NRF16: Digital customer engagement takes giant leap forward
By Lyle Bunn, Principal, BUNN Co.
Every retailer is confronted with the same challenge. Making the bricks and mortar attractive as a destination has been met by any combination of the 3P's, product, price and promotion. As digital-savvy consumers spawned the "showrooming" phenomenon as a way to tap into the best deal, equally savvy retailers are implementing shopper conversion strategies with their sights on increasing customer choice and convenience through omnichannel and focusing on the productivity of places (physical, online and mobile), processes and people.
This is where digital media shines.
Retail has had the luxury of moderate changes, but that is a luxury ending fast. Retail is becoming a torture as stores and brands must adapt quickly or die, and for service providers that believe they have the solutions. Virtually every presenter at the National Retail Federation's January 2016 conference spoke about the importance of digital-enabled customer experience and experimentation based on strong investment assessment. "The change of technology is coming at us so quickly that we've had to be more agile in assessment," noted Scot Scott Emmons, head of the Innovation Lab, and enterprise architect, Neiman Marcus.
The sentiment during the NRF conference was that customers have been signaling their new expectations and long-term trends, and that retailers have been chasing "digital" even as it has been evolving very rapidly.
The retail industry is one of the key drivers of the U.S. economy, generating more than $2.6 trillion impact on gross domestic product each year and supporting 25 percent of American jobs in 3.8 million retail establishments across the country. Competition for consumer spending is fierce, all the more so in the rise of online and mobile commerce. Twenty-four percent of all retail growth in 2015 went to Amazon.
As retailers look to customer experience, engagement and a multichannel, omnichannel, "digital" is an inherent element in the realization that stores must be a destination, that showrooming can be overcome and that the retail chain/location is a brand worthy of care and development.
In co-presenting with Josh Johnson, senior manager, digital innovation for AT&T, Senior Vice President of Marketing and Creative Services for digital signage provider Stratacache Russell Young noted: "It is the consumer that is multichannel. Disconnected silos of digital experience can be confusing, and so the elements of the on-location experience including welcome, informing, connecting, selling, serving and the rewards for loyalty must express the retail model and amplify the brand."
A "unified commerce" (or "U-commerce") model was outlined as a step beyond omnichannel, as it includes all the functions required to serve the customer where, when and how they desire. U-commerce offers a single view of the customer, their transactions and interactions with the brand by reducing the friction as systems fit together, including point-of-sale, inventory, merchandising, supply chain, business intelligence / analytics, e-commerce and customer relationship management.
According to research by IHL Group and reported in the RIS 2016 Store Systems Study, in-store technology spending will increase by 3.9 percent in 2016, with key spending increases planned for digital signage (29 percent) and mobile devices for associates (24 percent). A full 43 percent of retailers said they would invest during the next 12 months.
In-store digital media brings discovery, surprise, information, engagement, rest, reset, exploration, chance encounter and the possibilities of purchase.
These were the basis of the recognition given to Sport Chek stores in 2013 and 2014 Awards of Excellence by the Digital Screenmedia Association (now called the Interactive Customer Experience Association).
Marco Ventura of T1V noted that "at Lowe's the display is an engagement device. Digital will enable smaller stores in particular through customer engagement and inventory visibility." The display shows a full-size refrigerator and through a touchscreen, allows consumers and associates to compare models, leading to selection and ordering for shipment.
British Telecom used its mock "Alexander Black" fashion store to demonstrate technology-enabled retail including branding display, on-shelf messaging, triggered display and an advanced fitting room with mirrored, interactive display, through which the combination of tagged items and customer interaction could improve the shopping experience.
Lyle Bunn provides digital media industry analysis, education and counsel. He can be reached at Lyle@LyleBunn.com.
Cover photo courtesy of The National Retail Federation.