When the smartphone digitized everyday life, physical stores needed to react. Attempts to make the point-of-sale (POS) more attractive were all too often limited to marginal facelifts.
Since the success of online shopping was detrimental to in-store sales, sheer productivity often took priority over customer experience and loyalty. Stores were more concerned about the optimal utilization of sales staff and cashiers than about the customers who were lost in searching for items or waiting in lines.
Now, the shopping experience becomes the differentiating factor between offline and online retail. In order to retain regular customers, it’s no longer enough for a store to carry a brand and have the right items from that brand in stock or be able to obtain them quickly.
Shopping must stimulate the reward system in the brain from the initial contact with the salesperson and in-store environment to the goods themselves — i.e., looking, touching, feeling — to spending money. Treating oneself to something must be more fun than waiting for a future delivery.
What retail needs is a reunification of the POS and point-of-payment, similar to the highly personalized experience received in boutique shops. Which retailers are doing this successfully?
You can experience this reunification at the Apple Store, where the division of labor between advisors and cashiers is eliminated. Similar to shopping at a boutique, there are salespeople/advisors who handle the exchange of "goods for money" — fully digitized, of course.
The cash register now exists only virtually as an app on the employee's iOS mobile device; the POS is also the point-of-payment. Payment is not only paperless, but the receipt is sent by e-mail, making the whole shopping experience simple and streamlined.
The Decathlon Sports retail chain goes one step further in The Netherlands. Using mobile payment software from British start-up Mishipay, its Dutch branches use a customer's smartphone for checkout.
Once the app has been installed, all that remains is to scan the barcode on the RFID label and confirm payment. Then, the theft alarm is deactivated for the specific item, and the customer can leave the store without delay.
Particularly exciting is the reunification — and beyond — concept that Hamburg, Germany, retail group Otto is testing in a branch of its fashion brand bonprix. The pilot store is called "Fashion Connect." The name came about because the customer uses a smartphone app to establish a connection to the shop's IT system at the entrance.
Each item of clothing is only available in a single size in the freely accessible part of the store. With her mobile phone, the shopper scans the labels of items she wants to try on, selects her desired size and reserves one of the digitally-enhanced dressing rooms. An employee fetches the selected goods from the warehouse, hangs them up in the reserved room and informs the customer by mobile phone message that they’re ready.
The dressing room lights come from a digitally-controlled lighting system with selectable “color” temperatures ("in the building", "on the beach" or "restaurant/party"). Undecided customers can use the system to request a consultant or have a different size brought to them, while the customer who has made her decision simply packs the goods into the bag provided.
Payment is made at the card terminal, at a cashier or directly in the app (via PayPal). bonprix uses RFID transponders to record which items the customer takes with her. In this way, nobody has to wait for an employee to remove an anti-theft device. bonprix’s innovative concept earned the brand a “Best Customer Experience Initiative” accolade at the recent World Retailer Awards.
It’s precisely in those product categories in which online retailers have achieved the highest market shares; e.g., clothing and technology, where physical retailers can offer added value with easy, digitally-enhanced, shopping/checkout and on-site staff that can address questions about products. By combining innovative POS and point-of-payment offerings, along with personal service, these merchants can help drive traffic in-store and engender loyalty.
Jed Danbury is VP at Computop.