Omnichannel Out, Agile In: Retail Big Bets For 2016
February 11, 2016
Submitted by RetailMeNot, Inc.
By: Michael Jones, RetailMeNot The tinsel has been taken down and the trees have been put away. Retailers made it through another holiday season—some more successful than others—and most are looking forward to the challenges and successes that 2016 will bring. Looking back on 2015, deemed “The Year of Mobile,” it’s clear that digital marketers began to understand how new technology would impact the shopper’s journey, both online and in-store. So, what’s the challenge for 2016? Better execution of mobile and cross-channel strategies. At least that’s my challenge to retailers. As retail executives aim for a strong first quarter, many are upping their game to meet consumer expectations and create an experience that flows consistently from their online entities to their store floors. Many of the industry’s largest players have begun to focus on their overall footprint, reducing underperforming locations and instead shifting their priority towards building an experience that engages shoppers both online and in stores. Still, the physical retail store is alive and well, especially for retailers who have a strong knowledge of the available technologies and understand how and why those technologies can help. Let’s take a look at a few of the tactics retailers effectively used in 2015, and what they mean for the year ahead. Which Retailers Won 2015 and How They Did It Retailers are seeking a balance between their ecommerce operations and their brick-and-mortar locations. When brand experiences flow seamlessly between channels, the in-store experience can be as engaging and convenient as the online experience—if not more so. During the 2015 holiday season, Target unveiled the Target Wonderland in New York City. The 16,000-square-foot shopping exhibit allowed families to play and interact with the brand’s larger holiday campaign elements. And, perhaps most importantly, the experience showcased Target’s commitment to redefining the future of the retail, especially for customers making the trek to their stores. The biggest trend at play for Target is the brand’s interest in leveraging physical locations to create new experiences. Target Wonderland bridged the best of digital and in-store shopping, giving guests the ability to interact with products in new ways, then added those items to a wish list using radio frequency identification (RFID) technology to scan the items. At the end of their journey, shoppers were able to purchase the items added to their list and wait briefly for them to arrive at checkout, rather than using a cart. RFID technology is not a new fad—some retailers use it to keep track of merchandise—but Target’s use of the RFID technology in this experience was an innovative way to test the technology as a tool to enhance the customer experience. The fun didn’t end there though. Guests were able to Skype with Santa, interact with online-only items and take selfies with the Target dog, Bullseye. While it may not be reasonable to expect Target to replicate this shopping wonderland in all of its store locations, the pop-up shop served as a testing ground for the brand. Using the RFID technology, the brand was able to gain insights on its customer, including how they move about a physical location and what level of personalization shoppers responded to in a brick-and-mortar setting. Target wasn’t the only brand implementing new in-store strategies and testing the waters last year. We also saw an influx of retailers, like Kohl’s and Macy’s, utilizing buy online, pick-up in store (BOPIS) programs, whereby customers could order an item from their computer or phone and pick it up within hours at the store counter. Additionally, Macy’s purchased beauty and spa chain Bluemercury last year, a move that helped expand their in-store customer base. Other brands created excitement for holiday shoppers with tactics like the interactive window displays and fully connected fitting rooms (complete with phone chargers—genius!) at Bloomingdale’s, app features for smartphones and smart watches, and location-based tools like beacons and geofencing. Putting The Customer In The Driver’s Seat In 2016 This year is not just about having a proper omnichannel strategy in place. In fact, we may even see the term “omnichannel” start to dissolve. My bet for the next big buzzword in retail? Agility. Agility will be necessary as retail marketers try to further navigate between online channels and physical stores. Digital is not just a channel (though online sales will continue to be important); it’s also a tool that can be used to enhance the marketing of stores and lead to higher conversion rates. Here are three ways that technology can positively impact the store experience in 2016: 1. Maximize fulfillment efforts: Brick-and-mortar locations became the hub for retailers’ fulfillment efforts this season, with BOPIS efforts playing a role in bringing more online shoppers in stores. Retailers that successfully activate a BOPIS program may be able to prolong the shopping journey of these customers by enticing them to purchase additional items they forgot while shopping online—for example a pair of socks to go with those new tennis shoes. By delivering online orders straight to a user’s front porch, the sales loop is essentially closed. For retailers competing with online giants like Amazon, physical commerce may give them an advantage over the competition. Especially if they choose to integrate their online and offline businesses and strategize to have their physical stores play a leading role in online fulfillment. 2. Increase measurement efforts: Tracking consumers’ cross-channel journey is a challenge many retailers face. Digital marketers have several options to help them obtain a more holistic view of their customer, including working with attribution experts. Furthermore, retailers can use mobile technology to gain more insights about shoppers with methods like single-use promotion codes and mobile vanity codes. Mobile vanity codes may be the key to tracking a consumer’s purchase from browse to buy—no matter where the customer chooses to convert. And as we’ve learned from BOPIS, that conversion may be across multiple channels during the buying process. 3. Continue to borrow mobile moments: Mobile played a significant role in last year’s holiday story, accounting for more than half of online activity. There’s no doubt that shoppers feel comfortable searching for products and stores on their smart devices. In fact, Target learned that three-fourths of its guests start their shopping on a mobile device. As retailers learn more about customers’ online and on-the-go preferences, they can better tailor the experience. While the Amazons, Targets and Walmarts of the world have audiences large enough to perhaps make app investment worthwhile, other retailers can find ways to tap into these same mobile moments through partnerships with consumer shopping destinations. The most important thing to remember when it comes to mobile and your stores? Be present. Be where your customers are. Mobile is the best way to be both online and in-store—often at the same time. Your customers are now digital at their core. They keep their devices within reach at all times during the shopping journey—from when they begin researching on their couch at home to when they are walking down your aisles. In 2016, I’d like to challenge brick-and-mortar retailers to take more risks in order to build a stronger in-store connection with your shoppers. Test new avenues for engagement with your inventory and products; use data to make smarter sales-floor decisions; and most importantly, create a seamless experience from your .com to your doors.