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Driving Footfall In-Store Through Digital Innovation In-Store Is Sti Ll the Primary Revenue Earner

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Driving Footfall In-Store Through Digital Innovation In-Store Is Sti Ll the Primary Revenue Earner From Clicks to Bricks Driving footfall in-store through digital innovation In-Store is Sti ll the Primary Revenue Earner Consumers globally have rapidly In-Store Sales sales conversion benefi ts of adopted digital retail channels. Conversions are Higher physical stores. Online retail sales in the US are Compared to Online In the next secti on, we discuss expected to reach $370 billion in which digital services have the 2017, up from $231 billion in 2012. Another key factor that makes potenti al to drive in-store traffi c However, this does not ring a death physical stores indispensable and increase revenues. knell for brick-and-mortar retail to retailers is the higher sales stores. Despite the rapid double- conversion rates that they achieve. digit growth rate of e-business, A study indicates that during online channels are expected to 2011, US store sales conversion contribute to only around 10% of rates were 14 ti mes higher than all US retail sales by 20171 . The their e-business counterparts3. During 2011, US store physical store sti ll remains the Driving more traffi c in-store has an sales conversion rates primary point of sale for a large immediate impact on accelerati ng were 14 times higher proporti on of consumers. sales. than their e-business Digital technologies can help retailers match consumer interest counterparts. in online channels with the higher Online channels are expected to contribute to only around 10% of Figure 1: Percentage of Consumers Preferring In-store vs. Online Experience all US retail sales by 2017. Establishing relationship 51% with merchant 12% Getting answers 50% 13% Majority of Consumers for questions Prefer to Shop In-Store Better 40% A US survey shows that consumers customer service 16% prefer the in-store experience for a variety of reasons (see Figure 1)2. Physical stores help consumers In-store Online establish a relati onship with the merchant, get immediate answers Source: Wanderful Media Research, December 2012 to questi ons and get access to bett er service. From a retailer perspecti ve, this highlights the areas where they need to conti nue innovati ng in order to stay relevant to the digital consumer. 2 Digital Tools Drive Additi onal In-Store Revenues Digital technologies have These devices enable employees pervaded all segments of the to check-out consumers from consumer purchase cycle. They anywhere in the store while the allow customers to make purchase app on the device also allows In a survey conducted decisions, locate retail stores or associates access into the with more than 1,000 avail discounts. We identi fi ed company’s inventory. This resulted North American a set of 13 such digital services in an increase in the average that consumers can use across selling price and the number of shoppers, 48% the purchase cycle. All of these items sold in 2011 as compared indicated that helpful services are relevant at diff erent to 2010. The use of mobile points of the purchase cycle – devices had an impact on the store associates from customer communicati on to total retail sales for Nordstorm, motivated them to aft er-sales customer relati onships which jumped by 15.3% in the fi rst spend more in-store. (see Figure 2). quarter of 2012 as compared to the same period in the previous Interesti ngly, retailers are already year4. using some of these digital services and seeing positi ve These 13 services independently Booking and Online Shopping results. For instance, in mid- have the ability to drive both List services. Both these services 2011, Seatt le-based fashion traffi c and revenues for a retailer. have high up-selling potenti al and and beauty retailer Nordstrom However, our experience in the provide strong diff erenti ati on in rolled out 6,000 mobile payment retail sector indicates highest terms of customer experience devices across 117 of its stores. interest levels for Appointment against competi tors. In additi on, Figure 2: Digital Shopper Services and the Consumer Purchase Cycle Customer Communication Sales promotion Sales relationship s n r o e To find To benefit To prepare To be advised To facilitate To be ti m information from the purchase and the supported a o t t c about a retailer discounts reassured in transaction after their s e u easily their choices purchase p C x e Store Locator e-/m-coupons Shopping list apps Appointment M-payment Multichannel s loyalty booking n s o e programmes ti c i a t v c r e e s p x r Store Service e Online personal e p e happenings comparison tool shopping / Click & Reserve s p e o “coaching” h h t s l g a n t i ti g e i e D m Retargeting Product Locator Virtual product trials Source: Capgemini Consulti ng Analysis 3 the availability of mature of in-store sales advisors who increases the consumer’s average technologies for both these assist shoppers and recommend shopping basket size due to services facilitate technical relevant products in line with up-selling of complementary deployment and easier service their requirements. This, in turn, products. It also records consumer adopti on with several months’ can encourage customers to data prior to scheduling, which lead ti me. We believe these increase their spend. In fact, in a can be used for follow-ups in the two services should form the survey conducted with more than case of no shows or no purchase. initi al focus for any retailer 1,000 North American shoppers, Several retailers have started that is looking towards digital 48% indicated that helpful store implementi ng Appointment technologies as a means of associates moti vated them to Booking services. Home Depot driving physical in-store traffi c. spend more in-store5. is one such retailer that has already implemented an in-store Appointment Booking The Appointment Booking service appointment maker; the service Service Drives Up-sell provides a diff erenti ated off ering allows customers to schedule compared to pure online players appointments through the website The Appointment Booking service due to the presence of dedicated (see insert)6. revolves around the concept sales advisors. The service also Appointment Booking Service: Home Depot In-Store Appointment Maker Home Depot, in an eff ort to provide a consultati ve dimension to its self-service/DIY products, has In-StoreAppointmentMaker implemented an in-store appointment maker Schedule your initial in-store appointment with a Home Depot specialist. applicati on. The app is very detailed, allowing To schedule an appointment with a particular associate or to schedule a follow-up appointment, please contact the store directly. customers to identi fy their niche requirements 1. Select Product & Store based on specifi c types of products, via an online Product: Select a Product form. Users can also select stores anywhere Store: Select a Store between 5-100 miles from where they live. The app also provides an opti on to make that store the ‘default’ choice so that the next ti me the customer has to access the app, it avoids duplicati on of 2. Select Date & Time eff orts in fi lling out all the details once again. The 3. Enter Contact Information user subsequently schedules the appointment by selecti ng a convenient date and ti me. Source: Home Depot website 4 Online Shopping List the customer is in-store, the products according to consumers’ Service Catches the applicati on also informs about shopping requirements. Tesco is Customer Early in the useful relevant products previously one such retailer that has already not considered, thereby increasing implemented an online shopping Purchase Cycle the store’s up-sell potenti al. list service called Tesco Finder The Online Shopping List service Online shopping list services help that enables customers to create allows consumers to create lists, secure brand loyalty by narrowing and share lists online, and add plan their purchases in advance down the customer interacti on products to the list in real-ti me and get relevant informati on to one parti cular channel. It while at the store (see insert)7. on selected products, such as increases the average shopping availability and off ers. Once basket by recommending relevant Online Shopping List: Tesco Finder Tesco, in its eff ort for providing customers with a diff erenti ated experience, has introduced several < Groceries < Tesco direct digital services. One of these services is a Digital Shopping List; this service is loaded with many Groceries Home features allowing users to easily identi fy their needs Book a slot Great oer on International tour and go about fulfi lling them with ease. Book detailsFavourites The Digital Shopping List service, named Tesco Shop FREE Click & Collect from over 750 scores Finder, in additi on to fi nding the nearest Tesco Basket 26.17 Technology & Gaming + store, also allows consumers to build a shopping Orders list by browsing through various product categories Favourites Orders Home Electrical + Checkout and departments, share the list with friends and Home Furniture + add products to the list while they are in the store. The service displays special off ers on products, store Basket 2 pending orders DIY & Car + ti mings, product availability in the selected store Garden + Shopping list + Add item and product details. Consumers can use the mobile Milk version of the service to locate products within the Toys + Rice akes store and add them to the list by simply scanning the barcode. A few of the other features, such as voice-enabled product search and in-store navigati on, let consumers save ti me in fi lling up the list or picking up products from the store.
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