B&E | The Digitization of Retail and it's Future

As more shoppers turn to their smartphones to do product research, retailers need an all-inclusive mobile marketing strategy to reach consumers at just the right time.

By Arun Kohli

Image Attribute: Suggymoto.com / Creative Commons BY-NC-ND 3.0

Today's retailers are still very much soiled between operational, brick-and-mortar, and digital and social mobile teams. Often, store level teams do not receive timely communication from corporate regarding important new pricing strategies and promotions, and social, digital and mobile efforts may not be consistent with what is happening in the field in real time. 

Digital technologies inspired new visions for the future of stimulating engagement with retail customers while helping customers move along their purchasing journey. Initially E-commerce left some retailers scratching their heads on what to do, with many questioning whether the Internet was just a fad. Although the growth of online retail e-commerce sales has been steady, it currently lies at just 8% of all retail sales in the US. To safeguard against the potential risk of the Internet being just a fad, some marketers chose to treat e-commerce as a separate sales opportunity rather than risk integrating e-commerce with brick and mortar. 

Digital entrepreneurs took another route, building elaborate online malls that catered to a customer's every need without customer ever needing to go to a physical location – hence the customer is saving more time and money. Gradually, adoption and acceptance of retail e-commerce took over. 

With Ecommerce retail sales still pegged at less than 10 per cent in many countries, there are great opportunities for integrating digital technologies in-store, particularly since they can support the consumer show rooming behaviour. So today, we are observing yet another technological shift in the retail experience. Mobile inspired customers are on the go make easy online transactions. This inspiration has led to forward-thinking devices like Square and eliminating clunky cash registers that take up retail space. 

These technology shifts have caused great disruption but have also led to innovation. The customer that is demanding the most from these technological shifts is the millennial customer. They are telling us what to expect from upcoming generations. As retailers, we need to prepare and think about both the short-term and long-term future of retail. 

Today we are living in an incredibly challenging and exciting time for retail. The changes that digital technologies have created are providing retailers with opportunities to know their customers, create deeper relationships, and lower the friction of the connection through a seamless omni-channel.

Priorities in Digital Marketing Drive Brick-and-MortarTransactions

We have come a long way from the late 1800s, when Sears, Roebuck and Co. offered its first catalogue. Omni-channel retailing, or multi-channel retailing, which uses a variety of methods to reach the consumer, is becoming a reality.

While many businesses take advantage of the various avenues of digital social networking promotions (think Facebook, Pinterest, Instagram), the challenge for today's marketing world is connecting the dots of one all-inclusive mobile marketing strategy.

Many marketing teams are stretched thin, and communication can be challenging between those who are monitoring retail sales and those who are promoting the sales. In those instances, it is important to take a step back and re-examine the marketing team's roles and priorities.

With recent research from Forrester showing that 84 per cent of consumers use their smartphones while in a store to go online — more than in any other location — retail and mall developer marketers alike have a massive opportunity to influence in-mall purchases through targeted mobile engagement.

Corporate marketing, merchandising and planning and allocation teams typically do not work on the weekends, even though weekends are the busiest time in the field. Corporate teams meet on Mondays to go over the numbers from the weekend, but analysis after the “big game” can be less effective than following the sales and inventory during the game. Though these meetings are valuable, they miss the real-time flexibility offered by digital technology, which can be harnessed to reach consumers at the exact moment of opportunity.

Integration is the Key 

From a retailer's perspective, how do you centralize your efforts? 

There must be a delicate balance between the marketing department, which develops marketing promotions based on a calendar including floor sets, printed in-store signs and other marketing collateral — a process that takes time and is carefully and thoughtfully planned at corporate headquarters — and digital departments, which are designed to react quickly to current trends or inventory. In order to operate effectively in the modern retail world, successful retail campaigns need both kinds of departments, so they have both regular planning and flexibility to act.

In examining marketing priorities, what it comes down to is this: integration. Considering all of the elements that contribute to transactions, a successful company will require the integration of the teams who manage merchandising, planning and allocation, digital marketing and store operations. Companies need to designate a team at corporate headquarters to monitor retail results in real time, so that if something happens over the weekend, the store can capitalize on a novel opportunity instead of missing it. Traditionally, planning and allocation teams would not be tied to marketing, so if there was excess inventory, nothing could be done at a local level. 

However, integration of these teams and close communication allow digital technology to notify customers of these events and bring consumers in at a local level. And close communication also means that the brick-and-mortar stores will be ready for consumers when they do come in. It's one thing to announce a “flash sale” but another thing altogether to be ready for one. The different silos of the retail teams have to be broken down, so to speak.

Shopping “On Demand” 

In the end, we are living in an “on demand” society, with consumers preferring the likes of Hulu and Netflix to traditional providers of commercial programming. And we prefer to have our promotions come our way “on demand,” just as we do our television shows. 

Promotions being sent to and accessed by the consumer need to be relevant, personalized and localized. Consumers do not want to receive a push message regarding shoes when they are out shopping for towels. 

In today's fast-paced retail environment, shoppers are mostly using their smartphones to do product research. They use their phones like they would a sales floor associate, to ask questions but not to actually complete a purchase. In order to increase brick-and-mortar sales, stores will need to offer more of an incentive to buyers to get them in the door, and utilizing the incredible flexibility that digital offers can certainly facilitate that process.

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Copyright© 2016, IESRJ. This is an excerpt from an open-access article which is published under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License.