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01/05/2015

The Connected Store in a Digital, Omnichannel World

In this age of the consumer, today’s hyper-connected shoppers are the driving force behind the need for the digitally connected store and growing omnichannel experience. Consumers are now accustomed to using technology and digital devices to simplify their lives — from wearables to smart-home solutions — and are commanding more control of their shopping experience. They expect their favorite brands to keep pace with their connected lifestyle and offer innovative new retail approaches to maintain their loyalty.

To stay relevant, fashion retailers and brands are rapidly evolving their approaches to offer a consistent, high-touch, personalized service, regardless of channel. A seamless shopping experience across channels holds the power to differentiate brands and make a more compelling promise to consumers. Eager to improve customer service and loyalty, especially at the store-level, more retailers are embracing digital customer-facing solutions. Web-based kiosks, digital signage, and proprietary retail mobile apps are quickly becoming the norm. By incorporating digital solutions at the store level, brands can offer a next-generation customer experience with a “connected store” as the goal. Integrating the physical and virtual channels can satisfy consumer demands in new and exciting ways that drive repeat visits and ultimately, sales.

More and more consumers are going digital to interact with their favorite brands on their own terms, both inside and outside of the physical store. According to Capgemini’s “Digital Shopper Relevancy Report,” a 2014 survey of 18,000 consumers from 18 countries, the physical store still reigns with 72 percent of respondents identifying the store as important or very important for retail transactions, while 67 percent similarly identify the Internet. Interestingly, 48 percent of respondents also agree that they will use stores increasingly as showrooms rather than as purchase destinations. Clearly, not only do shoppers want to bob and weave through channels, but many will embrace digital engagement in terms of the experience a physical store can deliver.

Fashion buyers seem to be on the forefront of this trend. The number of online fashion buyers has grown by nine percentage points in the past two years, according to Capgemini’s report. More specifically, 61 percent of respondents have purchased fashion merchandise online, compared to 52 percent in 2012. This growth suggests that apparel companies are leading the pack when it comes to engaging with consumers across digital channels. It is also an indication that consumers are showing an increased interest in online shopping for fashion merchandise.

Meeting Their Needs
The always-on, all-channel retailing model has moved beyond trend status to become a mission-critical strategy. Retailers are striving to perfect the ideal platform required to engage today’s and tomorrow’s shoppers. At the same time, the shift away from traditional retailing has added significant complexity and options to retailers hoping to stay in pace or ahead of consumer preferences.

As retailers consider options, if implemented smartly, the following digital solutions are a way to bolster the importance of both the physical store and electronic channels together to create a true omnichannel shopping experience.

?An Immersive Digital Experience in the Store. More than half of shoppers reported that they expect to spend more money online than in-store over the next three years, according to the report. This projection foretells how consumers’ adoption of the omnichannel experience will continue to complicate traditional store-level retailing. Prepared retailers will have a distinct edge.
 
Enter the next-generation of store-level retailing: the connected store. Physical retail locations that integrate digital technologies will grow in importance as they seamlessly deliver the brand’s experience through an omni-channel retailing platform. To elevate the role of the physical store, retailers are deploying digital customer touch points that connect the e-commerce site and mobile devices to mobile point-of-sale systems and interactive signage while also integrating with social media channels. By moving away from standalone point solutions to an approach that fully integrates digital enablers, like content or campaign management systems, with enterprise technologies, retailers can significantly advance their connected-store strategy.

?The Digitally-Enabled Associate. Although online shopping is an important channel, the report found that consumers favored the physical store as their preferred shopping channel. As part of bringing an immersive digital experience in store, retailers who arm associates with smart technologies can enhance shoppers’ in-store visits. Smart systems empower the store associate to be more than a customer service rep or sales person. By providing associates with digital solutions — integrated mobile POS solutions with e-commerce, social CRM and inventory management systems — they are enabled to move out from behind the point-of-sale (POS) cash wrap, become brand ambassadors, and offer the kind of service that not only manages transactions, but builds personal interactions. Consequently, the digitally-enabled and engaged associate has the potential to become the retailer’s most effective relationship builder and marketer.
 
?A Consistent Enterprise Shopping Experience. One of the biggest challenges retailers face is how to deliver a consistent experience across channel, especially as consumers continue to call the shots digitally. Enabling a digital dialogue and seamless all-channel commerce process means synching business information across channels in real-time and enabling a single view of data – from customer information, pricing, inventory and supply chain. In so doing, fashion retailers will be able to more closely discern customer preferences and identify product availability. A rewarding experience awaits the shopper regardless of the channel she visits because the merchandising shelf is connected — sensing local trends and triggering fulfillment mechanisms through the supply chain. A high level of transparency and data intelligence will allow retailers to drive consistency and top-notch service channel-wide, while also understanding the behaviors that will drive profitability.
 
The Digital Shopper Relevancy Report also indicates that the consumer’s love affair with digital technology will continue to grow stronger, putting fashion retailers in the hot seat to meet consumer demand. Companies assessing their digital readiness to fully embrace multichannel retailing should consider the following:

?Integration is key. The journey to move to a truly digital customer experience is complex, given the convergence of CRM, supply chain and commerce functions. Disconnected point solutions will only move the bar incrementally. Integration across these critical systems will be a requirement for success. As an example, a demand-driven supply chain that links with social channels can sense a localized demand signal and automate rapid fulfillment to maximize sales.
 
?Innovation in action. The road to innovation for building a world-class customer experience requires strong leadership, forward thinking and the ability and agility to put ideas into action. Test-and-learn will become the new normal, which will require companies to quickly apply innovations in more areas — with a clear vision, an iterative roadmap, and governance models to stay on track. An engaged executive leadership team is also critical to inspire and drive innovation velocity. As cited in the recently published book “Leading Digital,” coauthored by Capgemini’s Didier Bonnet, “Digital Masters excel in two critical dimensions: the what of digital technologies and the how of leading change. What you invest in matters, to a point. How you use those investments to transform your company is the key to success.”
 
?Customer advocacy at the heart. The digital journey requires retailers to serve as customer advocates and to understand their behaviors and preferences. Keeping a customer mindset is critical to success, as it supports the ability to build trusted, personalized relationships that deliver on the convenience and service consumers crave. Gaining trust and providing convenience are two factors that encourage customers to embrace the retailer’s new digital solutions.
 
Digital technologies provide a green field opportunity for retailers to differentiate their experience and win the hearts and minds of customers. The great challenge and opportunity in this age of the consumer is to create a true win-win value proposition for the retailer and the digitally-savvy consumer, meeting expectations one customer and one touch point at a time. 

Ted Levine is Global Sector Leader, Consumer Products & Retail and Lynn Lang is Canada Sector Leader, Consumer Products & Retail, Capgemini.