HOW RETAIL TECHNOLOGY CAN BRING CUSTOMERS BACK TO BRICK AND MORTAR STORES

Experience over Convenience

Despite the many sobering stats that some interpret

as brick-and-mortarrsquos swan song there is hope for

innovative retailers According to a Pew Research

study 78 of American shoppers consider it

ldquoimportant to be able to try the product out in

personrdquo and 64 of American shoppers say that

all things equal they prefer buying from physical

stores to buying online However in a landscape

where all things are not equal itrsquos up to brick-and-

mortar retailers to leverage technology to keep their

customers coming back

Customers demand customizable dynamic

shopping solutions that provide them a measured

quality (not quantity) of buydecision information

that recognizes their preexisting preferences

and demographic profile This makes shopping

anything other than it chore it makes the

experience fun Customers expect more than just

a very large space filled with products to browse

They expect ingenious forms of entertainment

and delight Innovative retailers must invest

heavily in Internet of Things devices and software

that leverages augmented reality store associate

knowledge baserelationship and yes even

virtual reality

Retailers are shuttering brick-and-mortar stores by the

thousands as online sales continue to peak Well-known

brands such as Payless Shoes JC Penney RadioShack

and rue21 continue to close an ever-growing number of

locations across the globe

Meanwhile e-tailers like Amazon see sales blossoming

as new tech such as the Alexa digital voice assistant

consistently surprise and delight customers and

provide fresh innovative ways to enhance their

shopping experiences

Clearly physical retail storefronts face a disturbing

upheaval in the face of growing consumer

dependence on online shopping destinations

especially now that e-commerce sites make online

shopping easier than ever with new innovations in

ldquoCredit Suisse Group AG analyst Christian Buss

reports that year-to-date store closings are already

outpacing those of 2008 when the country was

at the peak of a recession There have been 2880

closings announced so far this year compared with

1153 for this period in 2016 Itrsquos estimated that there

could be 8640 store closings in 2017 higher than the

2008 peak of about 6200rdquo (3)

ldquoThe number of Amazon Prime memberships in

the US jumped 35 last year to 54 millionrdquo (4)

In the fourth quarter of 2016 nonstore sales topped

$14549 billion a 128 increase compared with the

fourth quarter of 2015 according to data released

in January by the US Commerce Department Based

on the Q4 jump in nonstore sales e-commerce sales

alone stand to grow about 160 during the same

periodmdasha growth rate not seen since 2013rdquo (5)

ldquoMore than 10 percent of US retail space or

nearly 1 billion square feet may need to be closed

converted to other uses or renegotiated for lower

rent in coming years according to data provided

to Bloomberg by CoStar Grouprdquo (1)

ldquoThere have been nine retail bankruptcies in 2017mdash

as many as all of 2016 JCPenney RadioShack

Macyrsquos and Sears have each announced more than

100 store closures Sports Authority has liquidated

and Payless has filed for bankruptcy Last week

several apparel companiesrsquo stocks hit new multi-

year lows including Lululemon Urban Outfitters

and American Eagle and Ralph Lauren announced

that it is closing its flagship Polo store on Fifth

Avenue one of several brands to abandon that

iconic thoroughfarerdquo (2)

Still not convinced brick-and-mortar stores need to evolve Here are some cold hard facts to consider

location-based apps that utilize deeper data

analytics and machine learning to provide an

intuitive immersive experience for shoppers

that will keep them coming back

If physical retail space is to survive businesses of all sizes must adapt and

create new method to ldquowowrdquo customers with unwavering in-store experiences

Yoursquove Got a Friend in Mehellip

Store associates are the first line of defense in brick-

and-mortar customer engagement success A sullen

disengaged employee will fill up pages of negative

Yelp reviews very quickly and can often damage

brands Engaged knowledgeable associates will

keep consumers returning as relationships are built

Experience over Convenience

Despite the many sobering stats that some interpret

as brick-and-mortarrsquos swan song there is hope for

innovative retailers According to a Pew Research

study 78 of American shoppers consider it

ldquoimportant to be able to try the product out in

personrdquo and 64 of American shoppers say that

all things equal they prefer buying from physical

stores to buying online However in a landscape

where all things are not equal itrsquos up to brick-and-

mortar retailers to leverage technology to keep their

customers coming back

Customers demand customizable dynamic

shopping solutions that provide them a measured

quality (not quantity) of buydecision information

that recognizes their preexisting preferences

and demographic profile This makes shopping

anything other than it chore it makes the

experience fun Customers expect more than just

a very large space filled with products to browse

They expect ingenious forms of entertainment

and delight Innovative retailers must invest

heavily in Internet of Things devices and software

that leverages augmented reality store associate

knowledge baserelationship and yes even

virtual reality

Retailers are shuttering brick-and-mortar stores by the

thousands as online sales continue to peak Well-known

brands such as Payless Shoes JC Penney RadioShack

and rue21 continue to close an ever-growing number of

locations across the globe

Meanwhile e-tailers like Amazon see sales blossoming

as new tech such as the Alexa digital voice assistant

consistently surprise and delight customers and

provide fresh innovative ways to enhance their

shopping experiences

Clearly physical retail storefronts face a disturbing

upheaval in the face of growing consumer

dependence on online shopping destinations

especially now that e-commerce sites make online

shopping easier than ever with new innovations in

ldquoCredit Suisse Group AG analyst Christian Buss

reports that year-to-date store closings are already

outpacing those of 2008 when the country was

at the peak of a recession There have been 2880

closings announced so far this year compared with

1153 for this period in 2016 Itrsquos estimated that there

could be 8640 store closings in 2017 higher than the

2008 peak of about 6200rdquo (3)

ldquoThe number of Amazon Prime memberships in

the US jumped 35 last year to 54 millionrdquo (4)

In the fourth quarter of 2016 nonstore sales topped

$14549 billion a 128 increase compared with the

fourth quarter of 2015 according to data released

in January by the US Commerce Department Based

on the Q4 jump in nonstore sales e-commerce sales

alone stand to grow about 160 during the same

periodmdasha growth rate not seen since 2013rdquo (5)

ldquoMore than 10 percent of US retail space or

nearly 1 billion square feet may need to be closed

converted to other uses or renegotiated for lower

rent in coming years according to data provided

to Bloomberg by CoStar Grouprdquo (1)

ldquoThere have been nine retail bankruptcies in 2017mdash

as many as all of 2016 JCPenney RadioShack

Macyrsquos and Sears have each announced more than

100 store closures Sports Authority has liquidated

and Payless has filed for bankruptcy Last week

several apparel companiesrsquo stocks hit new multi-

year lows including Lululemon Urban Outfitters

and American Eagle and Ralph Lauren announced

that it is closing its flagship Polo store on Fifth

Avenue one of several brands to abandon that

iconic thoroughfarerdquo (2)

Still not convinced brick-and-mortar stores need to evolve Here are some cold hard facts to consider

location-based apps that utilize deeper data

analytics and machine learning to provide an

intuitive immersive experience for shoppers

that will keep them coming back

If physical retail space is to survive businesses of all sizes must adapt and

create new method to ldquowowrdquo customers with unwavering in-store experiences

Yoursquove Got a Friend in Mehellip

Store associates are the first line of defense in brick-

and-mortar customer engagement success A sullen

disengaged employee will fill up pages of negative

Yelp reviews very quickly and can often damage

brands Engaged knowledgeable associates will

keep consumers returning as relationships are built

Keeping It Real (and Augmented)

Augmented reality (AR) has the potential to attract

game-loving consumers to stores in an attempt to

make shopping not just about acquisition but also

about in-store socialized gaming Retailers are using

this technology which integrates elements of virtual

reality to alter how users interact with the real world

to revolutionize the shopping experience

In March liquor retailer Beam Suntory announced

a partnership with the music-finding app Shazam

to provide a ldquomassively scaled augmented reality

(AR) platformrdquo (6) Using Shazamrsquos audio and visual

recognition app customers at high-end spirits stores

will be rewarded with a ldquogamification experience at

point of purchaserdquo especially for the marketing of

high-end tequila during Cinco de Mayo The app will

be able to scan codes to access 360-videos overlaid

product visualizations and 3D animation wrapped

in a ldquoco-branded AR interactive memory gamerdquo

Consumers will experience exclusive coupons

contest entries and other bonus content to make the

shopping experience into a game

While virtual reality (VR) has not yet reached the

level of tech standards to make it viable across retail

chain in general some innovators are finding ways

to leverage the tech for special retail events In 2015

London mall chain Westfield showcased key fashion

trends using virtual reality equipment on site

In the end utilizing cutting-edge technology depends on a retailerrsquos willingness to invest in the future ndash invest

in technology that attracts and retains customers who are seeking an experience that folds relevant data

crunching inside a game-like experience tailored to individual preferences and desires A partnership with an

industry leader in cross-platform retail solutions can stem the tide of disengagement many storefront retailers are

experiencing and build increased profits dazzling customer engagement and brand loyalty While Amazon and

the like may be scoring sales slam dunks the ball is still firmly in the brick-and-mortar court and itrsquos anybodyrsquos ball

game

ELEKS provides highly scalable cross-platform solutions that can transform brick-and-mortar operations into

immersive and fun experiences for savvy customers Contact us to find out more

More than 10 of US retail space may need to be closed in coming years

according to Bloomberg Itrsquos up to brick-and-mortar retailers to leverage

technology to get their customers back

ldquoThe installation consists of three elements

interacting with giant video walls showcasing this

seasonrsquos major fashion trends taking a trip into a

colorful dreamscape using Oculus Rift virtual reality

goggles and using Edit Me a giant touchscreen

to find outfits of any color or style located in

any of Westfieldrsquos many retailersrdquo explained the

International Business Times (7) However VR

currently has limitations due to equipment scalability

and unfamiliarity ldquoVR is more exciting but right now

it faces a higher barrier Thatrsquos because consumers

arenrsquot yet accustomed to wearing VR devices (even

at home) or to doing anything with it beyond playing

gamesrdquo states Dan McKone Managing Director

and Partner of LEK Consulting and coauthor

of Edge Strategy A New Mindset for Profitable

Growth (8)

McKone offers rational advice for retailers

considering AR or VR ldquoAnyone interacting with

an AR or VR retail application must immediately

understand the value proposition if they are to

keep using it To help that along explain how the

application solves the consumerrsquos problems and

naturally extends the brandrsquos connection to the

consumerrdquo

To attract and retain such associates retailers often

find that equipping them with the right mix of digital

POS and mobile tools is key

Developing a customized user-friendly associate

mobile device and app system can improve sales

reduce stock-outs and improve promotion execution

by providing associates with on-the-go pricefeature

data as well as inventory movement info will help

create an immersive experience for the customer

because they soon realize ldquoI matter to this associate

My happiness is their goalrdquo Consumers avoid the

ldquoI-canrsquot-find-my-productrdquo frustration In addition

by integrating mobile solutions across stores

consumers are guaranteed a uniform experience

from Times Square to Main Street The proper

mobile tool can centralize all digital tools into one

solution and facilitate easy reporting for sales and

customer reengagement

In short when your customer enters the shop

they know they have a friend waiting to help them

experience retail nirvana with the right tools

Sources

httpswwwbloombergcomnewsarticles2017-04-07stores-are-closing-at-a-re-cord-pace-as-amazon-chews-up-retailers

httpswwwtheatlanticcombusinessarchive201704retail-melt-down-of-2017522384

httpwwwpymntscomnewsretail2017american-retail-stores-closing-at-faster-pace-than-during-2008-recession

httpmoneycnncom20160126technologyamazon-prime-memberships

httpswwwdigitalcommerce360com20170208online-will-grow-three-times-fast-er-retail-industry

httpwwwmobilemarketercomexmobilemarketercmssectorsfood-bever-age24609html

httpwwwibtimescouklondon-westfield-inition-uses-oculus-rift-virtual-reali-ty-showcase-future-retail-1494812

httpshbrorg201609virtual-and-augmented-reality-will-reshape-retail

ABOUT ELEKS

ELEKS helps clients transform their businesses digitally by providing expert

software engineering and consultancy services

We deliver high tech innovations to Fortune 500 companies big enterprises and technology challengers

improving the ways they work and boosting the value they create for the modern world

Our 1100+ professionals located in the Delivery Centers across Eastern Europe and sales offices in Europe

the US and Japan provide our clients with a full range of software services These include dedicated teams

Data Science QA UXUI RampD IoT product development and technology consulting

For more information visit wwwelekscom

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