How our online and real world shopping experiences are converging

Well as often happens when the pendulum swings too far in one direction, a new balance has been found, one where retail is both an online and real world play. The balance opens up some interesting dilemmas and potential shifts in power and margin.

Take for instance Apple’s latest acquisition WiFiSLAM. (SLAM stands for Simultaneous Localization and Mapping.) WiFiSLAM  is a GPS for indoors which promises to provide content to users based on their location and movement within a room, but that is not all. WiFISLAM offers content that correlates to bar codes on nearby products and it can also pinpoint the location of your friends, allowing for proximity based social media (great for events and customer get customer offers).

With this move we are talking mobile Point of Sale or Point of Experience content driving behavior and perceptions. While currently more focused on the outdoor GPS mapping, Google have also been looking at mapping internal environments, with an eye on the retail space.

Amazon have a version in practice already, one where you can scan a bar code and compare the price of a matched item in the Amazon store. You can grab the app at http://www.amazon.com/gp/feature.html?ie=UTF8&docId=aw_ppricecheck_iphone_mobile

To date, Amazon has been able to build a wealth of information about the movement of individuals through retail environments. They have data based insights that model foot traffic routes, where a customer will pause and for how long. This information has the potential to be fed back to a redesign of the retail environment.

That’s is all well and good if the retailer can close the loop on information, but what if the retail space is just a showroom for a price attacking retail model like Amazon?

Will retailers demand bar codes from manufacturers that are specific to their own store? You would imagine so. If that is the case wouldn’t an intermediary like Apple or Google best manage the supply of data between “show room” and the online retailer. Will the “show room” retailer and the online retailer share the margin? I’d say yes, that is where it is going.

What’s more I would say that bricks and mortar stores will evolve into a showroom model that may be more about staging experiences than about holding inventory.

I can see a big role for events here, the type that attracts 3,000 to 12,000 people in one place. Micro, mobile pop up show rooms can mingle more with the people and provide fresh leads to online retailers.

Is the bricks and mortar model a brand builder and customer acquisition model? Well I would say “yes” again with online e-tailers, such as online jewelry store BaubleBar and clothing e-tailer Piperlime, opening real world stores with the specific objective of building the brand. The online mens store Bonobos, successfully opened an appointment only showroom in 2011.

What we are seeing is the need for touch and feel, the personal and visceral experience in the branding building and shopping process. The showroom retailer of the future will be designed around more engaging and emotive customer experiences. They will be more a destination that a holder of inventory.

Google 2012 studies report customer across channel behavior as circuitous, with 17% visiting a store then buying online, 32% researching online, visiting a store to check out the item and then buying online. (Crazy making for retailers I know). Customer behavior is calling for an omni channel business model.

 

Some retailers already have an omni channel model, like www.ritani.com who have built the perfect clicks and brick proposition for the purchase of diamond jewelry. Here the online presence is the high value product brand, Ritani, working in partnership with bricks and mortar retailers.

 

The Ritani model allows customers to visit the store to view different designs, custom design their ring online and visit the store to collect the designed ring, and return the ring if its not to their expectation. To achieve this, Ritani created relationships with multiple bricks and mortar jewellers. Ritani have also created high touch online services, such as the one on one Virtual Gemologist consultation, to support customers in their decision making.

 

Designing the more engaging customer journey across brand touch points will be the competitive point of difference for retail brands in the new omni channel marketplace. It is not just about tracking the circuitous behavior or looking at the patterns of movement, it will be about emotional experiences, and creating attraction, to keep them in the flow with your brand. Before you hand over your power to the Google, Apples and Big Data guys, get your strategy right around emotional attraction, know what is going on in your customer’s inner world. If you do, you will always have your hands on the levers of power.

 

 

Louise Kelly

Managing Director

Hearts and Minds

www.heartsandminds.com.au

 

Founder Thought Leaders Circle

http://www.thoughtleaderscircle.com

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