Smart Shopping: 3 In-store Retail Innovations

Market saturation and increasing e-commerce sales have pushed store retailers to review their business concepts. “Many retail stores offer the same or similar products as you do. And anything is available online. If the only thing your customers can hope for is a product, then you’re in direct competition with every other retailer online or down the street,” Bob Phibbs, a retail consultant and speaker, illustrates the situation. Customers no longer care only about consuming another product, but are looking for unique shopping experiences which they could later share with others. They keep switching between online and offline brand channels to make informed decisions on their purchases. As the boundary between e-commerce and in-store shopping is getting blurred, retailers have started implementing innovative solutions to create a connected retail experience across all brand touchpoints to increase their business efficiency.

Virtual reality (VR) experience

Some Lowe’s Home Improvement stores offer 3D projections of bathrooms and kitchens to visualize complex design projects. Customers can design their room with an iPad app and get a consultation from trained staff. First, they need to select a room size and shape, then colours and materials for the walls and floor. Next, they need to choose products and adjust their position in the room. They can preview their design through an Oculus Rift headset. They can explore a full-size 3D image of the room and make some changes. Once the design is ready, they can export it to YouTube 360 and see it on their smartphone through a Google Cardboard or share it with others.

In some Tommy Hilfiger’s clothes stores, customers can watch his fall 2015 fashion show through a Samsung GearVR headset. They see a 360-degree 3D image of the runway and some backstage moments. “These days, you can’t just wait for people to come into the store and try on your jackets. You have to provide entertainment. It’s not about turnover by square foot anymore. It’s about surprise by square foot, or newness,” Daniel Grieder, Chief Executive of Tommy Hilfiger Corporation, explains the decision to launch in-store 3D fashion show projections.

The effect of surprise is reinforced by putting the same clothes next to the headset spot. This setup makes them instantly shoppable, comments journalist Rachel Arthur. In her opinion, it should also help retain client interest in a new collection until it reaches stores.

Radio frequency identification (RFID) loyalty cards

Rachael McBrearty, Chief Creative at Cisco Consulting Services, claims that loyalty programs should offer a personalized shopping experience to keep customers loyal to a brand. Retailers need to carefully analyze their customers’ data to better understand their preferences and needs. This information can be utilized in content marketing via radio frequency identification (RFID) loyalty cards. For example, once a customer enters or passes a store, RFID sensors can easily identify him / her and trigger personalized advertisements on nearby displays.

McBrearty also mentions a few other benefits of RFID loyalty cards. First, they can speed up checkout: customers do not need to show their loyalty or credit card to prove their identity as they are automatically identified. “Assuming that 70 percent of a store’s revenues come from loyal customers, and that targeted offers and other content will cause 5 percent of them to buy more, the result will be a 3.5 percent conversion improvement,” McBrearty points out another benefit. In addition, RFID infrastructure can increase inventory management efficiency and sales: retailers using RFID product tags can better monitor products which are out of stock and improve cross-selling. Product tagging can bring “99% inventory accuracy, a 50% reduction in out-of-stocks, a 70% reduction in shrinkage, and sales increases in the 2%–7% range,” estimates RFID expert Bill Hardgrave.

The Internet of Things (IoT)

The Dandy Lab, a London-based men’s lifestyle shop, has developed a complex network of electronic devices which collect and exchange data, known as the Internet of Things (IoT), to make a shopping experience more interactive and informative. For example, there are mannequins which can share product information and make special offers through a smartphone app. When a customer holds or wears some item of clothing, a camera scans it, and a visual search engine, Snap Fashion, displays other items which would match or might interest him / her. There are also products with integrated near field communication (NFC) which provide information about British designer brands in stock.

In addition, IoT infrastructure can be used for real-time data analytics. Information processing gives valuable insights on how to increase customer engagement or arrange product displays. It also helps identify repeat customers and strengthen their loyalty with special offers. Extra value can be extracted by contrasting in-store and e-commerce data. For example, The Dandy Lab can better understand its operations, customer preferences and ongoing retail trends and properly utilize this information.

References:  [1] Bob Phibbs, The Retail Doctor / [2] Nurun / [3]  Marxent / [4]  Rachel Arthur, Forbes / [5] Rachael McBrearty, Mediaplanet / [6] Oren Levy, Retail Merchandiser Magazine / [7] Cisco / [8] Sarah Pierson, Viewpoints Media