By Mark Thomson, Director, Retail Industry Solutions at Motorola Solutions.
The inexorable rise of online shopping has turned the competitive screw on the high street. With well reported slow recovery bringing revenues and margins under pressure, retailers continue to have to make a crucial decision: Whether to increase their investment in store designs and merchandising to attract shoppers, or harness existing IT and communications innovations to increase footfall and ultimately drive up revenues in their physical outlets.
I'm here to convince you that the above decision is becoming increasingly irrelevant, thanks largely to the smartphone. Smartphones have brought the internet to shoppers' fingertips. Their exploding popularity has clearly demonstrated that the public has an insatiable appetite for information at all times, not just at work or home. This applies just as much to shopping trips as it does to almost any other activity. UK newspaper the Sun polled its readership on when they use their phone: 62% of respondents claimed they use their phone whilst shopping. In previous years, this will just have been texting or phone calls, but now connected devices are providing an always-available source of knowledge, which was previously the preserve of online retailers.
The rise of the smartphone represents a huge opportunity for 'bricks and mortar' outlets. They can now merge the more tactile aspects of the purchasing decision that shoppers can only find in-store, with the limitless information and stock they can access online, and even to merge their in-store and online presences.
The first step in creating this experience has been 'showrooming'(shoppers using phones to find out more about products and identify where they are cheaper), which could be seen as a threat but we have also seen it adopted in some smaller stores where customers are invited to interact, play and learn about products instead of being overtly 'sold' to. In this case the retail store is, as the subtitle suggests, not only a sales location, but a showroom – displaying the best aspects of a product and allowing the customer to gain a greater interactive insight into it: Apple and Disney stores are fantastic examples of the showrooming concept in action.
For retailers where fun and the brand are not a key selling point, the smartphone still offers opportunities that did not exist until very recently. Shopper behaviours can be analysed in various ways from video surveillance to wifi analytics, where the Wi-Fi id of customers' smartphones can be used to gain insight into customer behaviours or their movements in-store (a lower cost option than using phone network data). This means managers can analyse the retail outlet's overall traffic or examine the effectiveness of a specific store layout, display or promotion. Real-time analytics, based on data gathered from the store's own wireless network, could become a vital element in tailoring the shopper's experience and helping physical outlets become more competitive with the online. In return, customers receive free wifi access as well as promotions relevant to them and the type of shopping they are undertaking on that day – much more effective than random promotions sent to the home.
Recent years have seen physical retailers struggle for relevance but mobile technology represents an opportunity for them to take up a new position in the market utilizing multiple channels in harmony. By using technology to inform their staff and entertain their customers, bricks 'n' mortar outlets can take advantage of the natural tactile and immersive shopping experience whilst supplying a new depth of information to go beyond the experience offered by online stores. Mobile devices acting as a bridge between the in-store and online experiences is the future of retail and will undoubtedly open up a world of interesting opportunities.