is that customers can grab the products without scanning them. Additionally, no facial recognition or biometric technology is used, ensuring shoppers’ anonymity.

Food and restaurant business chains have become pioneers in blending brick-and-mortar with digital experiences. Recognizing the competition and continuous demand for technological ideas, they continue to raise the bar. For instance, Domino’s had already cracked the loyalty code with their 30-minutes delivery strategy, or you get your food for free! But the brand knew they had to turn 9 out of 10s to a full score.

Partnering with what3words that revolutionized the way brands communicate location, Domino’s optimized its ordering platform for fast and accurate delivery at the customer’s doorstep, garden gate, or side entrance, whatever the customer chooses.

A what3words address is a seamless method to share accurate locations with brands through omnichannel communication. It is enhanced for voice input and has built-in error prevention to identify and correct input mistakes.

The Collaborations

Surprisingly, more stores opened in 2021 than were closed. Well, the technological buzz is only getting more active, futuristic, and collaborative.

While disruptors and well-established brands are opening aggressive stores, digitally native brands such as Allbirds and Warby Parker are adding brick and mortar stores to their business growth strategy.

Last year, Starbucks decided to close 400 of its underperforming stores and replace them with smaller pickup locations and engage in active collaborations. On the other hand, the eCommerce giant Amazon wants to expand its physical presence. As a result, the two brands are collaborating for a grab-and-go store. Moreover, shoppers at some Target stores can now pick up a Starbucks order and make a return without having to step out of the car.

The 2022 Tech Trends

Last-mile delivery and curbside pickup have increasingly increased, with retailers becoming micro-managed fulfillment centers to seamlessly blend online and offline experiences. For instance, eCommerce platform Freshop has a fulfillment app that provides a frictionless ordering process for customers and a simple fulfillment process for pickers and delivery personnel.

Automation is also being leveraged to power micro-fulfillment. Walmart launched fulfillment centers next to their stores, where automated bots retrieve goods for online orders.

eCommerce savvy consumers who also enjoy the luxury of in-store shopping expect a mix of the two anywhere they shop. Retail edge and as-a-service trends are expected to take over the shopping industry soon.

Retail edge will be harnessed with the possibility of virtualization, containerization, and automation by integrating in-store touchpoints under the umbrella of an intelligent retail store architecture, all managed from the cloud.

Smart retailers have begun to leverage endpoint devices that can support in-store kiosks and display screens, among many other innovations. With the raging buzz of blockchain technology, cryptocurrencies will play an inevitable role in the blend of offline-online shopping, becoming a mainstream payment method. A mid-Atlantic restaurant and convenience chain, Sheetz has become the first in its industry to accept bitcoin and other digital currencies in-store.

Although there is no denying the likelihood of eCommerce growth surpassing that of offline stores, business leaders are aware that offline stores play a crucial role in brand growth. It’s not a war between the digital and the physical, but a remarkable and promising image of technology, business leaders, and customers — all part of a well-oiled cycle.