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Jonathan Hull VP, Emerging Experiences Twitter
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Controlling the Retail Environment Through
Digital Brand Immersion

Although touch screens have dramatically altered consumer expectations, retailers have mostly struggled to deploy innovative digital experiences at scale beyond basic store navigation or the occasional integration of tablets. In a world where everything is increasingly available everywhere, wowing customers to drive sales is more important than ever. As a result, innovative digital experiences are increasingly challenged to move from the lab or the presentation deck to the sales floor. We have identified five factors to drive implementation and move from prototype to improved customer experience.

Retailers have lost control of their stores. For that, you can blame the smartphone.

The proliferation of the iPhone and Android-based devices has dramatically altered consumer expectations and behaviors. Life is increasingly lived online and mobile devices act as always-there, always-on valets. In just about any environment, people want to be online — communicating, sharing and researching. This is especially true in stores, where consumers can use their mobile Web browsers and apps to compare prices and products across retailers. When threatened with commoditization, retailers see their margins come under pressure from being the lowest price option or price matching. And what’s strange is that the storeowners are letting this happen by not giving shoppers the digital experiences they so clearly want. Some of the more progressive retailers and brands have tried to regain some control and become more digitally interactive in-store. However, in talking with our retail clients, they often cite past failures and/or implementation constraints as primary reasons why they haven’t made much progress.

A big distraction that keeps some retailers from making progress is their Apple Store envy. Almost every retailer we’ve worked with cites the Apple Store as best-in-class, the benchmark for what they aspire to be. This is a head scratcher. While there’s no doubting that the Apple Store model gets many things right, it also has its shortcomings: There are no immersive digital experiences in the Apple Store. Customers interact directly with the products, which is good, but there’s no way to compare Apple computers to PCs. There is no way to digitally configure and personalize products, and no articulation of the Apple value proposition or how Apple makes your life better. This leads many retailers to conclude, “If Apple doesn’t feel immersive digitally in-store then why should we?”

So how does Apple get away with this? Because they’re Apple. Cupertino has several advantages over the average retailer: strong brand affinity, sexy product lines, knowledgeable, enthusiastic and digitally-enabled sales associates and strong customer support. The cold, hard truth is that the vast majority of retailers can never be like the Apple Store. But retailers can deploy immersive digital experiences to inspire customers, elevate their products and educate consumers. Wannabes need to forget the Apple Store and create their own digital retail identity.

To help get there, we’ve identified five factors for driving adoption and dealing with implementation constraints while creating what we call the “brand wow effect” within the retail environment.

1. Leverage the physical

For retailers, brick-and-mortar stores still have two big advantages: physical space and sales staff. Physical stores offer a huge home-field advantage and, even though consumers are more informed and digitally connected, they still seek out the in-store shopping experience. Why? Because there’s no better way to tangibly experience a product prior to purchase. There’s also social and entertainment value that consumers place on shopping experiences. So retailers should look to digitally enhance, not replace, the shopping experience.

For brands, differentiation is difficult when similar products are compared side by side. Immersive digital experiences are a great tool for educating consumers on the value proposition of products as well as cross-selling accessories. We have observed that digital experiences can lead to an 11 percent increase in the average basket and a 20 percent increase in accessory sales.

One of the best uses of immersive digital in-store is to serve the demand for personalization. Consumers want configurable, personalized products but they struggle with complex buying decisions. Interactive touchscreens and gestural experiences are excellent for providing customers with the ability to configure and personalize products to fit their needs. That’s something smartphones don’t do well. These experiences create a deeper affinity for a retailer or brand, leading to up to a 10 percent increase in customer satisfaction.

One of the biggest myths about immersive digital in-store is that it’s focused on self service. Actually, the opposite is the case in the retail world. Retailers in general are not looking to add staff, but almost every retailer is looking to make their sales associates more effective. Burberry has equipped associates in China with iPads to provide better access to online and offline inventories, while JCPenney has done the same to assist with complicated bridal jewelry purchases.

Whether it be arming sales associates with tablets or providing touchscreens for consumers to co-experience, the results have averaged a 4 percent increase in sales associate satisfaction and less turnover. According to Deloitte, retail leads all industries in adopting tablets. Their study predicts that 25 percent of all tablet computers will be bought by businesses this year and the number will continue to rise.[1]

2. Value the experience over the technology

It’s the customer experience — not the technology — that makes the difference. Customers shop in stores for reasons ranging from pure utility to entertainment. Customers shopping out of necessity don’t care about technology, they just want the experience to be easy. Customers shopping for entertainment are seeking pleasure and technology must enable that experience. A retail experience done right is an experience that takes advantage of ubiquitous computing; where technology fits into the human environment instead of humans being forced to use technology. Put another way, it’s when consumers know they’re engaging in an experience as opposed to experiencing a technology — a key to driving adoption. It’s surprising how many companies get this wrong.

A good history lesson in getting it wrong is the failure of the first-generation kiosk, one of the most cited reasons why retailers that have failed at digital in-store are reluctant to do it again. Most kiosks were simply an idea the online channel teams — not the retail teams — dreamt up to gain a Web site presence in stores. The draw of easy implementation and the repurposing of the online investment was irresistible. So they packed their stores with cheap kiosks made of pressboard and Formica that were outfitted with a browser-equipped PC, a low-res CRT monitor, mouse and keyboard. Then, they waited for the orders to flow in. They’re still waiting.

Why did they fail? Customers didn’t use them. Why didn’t customers use them? Because the experiences sucked. Lesson learned, successful implementations of technology do not determine success — customer adoption determines success. Many retailers never stopped to wonder why a customer would stand in front of a Web site in a store when they could surf the Internet from the comfort and privacy of their own home. They ignored the fact that the retail experience is unique and special. There are specific reasons why customers are there in the first place. The chief result was thousands of ugly kiosks sitting in the corner unplugged and collecting dust.

To be successful, retailers and brands must value the creation of an experience over the enabling of technologies. Even today, there is a wide disparity between retail technology spend and experience spend. Large retailers and brands budget tens of millions of dollars on hardware and technology to outfit their stores, but only spend tens of thousands of dollars on the experiences. Since adoption is the primary key to success, the imbalance between technology and experience budgets must shift. Customers don’t care what technology is under the covers. If an experience provides value, they’ll adopt it. According to eMarketer, “Retailers are looking to digital technology to help influence consumer decisions at the shelf level, while also aiming to streamline and ease the shopping process. Consumers are also receptive to digital technologies deployed in-store when they receive a tangible benefit.”[2]

3. Be as cool as (if not cooler than) a smartphone

These days, digital in-store has to be at least as cool as the device your customers are carrying in their purse or pocket. This might seem contrary to the statement above; valuing experience over technology. On the contrary, it’s not what the technology is or how it works; it’s what the technology does. The smartphone does a hell of a lot for a device that costs a few hundred bucks. It’s a portable communication device, data store and entertainment platform with tons of utility.

So why not just enable mobile apps in stores? Because customers did not go to the store to use their mobile phones. They’re there to shop and experience shopping. Digital needs to complement and enhance the retail shopping experience, and to do so effectively, it needs to be more immersive and more engaging than your customer’s mobile device.

Size does matter — attraction and engagement are more keys to adoption. Big, high-definition digital displays are hard to ignore but they must enable an experience that helps customers connect with a brand. For example, JCPenney’s in-store deployment of its Findmore smart fixture experience inspires customers to digitally shop by look — leveraging a 42” high-resolution touchscreen, rich content and an extended online and offline assortment. Immersive digital experiences have a 53 percent higher attraction rate over traditional digital signage. To be clear, we’re talking about inspiring customers in order to drive sales, not servicing customers like they’re at an ATM. (That said, it’s worth noting that digital is great for servicing customers as long as the experience is private and optimized for the relevant task at hand.)

For driving sales, it’s all about digital experiences that attract and engage customers. However, that’s not to say every retailer needs to panel the walls with HDTVs. First, focus on getting the experience right: Immersive digital experiences need to be discoverable and unfold through rich and pleasurable paths. Then, test and measure different form factors to see what produces the highest payback.

4. High tech is not always good tech

Another often-cited reason why brands and retailers don’t have immersive digital experiences in-store is due to IT infrastructure limitations. Every business wants an elegant, service-oriented IT infrastructure where all data is available in real-time but few have it. The digital ecosystem is changing too quickly to wait for IT to get their ducks in a row. To make progress quickly in the digital space, companies need to embrace some oldie-but-goodie, low-tech solutions and leverage cloud computing.

One of the most low-tech, yet innovative, approaches to system integration came from a large retail telecommunications brand that recently went through a major acquisition. The IT integration price tag of enabling every digital order to seamlessly flow through the system was $125 million. A quick cost-benefit analysis showed that it was much less expensive to hire staff to manually process digital orders that fall out of the system over a 10-year period. The process is nicknamed “swivel-chair,” referring to how an associate pulls an order exception off a printer then swivels their chair to manually enter the order into a couple of other systems. In today’s IT world, this old-school approach is cost effective, if not innovative.

Cloud computing also offers an IT shortcut in many situations. In the past year, Razorfish leveraged the cloud to successfully launch 5,000 Windows Phone 7 touchscreens into the global retail market in eight countries and nine languages. Working against severe retailer infrastructure constraints across the globe, the solution hosted analytics and content management in the cloud and the experience was deployed in a six-month period.

The moral of the story is that retailers shouldn’t be afraid to kick the IT integration can down the road. The low-tech solution is often the right one for businesses, and there are plenty that are tried and true, from batch processing to manual intervention. The only must-have system is a solid measurement framework where performance and success is measured — and hosted in the cloud, if necessary.

5. Pilot don’t prototype

The ideal approach to getting immersive digital experiences into retail stores is to align against a well-defined, overarching strategy or vision. Since the digital retail landscape is evolving quickly, any vision needs to be mapped out quickly — a matter of weeks, not months. However, the realities of the retail business and the need to get something done quickly often outweigh the luxury of developing an overarching strategy. We commonly we hear from our retail clients:

  • “We want to get innovative ideas to market quickly.”
  • “What we need is a clickable prototype to show our executives.”
  • “If the prototype is successful, we may get buy-in for a large-scale rollout.”

It’s true that most of our clients need to introduce innovative digital experiences into the market quickly, but it’s not true that they need a prototype. What they need is a pilot.

Following a prototype methodology is the most time-consuming and costly path for getting digital retail experiences to market. Prototypes are usually exercises in technology and since they never enter the market, there’s not a lot to learn and business effectiveness is not measured. Another disadvantage of prototypes is the risk of someone beating you to market. If you’re onto a good idea, chances are someone else is too — probably a competitor.

Our point of view is that prototypes are only useful for proving functionality that: 1) is absolutely critical to success and 2) carries a sufficient risk of failure. If neither of these are true, Razorfish strongly advocates piloting over prototyping.

If the goal is to get something to market quickly, then you should pilot. Don’t waste time and budget on a prototype. Pilots carry higher upfront costs because the experiences must be developed to the point where it starts and ends logically for a customer. And pilots have to be fully tested. However, only pilot experiences provide learnings from real customers interacting in retail environments. The costs of pilots can be limited by keeping the scope to core functionality and a statistically significant number of stores. For example, a 1,000-store retailer may be able to limit a pilot to only four or five stores for six weeks and still provide sufficient learnings in which broader conclusions can be drawn.

The Razorfish approach for getting immersive digital into retail is to do so quickly, with the goal of learning and generating buzz. Since it’s just a pilot, there’s no need to boil the ocean right out of the gate. Keep the experiences concise and aligned to key success metrics where performance is measured. Take a low-tech, low-cost approach to integration and kick the systems integration down the road. It’s usually much more cost effective for a sales associate to manually update a few pilot experiences via “sneakernet” for six weeks, than to integrate to retailer back-end systems.


 

Notes

  1. ˆ Jeffrey Grau, “How the iPad is Transforming Retail,” eMarketer, May 1, 2011.
  2. ˆ Tobi Elkin, “Shopper Marketing Insight: Embracing Digital Touchpoints,” eMarketer, January 7, 2011.