Building Winning Stores

August 22, 2019

Tim Mason is Chief Executive Officer, Eagle Eye Solutions Ltd.

Today, more and more customers are adopting digital platforms to make purchases. However, the most prudent approach would be to adopt an omnichannel strategy—one that makes use of the digital medium as well as traditional bricks-and-mortar stores.

Digital adoption has grown through ecommerce, where Amazon is now more popular than Google when searching for something to buy, and industry estimates say that around 60 percent of all sales is digitally influenced.

With ecommerce predicted to account for about 38.5 percent of total retail sales by 2023,1 it is hardly surprising that most traditional physical retail stores are under pressure from traffic and sales migrating online.

The situation is even more pronounced in countries where digital adoption is being fuelled by mobile internet access. Many markets, such as India and China, are leapfrogging the wired legacy world of the West.

Yet, there is cause for optimism. Rather than forsake stores for online, consumers are creating their own blended shopping reality that spans both off- and online—it involves websites, apps, and physical stores.

Take the double-edged sword of ‘showrooming’, as an example. Around 83 percent of shoppers surveyed by iVend admitted that they are ‘showroomers’—they browse in-store before seeking out a cheaper price online.

So, consumers still visit stores. But, it seems, they are all too easily beaten by online offers. Even sales spaces such as bars and restaurants are losing out to rivals offering home delivery via platforms such as Uber Eats and Deliveroo.

The same survey also found 96 percent of shoppers left empty-handed because they could not find what they needed or queues were too long. It is therefore imperative to update consumer-facing spaces in order to compete.

The case for a mobile makeover should also be based on the fact that today’s shopper does not face an ‘either/or’ choice when it comes to shopping channels. They want an omnichannel experience.

Long live the store

But stores are not going anywhere anytime soon. Ecommerce is growing fast, but from a relatively tiny base, and online cannot beat the store when it comes to touch and feel, as well as instant gratification.

Even showrooming has an offline equivalent, called ‘webrooming,’ that bears out the physical store advantages—consumers browse online before visiting a retailer’s physical sales location to try before they buy.

In fact, almost 90 percent of all sales are still completed in a store even if nearly 40 percent will be initiated online by 2023. These include online reservations that are paid for, and/or purchases, fulfilled and collected, in a store.

This is why mobile is emerging as the glue between the store and online. Embracing mobile in-store can digitally augment the store experience in ways that can both compete with and complement online growth.

This is where the term, ‘mobile makeover’ comes in. Coined by ecommerce pioneer Stephan Schambach,2 it captures the sentiment that stores need to be refit with a digitally-enabled and data-driven purpose.

A mobile makeover is a great way to think about building a business case for digitally augmenting the physical sales experience so it can offer the same levels of choice, convenience, relevance, and utility as online.

Digital augmenting physical stores

Indeed, it may be possible to argue that a mobile makeover would be a more effective use of capital investment than a traditional fixtures and fittings overhaul. It can directly boost sales and footfall.

The case for a mobile makeover should also be based on the fact that today’s shopper does not face an ‘either/or’ choice when it comes to shopping channels. They want an omnichannel experience.

This means that consumers see no distinction between the physical and digital as consumer-facing businesses that are accustomed to dictating the terms of engagement—they see each as part of a blended whole.

Consider, for example, Google has tracked 900+ percent growth in mobile searches for ‘near me today/ tonight’ (such as ‘restaurants near me today’) in the two years to the end of 2017.

‘Near me’ mobile searches containing variants of ‘can I buy’ or ‘to buy’ also grew 500+ percent during the same period. A further 76 percent of local searches produced a store visit that same day, and 26 percent resulted in a purchase.

Digitally locate the store

Nevertheless, the issue facing stores today is that they are tantamount to a ‘digital black hole’. This is obvious when using a mobile device, as Google can find and direct you to the nearest store selling an item you search for.

But, once there, that mobile device is rendered all but redundant by the majority of store operators. Some even actively block mobile data access in a vain attempt to combat showrooming.

Rather store owners need to empower shoppers via mobile in-store, just as easily as they can locate your store in a digital world during the online search, browsing, and discovery phases of their journeys.

Once your search engine results page (SERP) accurately locates your store and offers other important information like its opening hours, the corresponding webpage, and telephone number, overhaul the store itself.

This means embracing and even encouraging mobile connectivity in-store. It then becomes possible to encourage customers to connect with and identify themselves in the same way as they would to buy online.

Do this by offering secure, publicly accessible Wi-Fi, as well as a reason to register and use it. A European fast food chain, for example, measured engagement via Wi-Fi and found some 53 percent were ‘one-time only’ visitors.

Yet, it is actually possible to increase repeat visits by 9 percent if people log into Wi-Fi and, when combined with a campaign to incentivize shoppers into store, this can increase to a 24 percent return rate with those that engage.

Enhance the customer connection

Once in-store and online via mobile, it becomes possible to engage customers ‘in the moment’, whether that moment is at the shelf edge, in front of a changing room mirror, or at the point of purchase.

It is also important to engage a registered mobile customer in-store with timely, relevant content. This could be anything, from recipes or outfit ideas that can digitally augment the store’s range and merchandising.

This could also include an incentive to buy, like an offer, or reward that, when redeemed at the point of sale, can be tied back to the sale for full attribution, so enhancing customer and sales, as well as the RoI, insight.

In exploiting the timeliness and relevance of a customer’s location in the store relative to the products they are browsing, it becomes possible to target them with a new product offer, such as yoghurt when they are near the dairy aisle.

Use mobile to also enhance traditional store marketing, where specialist products will never warrant a large share of voice. But it becomes possible to flag them via mobile to those who they might interest.

Doing so also demonstrates the utility that mobile can bring into the store and, as long as consumers perceive that value, they will love that store all the more for it; where we already know proximity is a proxy for relevance.

Lastly, thinking about utility from an omnichannel perspective, why not expose live store inventory to boost footfall? Or enable customers to buy items online that are out of stock in-store and so, ‘save the sale’?

The new Amazon Go convenience store has taken this utility to its ultimate end and will not even let you into the store without a mobile scan. But once there, you can make purchases without having to checkout.

If the Amazons and Alibabas are taking on physical retail and overhauling it for mobile, operators who do not embrace mobile makeovers, as key to winning with omnichannel customers in-store, will struggle to compete.