Powering the store of the future.
Emerging landscape of Indian retail has opened new avenues of growth and at the same time it has created certain operational and consumer level challenges. While Indian retailers strive for profitable and sustainable growth, they are still trying to adapt to these challenges. With the advent of multiple shopping channels like online, mobile, etc., we believe that there is a clear need for retailers to become more agile and innovative in the way they operate. We have observed that Indian modern retailers are at varied levels of maturity in their capabilities across the retail value chain and are primarily operating with a transaction-oriented mindset. However as value creation becomes primordial, retailers need to change their mindset from ‘transaction-based’ to ‘value-creation’.
Differentiated customer experience is a key element for providing value to consumers and subsequently to retailers themselves. Retailers can provide superior customer experience by building a fresh perspective towards in-store product identification, customized services to customers based on insights and streamlined check-out processes. We see this transformation as a complex change both at business and organization levels; therefore it requires a gradual and incremental approach to enhance the store effectiveness. Smart retailers succeed by thinking innovatively about staying relevant to the consumers’ needs and profitably meeting those needs.
Differentiated customer experience is a key success factor for retailers. Today consumers are spread across channels – online, mobile, social networks – and it is increasingly getting difficult to manage them. It is, therefore, even more important to ensure that customer experiences provided across these channels are consistent and well integrated.
Physical retail store being the prime consumer touch-point takes a pivotal role in creating the overall good customer experience. If stores becomes a place where consumers only transact then it’s not going to create any value for anyone. Consumers can very well satisfy most of their product needs through website. However, if stores can create an environment where consumers are helped through their purchase cycle to easily find the right product, which makes consumers feel good leading to higher customer loyalty. Retailers should be able to anticipate their consumer needs and address those needs well before they realize it.
Retailers are launching innovative campaigns online which urge the customers to participate actively in return for rewards and loyalty points and coupons which could be redeemed in-stores. In May 2011 Diesel promoted a series of events to celebrate the inauguration of a fictional island called Diesel. Customers could enter any store (or “embassy”) to obtain a “passport” and win stamps, which could be redeemed for concerts, parties, holidays, workshops and merchandise. The campaign successfully integrated social media platforms like Facebook into its events, which in turn helped increase footfall into stores.
Furthermore, C&A, a Brazilian fashion retail chain introduced the concept of Facebook “Likes” in its stores at Brazil. By displaying the Facebook “Likes” on small screens embedded in the SKU’s hangers, the retailer has made an attempt to increase the sales conversion ratio. The hope was that approval from the online community would encourage shoppers to purchase a particular item of clothing.
Finally, retailers are also using digital concepts in-store to attract customer traffic and improve their conversion rates. Tesco introduced in-store digital concepts at its F&F clothing line with two main objectives; to increase customers footfalls in-stores, and to offer them the opportunity to see and engage with the extended product range available online thus leading to multi-channel integration and increased sales. Tesco implemented five integrated and linked digital concepts namely (i) Order point – transactional touchscreen kiosk to enable customers to browse and buy from the extended range online, (ii) Kid’s Magical Mirror – life-sized screen that allows kids to try on different outfits and interact with animations virtually, (iii) Inspire Me Screen—large touchscreen display that enables shoppers to browse key trends and build their own personal wish list, (iv) Digital Signage— video screen that showcases best of the product range and the F&F multichannel offering, and (v) Digital Mannequin—shows video of models wearing the latest fashions to attract shoppers’ attention.
