Cognitive Retail

The In-Store Retail Imperative: A Return to Relationships

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30 years ago the owner of the corner store knew each customer by name, what kind of gifts husbands wanted for their wives and what kinds of items families picked up each week. Over time things have changed. Retail shops merged into multi-category super markets and department stores and ownership consolidated into larger, and larger chains. Throughout this process, customer intimacy was soon replaced by operational efficiency. Sales people began lacking the insights about their customers, let alone the ability to create personalized experiences.

retail shopping vintageIn the following decades, a number of new innovative retail channels evolved such as catalogues, call centers, TV home shopping, and eventually e-commerce. All of these new channels made shopping more convenient in some ways. But the reality remained that retailers had done little to create one-to-one personalized relationships.

Despite the unparalleled advances in technology and the evolution of e-commerce, retail is returning to its in-store roots as shoppers around the globe turn to bricks & mortar outlets for that tangible interaction with the brand. A recent TimeTrade study found 85 percent of consumers still prefer to shop in bricks-and-mortar stores because they like to touch and feel what they buy.

There is also no doubt that in-store sales are heavily influenced by digital technologies. Studies have shown more than half of shoppers read online reviews before making a purchase, so this kind of online research is now part of many shopping journeys before visiting a store.

One of our findings from our client work and research is that the last great shopping experience drives a customer’s expectation for the next. Recent customer experience research from IBM recommends retailers constantly experiment with new innovations both online and in-store to remain relevant to ever-evolving consumer demands and expectations.

The 2017 Global Customer Experience Index by IBM Global Business Services (GBS) surveyed 507 brands across eight market segments in 24 countries, to discover which brands were best at satisfying customer experience expectations at strategic touch points along the shopping journey. The study focused on seven areas of the shopping experience: personalization, digital experience, omni-channel supply chain, physical and digital integration, social media, mobile experience and the in-store experience.

The results show there is a significant opportunity for retailers to improve their customer experience capabilities: on a scale of 0 to 100, the overall Customer Experience Index average was only 33.

The in-store experience was the lowest scoring category. Across a range of in-store services, including recognizing customers when they walk in the door and offering product comparison tools, the majority of brands provided either only limited capabilities or none at all. For example, 84 percent of brands offered no in-store mobile services, and 79 percent did not give associates the ability to access a customer’s account information via a mobile device.

The examples above are relatively easy to correct. The bigger opportunity to engage customers and create strong brand advocacy is to rethink the entire customer experience and the role the store plays in that journey.

For example, Lotte Group, is applying Watson cognitive technologies to develop an in-store ‘Intelligent Shopping Adviser,’ which will give customers a virtual personal assistant to help with product recommendations, in-store location guidance and support for online pickup services. This recreates a personalized customer experience like those that the shoppers enjoyed at the corner store 50+ years ago.

Consumers don’t see channels, they see brands. Retailers must provide a consistent experience across all touch points and leverage innovative technologies to actively interact and engage with shoppers to affirm, build and grow the brand relationship. Retailers cannot just forge ahead with a set “plan” but instead need to experiment with the best way to merge physical and digital worlds to create a seamless brand experience. Confronting this challenge should happen as soon as possible and not be seen as one-off project but viewed as an ongoing innovation and renewal effort.

Today, technology makes this possible in an economically viable way, but it remains to be seen which retailers will truly lead the way.

General Manager, Global Consumer Industries, IBM

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