The Physical Store Goes Digital

With apologies to Mark Twain, the reports of the death of the traditional brick-and-mortar retail store have been greatly exaggerated.

The perceived threat is that online competition, such as Amazon, is moving into physical stores by way of shoppers’ smartphones, forcing retailers to compete mainly on price. But that’s a shortsighted and defensive perspective that doesn’t look at the opportunities.  By combining the benefits of mobile digital marketing with their brick-and-mortar assets, traditional retailers can completely transform the in-store shopping experience and take advantage of customer data.

E-commerce retailers have long had the ability to understand each customer through personal online searches, browsed products, and past purchase histories. This data is then used to target individual customers with personalized product suggestions and offers. E-commerce retailers have successfully leveraged these technologies to help reduce costs and lower prices.

In much the same way, smartphones present similar opportunities for retailers to take many, if not all, of the advantages enjoyed by e-commerce sites and apply them in-store. Through the use of branded mobile apps, brick-and-mortar retailers can now take advantage of that same kind of information to understand their customers better and then deliver a highly personalized shopping experience. Physical retail stores can take advantage of the benefits of in-store shopping, including the immersive and tactile experience of picking up items off a shelf, the convenience of immediate delivery, and personal, in-person customer service.

By knowing what each shopper wants to buy, what they look at, where they spend time in the store, what messages they respond to, and what they actually purchase, the retailer can accurately map the entire path to purchase.

An important side note: This is not about optimizing the traditional e-commerce site for a smaller smartphone screen. That does nothing to connect the shopper with the physical store. In fact, that approach takes shoppers out of the store and puts them one click away from the competition.

As a retailer, or a brand working with a retailer, imagine being able to establish a personalized relationship with each customer by making individualized recommendations that match personal preferences and purchase histories. That’s all possible with connected, smartphone-enabled shoppers.

How each store connects with its customers will depend on what the stores is selling, how its customers behave, what its customers respond to, and which aspects of its brands it want to promote.

Some retail categories, such as grocery stores, will be able to take advantage of shopping lists to show customers where the products are located in the store, as well as the most efficient route. Grocers will also make suggestions and offers on behalf of the brands they carry. By accurately understanding each customer’s purchase intent, these become highly targeted communications that brands will pay for, generating a new retailer revenue stream.

Others, such as apparel stores, may benefit more from making personalized product suggestions that match what a customer browsed and then offering personalized discounts. Integrations with social networks will allow customer to influence their friends and followers.

On a larger scale, smartphones are also helping retailers learn more about what happens in their stores, including where shoppers spend time, which messages have impact, and how they can be more effectively influenced. This allows physical stores to become more competitive as they’re able determine the best places to invest to increases sales, improve customer satisfaction and loyalty, extend their brand, and take advantage of Big Data related to the physical store.

By combining the best of digital marketing with the power of the physical store, expect traditional retailers to not only survive, but to thrive. With physical stores still responsible for more than 90% of all retail sales, it’s a huge opportunity.

Todd Sherman is CMO of Point Inside, a provider of mobile in-store shopper engagement capabilities for retailers to incorporate into their own branded apps.

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