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Omnichannel Retail: How to create the digitally augmented store of the future

Seize Digital
Author: Miya Knights

A well-executed ‘omnichannel’ strategy offers a seamless customer proposition across sales and marketing channels. It also does so profitably, thanks to the integration and optimisation of end-to-end operations too.

In this fifth Eagle Eye blog serialising our CEO, Tim Mason’s new book, Omnichannel Retail: How to Build Winning Stores in a Digital World, we continue to explore the role of the physical sales channel in this mix.

With some 60% of all retail sales said to be 'digitally influenced,' we can see how important digital marketing is in this mix to driving integrated and optimised customer acquisition, both online and to the store.

Loyalty, as explored in Chapter 2, is a powerful tool for knowing and connecting with customers. But Chapter 3 demonstrated how data-driven analytics can provide the insight required to move beyond transactional offers.

It builds on the power of the physical store’s location as a proxy for relevance, which outdoes online in terms of its inherent ‘try-before-you-buy’ sensory and interactive capacity to tap emotional customer loyalty.

This is why Tim explores the store’s ‘location in the physical world’ in Chapter 4: so it is as easy to discover, locate and buy from as digital-first counterparts or competitors, supporting seamless shopping journeys.

Digitally augmenting store experiences

Considering 'near me' searches to buy have increased 500%, the concept of the ‘digitally augmented store’ introduced in Chapter 5, can illuminate any visit as a vital component in a successful omnichannel proposition.

The book underlines that we all live in a digital world. Yet, too often, that digital capability disappears in the store. Wi-Fi, for example, is often made available. But it is rarely used to improve the customer experience.

The digitally augmented store supports the 90% of consumers who already combine digital and physical channels during their shopping journeys. It should also support the 90% of all sales still completed there.*

   “When customers are actually in the store, it becomes necessary to transition them to a digitally enabled and augmented physical store experience designed to help them get the most out of the fact that they’ve paid a visit.” (Mason, T., Knights, M. Omnichannel Retail, p82, Kogan Page.)

The benefits of connecting digitally with customers and extending that connection into the store means retailers and brands can know who their best customers are to boost sales and frequency.

Building on their physical advantage, bricks-and-clicks retailers should learn from their online competitors and connect with customers during their visit via digital services that make shopping faster and more convenient.

This, in return, enables them to obtain data-driven insight into those customers’ experiences during their shopping journeys regardless of channel or touchpoint. These digital and mobile capabilities already exist.

Big Data, AI and the Internet of Things developments can help retailers manage their businesses by connecting places and products. But they risk knowing more about their stores than the people that shop in them.

Driving insight through frequency

Drawing on his Tesco Clubcard experience, Tim argues how important frequency is as a measure of loyalty, where that could be 50 times a year if you’re a grocer, for example, or even more with convenience stores.

This is why establishing digital customer connections that can be extended into and augmented by the store offer and experience is so important. It establishes who your best customers are and offers insight into why.

The new opportunity to compete with digital pureplays is to add other contextual data to your shopper data so that you understand more about consumers as people and develop an offer to meet their aggregate needs.

   "This is particularly important in lower-frequency categories such as fashion or restaurants where you are looking for a personalized hook, which could be based upon attributes such as location, time of year or day, life stage event and/or recent browsing or purchase history.” (Mason, T., Knights, M. Omnichannel Retail, 91, Kogan Page.)

By understanding the who, how, when and where of what you sell, you’re able to refine that offer so it drives the highest value customers both online and into store. There are myriad examples of ways to do this.

Loyalty schemes are great for boosting frequency, but all sorts of digital marketing, gamification and utility can encourage customers to identify themselves instore to get more out of making the effort to visit a sales outlet.

It could be a free beer on their birthday in a restaurant or bar, timely and tailored digital offers issued and redeemed at the till for traceability, scan and/or pay and go systems, or even wayfinding and navigation apps.

So, retailers must digitally augment their physical sales spaces to make sure they are fit to compete in today’s digital age and beyond. In the next chapter we look at how to do this by giving the store a ‘mobile makeover’.
Omnichannel Retail: How to Build Winning Stores in a Digital World by Tim Mason and Miya Knights, was published by Kogan Page on 3rd April 2019, and is priced £19.99.

Make sure you don’t miss the rest of this series. Subscribe here to receive the latest blog, previewing a chapter of Tim’s book each week, and be entered into a prize draw to win one of 12 signed copies!

*90% of global retail sales are still completed in stores; this includes reservations or purchases made online but fulfilled from a physical retail location. See the latest US Census Bureau data as an example here.