Amazon Go and other stories: 5 trends shaping ‘phygital’ shopping
For some years now, the bricks-and-mortar path to purchase has been growing steadily more ‘digitised’. Figures from Deloitte suggest that, for every dollar spent over a counter, $0.56 is now influenced by a digital interaction. Meanwhile, according to Retail Dive’s 2017 Consumer Survey, 65% of customers perform online research before setting foot inside a shop.
As the physical and digital customer journeys continue to merge, it’s only natural that businesses are adapting their strategies to suit. From magic mirrors to the store-as-showroom, some brands have recently been experimenting with ‘phygital’ shopping experiences: stores which combine the efficiency and convenience of online shopping with the immersive, brand-driven environment of a bricks-and-mortar experience.
We explore 5 trends that are currently bringing digital to the high street.
Digital customer service
The vast majority of high street shoppers don’t like approaching sales assistants for help; in fact, 95% of them want to be left alone. Perhaps this is why, according to numbers from Salsify, 4 in 5 consumers conduct product research via mobile while standing physically in-store. In other words, your ecommerce platform – specifically, its product and guide content – is now fulfilling the role of in-store sales assistant too.
While this may seem infuriating to some omnichannel retailers – after all, you’ve invested in those in-store employees for a reason – it could actually prove a blessing. If brands can provide high-quality, highly informative product and guide content on their ecommerce platform, tailored to brand message, then they will offer these bricks-and-mortar browsers a perfected version of their sales pitch, improving not only customer service, but conversion rates.
To learn more about writing online product content that converts, take a look at our guide.
Modern consumers want personalised experiences more than ever. Unfortunately, as we’ve seen, they’re also somewhat averse to human assistance. So how can bricks-and-mortar retailers offer personalised services to a consumer beyond sales assistants and personal shoppers?
Many are opting for technological solutions, particularly in the beauty industry. ‘Magic mirrors’ – screens which allow customers to try on various makeup and clothing looks via augmented reality – have gained traction over the past few years. Similarly, SK-II’s Smart Store in Shanghai has pioneered a ‘Miracle Water Lab’ that scans customers’ faces and recommends products adapted to their specific beauty needs.
Where personal service once required a human assistant, hi-tech devices allow customers to tailor products to themselves, without undergoing hours in the makeup chair. While obviously requiring a significant level of investment, it’s an elegant solution that caters masterfully to the modern, human-shy shopper.
In recent years, we’ve seen a trend in pureplay internet businesses expanding to launch physical stores, for example, the recently opened store from Matches Fashion. These ‘showroom’-style spaces act as experiential gateways for the customer, solidifying offline brand identity. However, this trend isn’t restricted to pureplays; experience-oriented stores are also becoming increasingly popular among established omnichannel brands such as Nike and Adidas.
What does it all mean? Increasingly, brands are viewing the retail store not as a driver of sales but as a physical destination – an adventure to be enjoyed. Their goal is not necessarily to convert, but rather to encourage consumers to engage with the brand in new ways – experiences that are impossible to conjure over the internet.
Over the coming years, as ecommerce begins to dominate, we can expect to see more and more stores playing to their strengths in this way, leaving online stores to do the heavy lifting where conversions are concerned.
“Just Walk Out”
One of the major advantages of ecommerce is the virtually seamless checkout process: no queues and (usually) no hold-ups or issues. But what if retailers could bring that top-notch customer experience to the high street grocery store?
It’s been done – by Amazon, naturally. Amazon Go, the physical store developed by the ecommerce giant, uses cameras to scan customers as they browse the shop floor, logging the items they pick up and bag. When they leave the store with their shopping, they are sent a receipt via an app – no checkout necessary.
With nine stores so far in the US, Amazon Go is the ultimate translation of a wholly digital, super-simple online experience to a real-world environment. It’s operationally efficient and, thanks to its bricks-and-mortar nature, immediate in a way that online shopping isn’t.
Amazon isn’t the only company pioneering the “Just Walk Out” approach. Chinese competitor Alibaba’s Hema stores allow customers to research and buy products they see in-store via an app. Similarly, SK-II’s high-end Smart Store in Shanghai has recently instituted ‘buying bracelets’, allowing customers to purchase products by simply waving their wrists; all charges go direct to their online accounts at JD.com.
In-store data capture
One major disadvantage for solely bricks-and-mortar retailers is a lack of consumer data. While online retailers can monitor and examine the behaviour of digital browsers to the tiniest minutiae, there’s little way for physical stores to do the same beyond beacons – a technology that perhaps hasn’t quite delivered on its promise since its advent several years ago. However, as new technologies are developed for data capture in-store, this will soon change.
When luxury pureplay marketplace Farfetch announced their ‘store of the future’ concept in 2018 – a series of innovations aimed at digitising the in-store experience for high street retailers – a key theme was data. Among their offerings are log-ins that check a customer digitally into a store, furnishing sales assistants with purchase history, brand preferences and browsing behaviour. Furthermore, ‘smart’ clothing racks keep track of what customers pick up and try on, populating a personalised wishlist on the fly.
Combined, these mechanics effectively do the job of cookies: allowing omnichannel brands to track the ‘phygital’ customer across both on- and offline touchpoints, and thus develop a greater understanding of their consumer base.
Online sales represented 18% of UK retail revenue in 2018, as well as 11% worldwide. As these numbers continue to climb – and customer journeys continue to diversify – we can expect the distinction between off- and online sales to become less and less clear-cut. In a matter of years, the ‘phygital’ consumer will be the only consumer left. The brands that understand and adapt to this new audience will be the ones that thrive.
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