How Brands are Transforming in-Store Shopping Experience with Data

The COVID 19 crisis has tested the limits of every industry across the globe, but one industry that has suffered the heaviest blows is undoubtedly retail. With concerns over health and safety becoming purchase drivers overnight, retailers were forced to go back to their drawing boards to unlearn and relearn new mantras of customer engagement. As McKinsey reports, a large number of consumers – an astonishing 75% in the US alone “ have experimented with a new shopping method due to economic pressures, store closures, and shifting priorities.

While some merchants benefited from rapidly changing consumer behavior patterns, others have struggled to keep up with the emerging trends. However, as resilience has always been the hallmark of the retail industry, several retailers managed to come up with new product offerings and newer ways of working, along with some remarkable displays of innovation in record time. IBM estimates that 62% of retailers leverage data to gain insights into customer sentiment and purchasing patterns to stay ahead of the curve.

Retail expert Doug Stephens predicts that physical stores will no longer be limited to functioning as transaction hubs but will evolve as customer engagement centers for delivering immersive product experiences. This demands redesigning in-store layouts, optimizing inventory based on purchase trends, running in-store promotional campaigns, and personalizing customer engagement at scale.

Leading US luxury brand Nordstrom uses data intelligently to understand their customers and deliver innovative personalized experiences. The brand’s hallmark loyalty program not only uses data to match customers with products but also leverages geofencing to identify loyal customers when they are in Nordstrom stores and deliver hyper-personalized experiences. All this is possible with data that serves as the backbone of the in-store shopping experience.

Let us have a look at how data empowers retailers as they welcome back customers to physical stores.

Keep Demand and Availability in Check

• Utilize data to understand demands – Data can help retailers gain a deep understanding of customers’ likes and dislikes and make changes to their stores accordingly. Historical data about shopping trends and purchase behavior do not hold good anymore as demand is heavily affected by the pandemic-induced safety regulations. Retailers can leverage data to monitor how their customers are spending, which products they are spending on, and the size of their baskets. Data also allows retailers to track SKU-level sales figures by demographics, channel, and market and help them remodel their stores based on a new set of data-driven insights.

• Ensure consistency in product availability “ Delivering a memorable shopping experience rests heavily on product availability. Having products that customers are looking for stacked on shelves is vital for retail business success. Retailers can benefit significantly by tracking product availability and ensuring consistency through effective product data management. With a clear picture of the root cause of out-of-stocks, retailers can devise successful strategies to ensure consistency in product availability, drive customer loyalty, and increase average order value.

• Infuse personalization with the right offers and discounts – Personalization is critical, says McKinsey, as it can increase store revenues by 20-30%. Brands like Nike use proprietary data to deliver well-executed hyper-personalized in-store shopping experiences. For example, the New York City Nike flagship store offers a captivating omnichannel shopping experience to the brand’s loyalty program members. Exclusive access to a personalized assortment of favorite products, offering QR-code scanners to check product availability, storing items in pickup lockers, and instant no-touch checkouts are just a few of the things the brand is enabling. Nike has taken personalization to a whole new level, with customer safety as the topmost priority. This not only makes them stand out in the crowd but also drives the top line significantly.

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Unify Experience and Diversify Delivery

• Bridge online and offline experience “ According to Deloitte, one of the key priorities of retailers today is to accept that convenience has a new meaning. It is no longer restricted to free shipping or same-day delivery. Instead, retailers must use data to deliver convenience at every step of the customer journey across online and offline channels. Merging online and offline data allows retailers to leverage a 360-degree customer view for providing add-on services that stretch beyond the product purchase and enhance the overall shopping experience.

• Allow customers to check product ratings and reviews “ Product reviews influence purchase decisions as they provide real-life validation for the quality and performance of the products. Every one-star raise that a business receives on Yelp results in a 5-9% increase in revenue, notes Harvard Business Review in their recent study. Brick and mortar retailers can use product rating and review data to showcase and promote products with higher ratings and attract footfall. As customers are likely to spend more and trust brands with higher product ratings, retailers can use this data to create value for their customers and themselves.

• Diversify delivery mechanisms “ Safe delivery methods like curbside pickups and delivery aggregators are becoming increasingly popular, with about 22% of US consumers using them more than they did before the pandemic. Leading US bakery brand Panera Bread was quick to catch on the trend by launching a grocery-delivery service that allows customers to add groceries to their original order entrées from the brand.

Inspire Customer Loyalty with Innovative Insights

• Innovate and fill gaps “ Evaluating omnichannel offerings and associated data help retailers discover opportunities of delivering innovative customer experiences in sync with the changing customer demands and emerging shopping preferences. A close study of data-driven insights into customer pain points can lead to the development of alternative customer engagement tactics. The pandemic has also pushed retailers to use next-gen technologies like augmented reality (AR), artificial intelligence (AI), and machine learning (ML) for offering virtual try-on facilities. These technologies allow retailers to re-create in-store experiences while avoiding physical interactions effortlessly. On the other hand, to drive traffic to stores, large mall operators are trying out innovative ways of offering zero-contact facilities. For example, US mall operator, Brookfield Properties, is planning to install 3D body scanners that can direct customers to apparel brands offering sizes that fit them perfectly.

• Retain customers with data insights “ Retaining customers has always been an uphill task for retailers, and with the pandemic changing the rules of the game, customer retention strategies can make or mar a business. Acquiring and analyzing customer, product, partner, vendor, staff, and other key data types can help retailers create stores that customers want to revisit once the crisis ebbs. Investing in master data management can help retailers draft effective customer retention strategies based on valuable data insights into customer preferences and shopping habits. Armed with data, retailers are rebuilding stores that customers long to return. As the former head of Apple retail Ron Johnson says, retailers must realize that a store has got to be much more than a place to acquire merchandise. It’s got to help people enrich their lives.

• Send personalized offers to make them buy again “ With access to customer data, retailers can drive brand loyalty and increase store footfall. When leading sports goods retailer Mizuno USA wanted to drive in-store traffic to its dealer outlets, it used mobile app data to spot a customer nearing a dealer’s store. Mizuno then followed up with push notifications to help users locate dealer outlets within a specified radius using Google Maps. Users nearing competitors’ stores were also steered away and brought back to Mizuno outlets with more attractive offers.

Although McKinsey says that the road ahead is bumpy for retailers as a majority of them struggle with data management and analytics, all is not lost. The future looks promising, with the pandemic pushing retailers to experiment like never before. Some are allowing customers to virtually try on anything – from apparel and footwear to jewelry and cosmetics or even a new haircut. Others are riding high on the buy-online-pick-up-in-store (BOPIS) wave that has not only pumped up sales but is also contributing heavily to the greenhouse cause. As these trends lead to more sales and lesser returns, analysts believe that they are here to stay even after the crisis is behind us.