Building An Experience Led Retail Business: Convergence of Physical, Digital, Augmented and Virtual Worlds
A dramatic shift is taking place in business as we all adjust to customers’ new priorities. Across the globe, customers are demanding personalised, contextually relevant, and real-time experiences from Retailers. You might say that every retailer’s new brand is sum total of experiences they deliver and their new product is the ‘Customer Journey’. They are all now in the ‘Experience Business’.
In another blog post, I discussed the first step a business could take to embrace this shift by adopting design-centric thinking. While such design-centric thinking was first applied to the creation of physical objects, it is now increasingly common for leading organisations to apply it to the more intangible, such as how a customer feels about their interaction with their brand across all touch points during the awareness, purchase, delivery, service, returns and loyalty journey.
The evolution to the Experience Business model is very visible in the retail sector. Retailers have invested significantly over the last few years to transform their business across online, mobile and in-store channels, but now it is time to turn your attention to the next phase – leveraging ‘experience’ as a competitive differentiator. As you create your roadmap for turning your business into an experience led retailer, reflecting on your past, present and (potentially) future journey, may be helpful.
Phase 1: Let’s bring my catalog into customer’s home. Online.
In the early days of the World Wide Web, retailers started to put their product catalog online. In some cases this was a straightforward extension into the digital realm for companies who used to mail catalogs to customers. The primary objective was to drive traffic to store, but very soon it became apparent that customers wanted to shop from the comfort of their homes and NOT come into the store.
**Phase 2: Let’s enable customers to shop for our products from the comfort of their home with home delivery.
**Widespread adoption of eCommerce by retailers took place in response to customer demands. Online retail sales in Europe over November and December last year were huge, with our latest Adobe Digital Index data showing that over £19.16bn was spent online in the UK, €24.45bn in Germany and €14.97bn in France. Plus, nearly half of that online spend in the UK was on either a tablet or a smartphone.
**Phase 3: Let customers shop online and pick up their goods wherever they want.
**Retailers realised that customers want the convenience of shopping online and receiving their goods at home, at office, at a third-party collection point or at a store.
Retailers accepted that mobile devices have taken over and the customer now shops at home, work, in the store, or waiting at a traffic light! The emergence of mobile web and apps became clear. In the U.S., 90% of the time spent online is done through apps. Globally, that number is 52%. An amazing 42% of all mobile sales generated by the leading 500 businesses comes from mobile apps.
Phase 5: Let’s digitise my store experience.
The store has the potential of becoming an exciting extension of the digital experience and opportunities abound that could bring the customer back to the brick and mortar shop. Retailers experienced the rebirth of the store — a space which has been left alone for quite some time and regarded as a liability for retailers with digitally-focused ambitions. A number of stores are already implementing a variety of experiences that merge the physical and the digital (or the “phygital”, as it is popularly known).
- Sephora, Rayban, and Burberry have augmented reality mirrors where you can see what you look like without trying anything on.
- Macy’s gets targeted offers directly to smartphone users while they are in the store.
- Sainsbury’s will give you real-time price comparisons on your smartphone while you are in the store.
- Sport Chek digitally projects clothing on mannequins.
- You are finding more and more BLE beacons and Click N Collect and contactless payment options.
- See what’s possible at Canadian Tire Company who are using many state-of-the art in-store digital experiences.
Phase 6: Let’s bring the entire store to your home along with an immersive retail experience.
The emergence of virtual reality will likely bring a whole new dimension – literally — to the customer and retailer experience. The customer’s living room could be transformed into your store or your customer could try out your products virtually from the comfort of their home. See what Merrill is doing in VR.
It is really an exciting time to be in retail as this industry continues to progress towards seamless stitching of the digital, physical, augmented and virtual worlds for their customers.
While online and mobile buying habits differ worldwide, the general trend is clear. We are living through a retail golden age, and it will be those retailers that fully embrace a customer-centric approach, delivering the digital and physical experiences that today’s consumers expect, that get a share of the jackpot.
While some retailers will still be debating whether they should adopt an experience-led business model or continue trying to compete with a transaction-led strategy, the simple fact remains that brands are competing in terms of customer experience, whether they like it or not.
Thankfully, it isn’t too late for retailers to start making real strides with their experience in a bid to keep pace with the competition and the customer. As the next digital disruptor in retail ponders its strategic move, the pressure will be on established and emerging retailers to make sure they’re meeting the next wave of expectation from their customers. Because as long as the customers are satisfied, your business is ahead of the curve.
If you want to hear from your retail industry peers regarding their transformation journey, do not forget to attend the Retail Supersession at EMEA Adobe Summit 2016_ at the Excel Centre in London on May 11, 2016._
And learn more about the new Experience Business in Adobe’s Insight Report 2016: Customer Experience Management in Retail.