NRF: Retailers Must Reimagine Stores As ‘Digital Magnets’

Now that omnichannel capabilities have become table stakes for retailers, marketers need to refocus on integrating the real-world customer experience with the digital world, said speakers at the National Retail Federation’s annual Big Show.

Now that omnichannel capabilities have become table stakes for retailers, marketers need to refocus on integrating the real-world customer experience with the digital world, said speakers at the National Retail Federation’s annual Big Show.

Early sessions showed a strong focus on applying data and digital communications to improve in-store experiences and customer engagement. Many speakers echoed a trend noted in CMO.com’s annual forecast, which predicted that marketers will pay closer attention to real-life experiences in 2016.

Several speakers stressed that while the early stages of retail’s digital growth focused on building digital capabilities and e-commerce sites that could compare to the in-store experience, the next stage will involve improving in-store capabilities to do justice to the ease and selection found online, managing data to personalize the consumer journey, and making the move between physical and digital seamless.

“The ability to blend those experiences is where the art lies,” said Jeffrey Augustine, managing director of Alsbridge, an advisory firm.

Stephen Joyce, CEO of Choice Hotels, compared retail to the hospitality industry. When videoconferencing took off, many forecasters predicted the end of the hotel business, and while it has changed, it still needs to pay attention to brick and mortar, he said.

“The store is the most important interaction—let’s be clear,” said Tim Hood, global VP, strategy and technology of SAP’s Retail Industry Business Unit. “All the other work we do is to get there.”

Digital media provide useful tools for improving the real-world experience, both for consumers and retailers, speakers said. For example, Joyce said Choice Hotels is using virtual reality to aid its corporate sales people in showing off properties to meeting planners.

“It is truly technology that has untethered the customer,” said Patrick Bousquet-Chavanne, CMO of Marks & Spencer. The British retailer underwent a transformation around its digital core that included overhauling its infrastructure, content, and recruiting, all centered on engaging customers, mainly via mobile. “It is a smartphone-enabled approach because she connects through it,” Bousquet-Chavanne added.

Indeed, retailers are focusing on technology as an enabler, noted Miya Knights, global retail technology director of Planet Retail. The research firm unveiled a study that found 82% of retailers agreed that investing in technology helps target customers and offer personalized offers and experiences.

Personalization is another examples of “table stakes” for consumers, said Hari Shetty, global head of retail at WiPro Technologies, the sponsor of the Planet Retail study. This is especially true among Millennials, so the trend can only gain strength, he said.

“You have to use technology to power these experiences,” said Tracey Brown, chief member beer officer of Sam’s Club. But it need not all be an innovation; it can sometimes be a “mashup” of old tools put to new uses, she said. Planet Retail’s study suggested improvements, including providing secure free WiFi in stores, better mobile app integration, and “endless-aisle applications,” such as kiosks and handhelds for associates, which put online inventory within reach of consumers in-store.

“Retailers need to start reimagining their stores as digital magnets,” Knights said. Merchants need to apply the way shoppers look at products online to their in-store operations, she said.

Many of the experiential developments will depend on the use of the mobile technology to connect shoppers, speakers said. “The biggest disruptor in retail has to be the smartphone,” said Josh Johnson, senior manager, digital innovation at AT&T.

Shoppers may be overwhelmed by the number of apps available, so marketers need to worry about unused apps suffering “folder death,” SAP’s Hood told CMO.com. Retailers still need to have both apps and mobile-friendly sites; as many speakers noted, consumers’ digital expectations have never been higher.

“You have terms like mindshare and wallet share. Now there’s ‘cell phone share,’” he said.

Predictive personalization and better mobile apps may facilitate the personalized consumer engagements, but it will all depend on leveraging data, said Sanjeev Singh, CIO of education company Follett Corp. Many speakers said data will be key in understanding what the consumer wants from the store and how to deliver it in a personalized manner. “It’s the key to the digital transformation,” Hood said.

Many of these developments will require new partnerships between retailers and their suppliers. “There’s a new way of doing business,” said Michelle Buck, president, North America of The Hershey Corp.

Hershey is partnering with retailers to innovate the store experience and the use of technology in stores to display its products. The programs Hershey has piloted with retailers include a display using facial recognition to dispense samples to shoppers who smile, a rapid-prototyping machine that personalizes large chocolate Kisses for special occasions and a 3-D printer to create original chocolate products.

Hershey has committed to experiential design because already one-quarter of consumers are shopping for groceries online, she said: “If the aisles no longer remain as-is, how do we reinvent the store … (and) make shopping fun again?”

The experiential piece is part of a reinvention that retailers face, just like other marketers, said Choice’s Joyce. Rivals like Airbnb are putting hotels on the spot just as Amazon is doing to retailers, he said.

“In today’s environment, it’s the nontraditional competitor you need to worry about the most,” he said. “If you’re only focused on your traditional business… there’s a constant evolving and expanding series of folks who, because of technology, can get into your business that couldn’t before.”