Yes I know, ‘phygital’ (retail) maybe just a buzzword that’s being trotted out again, but it’s having a renaissance; because the widely anticipated, and seamless merging together of physical and digital retail to better serve the customer, has a way to go. What’s more, I see an inequality in this confluence.
E-tailers are moving into physical retailing, the best bringing their online offering to life and creating memorable experiences for customers, whereas bricks and mortar retailers (despite accounting for 90% of sales) have yet to widely deploy digital technologies that meet shoppers’ expectations – which are being shaped online.
To better understand what retailers need to do to ensure the store retains its allure, we worked with Planet Retail RNG to take a closer look at what shoppers actually want and value from the physical store, and overlaid this with how retailers are responding.
The subsequent report ‘From Analogue to Automated: Retail in the Connected Age,’ reveals some sobering stats but, on the plus side, some great opportunities too. Here are my key take outs:
A fair and accurate price, consistent across channels, remains the key purchasing factor for the vast majority of shoppers: Our research shows that 57% of customers are losing faith over pricing inconsistencies and inaccuracies. Little wonder when they can wander around a store and check the price on the retailer’s own site or competitors’. Often prices can vary across channels, items can be bought cheaper elsewhere and what’s charged at the check-out can be different to what’s on the shelf-edge. Given how many offers and promos retailers run at any one time, it’s unsurprising that the ticket price may sometimes be wrong. Nevertheless it’s damaging consumer trust. Only 18% would shop at the store again with confidence.
AGILE PRICING WILL NOT SCARE AWAY SHOPPERS: 65% of customers welcome agile pricing in-store if it saves them money or reduces waste. With online retailers able to adjust prices in the blink of an eye, physical retailers need to be able to do the same to compete. However, we found that many retailers worry about negative consumer reaction. In reality, price savvy and environmentally conscious consumers want technology to give them the best deals and help tackle retail waste.
RETAILERS ARE WASTING MONEY ON OUTDATED MANUAL SYSTEMS: 67% of retailers spend up to 4.99% of average monthly store turnover making price and promo changes. That’s equivalent to approximately $104 billion in sales across the 10 markets surveyed. It’s unbelievable that despite the changes that have happened in retail, price labels in-store are still changed by hand, by store associates who would rather be serving customers. The cost to retailers’ bottom line is staggering and it’s impairing the store experience.
SHOPPERS DESIRE DIGITAL TECHNOLOGY: Over two thirds of shoppers want technologies that enhance their experiences in-store – 33% want promotions sent direct to their mobile devices; 31% want Electronic Shelf Labels (ESLs) to show accurate, real-time prices, promotions, and detailed product information; and 27% want to be identified as a loyal customer. Retailers who can’t meet expectations around pricing, promotions and availability, and match the information shoppers can get online, such as competitors’ prices, stock levels and more will lose consumer confidence.
It’s fair to say that the case for deploying digital technologies that optimise efficiencies, deliver the customer a better experience AND better value in-store, has never been greater. The store is not dead and even over five to ten years we expect 75% of sales to still take place in retail stores. But it’s clear to me that it’s time to ‘phygital’ to ensure it remains fit to meet shoppers’ requirements.
Download the full report here.