What’s old is new | Retail Dive

Picture this: You walk into a store where a concierge greets you by name and offers recommendations that match your preferences, fit and past purchases. Remembering your recent birthday, the shop owner treats you to a gift — something they know you’ll enjoy. Before leaving, you ask to be notified when wish list items are restocked and add today’s purchases to your tab, to be paid later.

No longer limited to hometown boutiques, such neighborly shopping experiences are now possible at scale, thanks to a surge in retail digital enhancements.

From curbside pickup to virtual try-ons and deferred payments, retail is experiencing a digital renaissance, enabling retailers to automate white-glove treatment in ways that weren’t scalable until now. For shoppers, these automations facilitate a return to nostalgic, personable experiences. For retailers, they’re welcome updates to familiar brick-and-mortar operations, enabling greater profit margins and efficiencies.

Restoring human connections

For all our reliance on digital connectivity, consumers still share a deep craving for human connection[1]. And that translates into heightened expectations to be seen and addressed as individuals.

One offshoot for retailers is a shift in loyalty dynamics. Instead of expecting consumers to be loyal to stores, stores are now expected to be loyal to consumers[2]. But how do those retailers make every shopper feel like a VIP?

Creating that reality starts with ensuring shopping channels work together, not in competition. It’s no longer online vs. brick-and-mortar, but how the online and physical realms work in concert to create richer, more satisfying journeys. Leading retailers know this, spending a chunk of their recent budgets on digital investments in their physical stores, according to a Gartner report[3].

Elevating in-person experiences and delivering instant gratification

Experiences are important to the modern shopper: 54% of surveyed digital consumers say they shop in stores that create engaging experiences and 43% shop in-store so they don’t have to wait to enjoy their purchases[4]. In the future, researchers predict there will be two main types of retail spaces: convenience stores, where shoppers go for impulse or frequent buys of convenience goods, and “experience centers,” where shoppers go to experience products that require more consideration, testing and engagement[5].

This year, consumer appetite for discovery and connection is such that most surveyed retailers plan to increase spending on in-store experiences, with top investment areas including technology (73%), net number of stores (71%) and floor space (68%) ). “This does not mean that ecommerce isn’t important,” notes Gartner: “It reflects how the digital battleground has moved to the physical world”[6].

Nurturing familiarity and engaging all senses

How do you make the intangible tangible? Technology can help. Six in ten shoppers prefer to shop in stores that offer augmented reality (AR) try-ons and visualizations, and 71% would shop more if AR were offered, according to Deloitte[7]. What’s more, brands that offer virtual try-ons average 64% fewer returns. Take Macy’s and Shopify, for instance: After introducing virtual fitting rooms last year, Macy’s reduced its return rate to less than 2%, and Shopify saw a 40% drop in returns[8].

Radio frequency identification (RFID) is also coming to in-store experiences. The tracking technology enables retailers to detect items being loaded into carts to trigger personalized recommendations. RFID could also work in conjunction with smart fitting rooms, giving shoppers information about sizes and colors in stock, offering tips for styling a garment and personalized recommendations to complete a look[9].

Altogether, 75% of surveyed retail executives told Deloitte they will invest in more digital-meets-physical experiences this year. Top areas of focus for those investments include greater personalization (43%), innovative offerings (43%) and a deeper sense of connection (40%)[10].

Catering to on-the-go shoppers

When the pandemic first hit, curbside pickup filled a need for greater safety and convenience. Two years later, it’s clear consumers have embraced the habit, making the most of their drive time to expedite their shopping.

In 2020, Target expanded its curbside pickup service to more than 1,500 outlets, lifting ecommerce sales by 144% year-on-year, fueled by a 600% growth in curbside pickup sales[11]. Those aren’t isolated results: consumer use of click-and-collect and buy-online-pickup-in-store are up 125% and 52%, respectively[12]. And 84% of consumers are expected to maintain or increase curbside pickup behaviors[13].

Waze data from more than 140 million monthly users bears this out, showing a direct correlation to increased trips to retailer locations displaying a curbside pickup badge on the platform. Waze data also indicates consumers are grouping more trips together, trying to accomplish more in one go and making more buying decisions behind the wheel[14].

“We see drivers clicking on Waze navigation ads and driving to those locations,” notes Liz Franz, Head of Retail Industry for Waze. “It’s clear from the data that visibility in Waze drives incremental trips and delivers shoppers to our advertisers’ doorsteps.”

Looking ahead, even the most change-averse retailers have to recognize the real risk is not taking action. With expectations so high, consumer attention will go to retailers that marry digital and physical components to deliver delight — particularly at fleeting moments of decision.


SOURCES

[1] “Future Consumer 2022.” WGSN, December 2021, URL. Accessed 8 February 2022.

[2] “Leveraging technology to expand the retail experience.” National Retail Federation, 17 January 2022, URL. Accessed 8 February 2022.

[3] “Retail 2022: Betting Big on Digitalized Stores.” Gartner, 9 November 2021, URL. Accessed 8 February 2022.

[4] “Commerce 2040: The Future of the Store in a Digital World.” Euromonitor, September 2021, URL. Accessed 8 February 2022.

[5] Ibid.

[6] “Retail 2022: Betting Big on Digitalized Stores.” Gartner, 9 November 2021, URL. Accessed 8 February 2022.

[7] “Digital Reality changes everything.” Deloitte, 2019, URL. Accessed 8 February 2022.

[8] “Virtual Try-On: Game Changer or Hype?” Netguru, June 2021, URL. Accessed 8 February 2022.

[9] Should retailers add RFID to their marketing toolbox? RetailWire, 28 January 2022, URL. Accessed 8 February 2022.

[10] “2022 Global Marketing Trends: Thriving through customer centricity.” Deloitte, 19 October 2021, URL. Accessed 8 February 2022.

[11] “Commerce 2040: The Future of the Store in a Digital World.” Euromonitor, September 2021, URL. Accessed 8 February 2022.

[12] “Shopping Trends Every Marketer Should Embrace in 2022.” AdAge, 18 January 2022, URL. Accessed 8 February 2022.

[13] “Chief Marketing Officer Leadership Vision 2022.” Gartner, November 2021, URL. Accessed 8 February 2022.

[14] Waze Data, 2021.

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