The Changing Face of Retail: How to Drive Traffic and Sales
The rise of online retail has led to the decline of brick-and-mortar shopping, as consumers choose the convenience of clicking and buying from their home over going to the mall. While e-commerce growth shows no signs of slowing, physical retail must shift into high gear to adapt to the reality of technology taking over the shopping process.
The temptation for physical retailers might be to price match online merchants in order to regain customers, but given the overhead costs associated with running physical stores, this “race to the bottom” is unsustainable. The results have been well-documented, and the inference is clear. For large retailers to stay afloat, aggressive price matching and cost cutting isn't enough.
To regain relevancy and increase their revenues, merchants must fundamentally transform physical retail into an experience that's personalized, rewarding and provides continuous value. This involves taking a page out of the playbook of their biggest nemesis — Amazon.com.
The Amazon Playbook: Any Thing, Any Time
Imitation is the sincerest form of flattery and, as such, retailers are constantly trying to emulate Amazon with their online businesses. However, what if that emulation could be extended to the shopper’s experience in-store? It can; here’s how:
When a consumer goes to Amazon or logs on to the retailer’s mobile app, Amazon automatically identifies who that shopper is, the type of membership he or she has, and serves up a personalized page accordingly. That page shows previous purchases, which items Amazon recommends to pair with those items, buyer reviews and special offers.
When a shopper enters a physical store, there’s a 90 percent chance they're carrying a smartphone with them. And according to Google, 84 percent of those shoppers use their device to help them shop while in-store. Location-based services can easily identify and authenticate a smartphone user upon store entry, enabling the shopper’s entire journey to be mapped. With that knowledge, it’s a no-brainer for retailers to use the shopper’s phone as a single touchpoint to interact and transact with them while in-store.
With the shopper identified, retailers can deliver an enhanced experience. Studies show that people who are shopping in-store value prompt service (54 percent), a personalized experience (30 percent) and smart recommendations (17 percent). Retailers can leverage the shopper’s mobile device to ping the user in-store with suggested products and customized promotions or discounts based on the shopper’s purchase history, online product searches, what’s in his or her online cart, and their loyalty status.
In addition, merchants can leverage the latest multifactor authentication technology to process in-store transactions securely and consistently. The shopper’s curated experience will drive not only repeat visits, but a higher purchase amount by each loyal shopper.
One of the major benefits of shopping on Amazon is the almost infinite array of items the retailer is able to offer either directly through its warehouses or through partner sellers that use “Fulfillment by Amazon” type services. This makes Amazon the go-to marketplace for anything a shopper may be thinking of buying.
This is an area that brick-and-mortar retailers need to expand on heavily. With a captive shopper in-store at time of purchase, retailers must extend that shopper’s transaction to include items that are not economical to be carried in-store, yet can be shipped from centralized warehouses. By using in-store levers and smartphone-based interactions, brick-and-mortar retailers can easily create what the industry has now termed “virtual aisles.” As a shopper browses in-store, he or she can buy in-store and online items in the same transaction.
This can further extend to each and every brand that the store carries, essentially matching the in-store experience with an online marketplace that includes goods carried by the merchant, as well as the entire inventory of goods from each brand, available for direct shipping. Imagine selecting a dress in-store, then receiving a whole array of shoe recommendations that could be shipped to your home. The upsell revenue opportunity is multidimensional for smart retailers.
Quick Checkout and Delivery
This is an area Amazon excels in, as the number of steps taken by a user to make a purchase can be reduced to just one click. Amazon already knows the shopper’s address and shipping preferences, making order and delivery simple. The e-tailer is also able to provide a rich checkout interface that includes dynamic pricing, multiple payment options, application of gift cards, Amazon and third-party reward point redemption, as well as special promos. Finally, the transaction is sealed with a digital receipt.
In-store checkout can emulate the Amazon experience. By moving the entire in-store checkout to an app, merchants are able to identify the shopper at the start of the checkout process and automatically apply all applicable coupons, rewards and offers, while enabling them to select from multiple payment types as well as possibly offer financing options and payment with alternative methods such as third-party points. At this time, alternate pickup arrangements and deliveries can also be included. By removing friction, retailers can significantly reduce checkout time, leading to greater conversions from shoppers entering the store, while creating a better customer experience — all of which lead to increased cart sizes and revenue.
Brick-and-mortar retailers cannot price slash their way to retaining and growing loyal customers. These customers know the retailer and have a relationship in place. The loyal customer is the retailer’s to lose. Merchants must “wow” customers, delivering the type of compelling, frictionless shopping experience that consumers are used to from Amazon, yet with the personalization that only a brick-and-mortar retailer can provide. Brick-and-mortar retailers must move beyond price as a differentiator and add value by creating experiences that evolve with each new purchase to build a relationship with each customer, which will keep them coming back for more.
Amitaabh Malhotra is the chief marketing officer of OmnyPay, an integrated platform for payments, loyalty rewards and offers that encourages consumers to use their mobile phone for all aspects of the buying journey.