In-Store Digital Overhaul

We’re at the beginning of a retail transformation: By 2018, Forrester expects the web will influence 60% of all retail purchases in the U.S. The growing percentage of retail revenues driven by e-commerce and the influence of digital technologies on consumer behavior and expectations alike means that retailers are being forced to reevaluate the value proposition of the physical store. The result? A digitally enhanced retail store.

eBusiness teams have dabbled in building in-store digital experiences before with some success — for example, consumers are generally familiar with in-store web kiosks. Today, however, retailers are challenging the old paradigm of the retail store by:

• Implementing web-style analytics technology in the retail store. Retailers are combining new technologies and data sources enabled by WiFi, beacons powered by Bluetooth, video, and global positioning systems to understand customer behavior at a more granular level and optimize the store environment in near-real-time. Using web-style analytics in-store enables retailers to optimize the use of real estate, change under performing merchandising or windows, and inform loss prevention strategies.

• Powering store fulfillment initiatives to win and retain customers. Ship-from-store, or fulfilling online orders from physical stores, is the omnichannel initiative du jour. Saving the sale online when the web distribution center is out of stock has a big impact on conversion. Additionally, retailers can reduce shipping times and boost revenues by fulfilling online orders from store locations close to the customer or those where products are most likely to be discounted.

• Installing touchscreens or gesture-based digital displays for product personalization. For retailers that sell configurable or personalized products that are manufactured to order (e.g., shoes, apparel, toys, household items and vehicles), sophisticated online configurators have been around for more than a decade. New interactive touchscreen and gesture-based displays are enabling retailers to sell these products in-store.

• Empowering associates with mobile point-of-service (mPOS) devices. Retailers are putting tools into the hands of their associates to effectively engage and service customers on the floor. The focus has largely been on line-busting and “checkout anywhere” initiatives. However, other service-related tasks trump mobile checkout in consumer expectations such as price and inventory checking and providing additional product information.

While these digital enhancements hold the promise of meaningful improvement in operations and revenue growth, success stories with clear evidence of uplifts in incremental revenue are hard to come by. Even so, many retailers are forging ahead and investing significant resources to revolutionize the in-store shopping experience and adapt the role of the physical store to the realities of digital disruption.

Lily VarÓn is a researcher at Forrester Research, a global research and advisory firm. She focuses on the technologies e-commerce firms need to globalize and transact with consumers in the age of digital business. For more information visit
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