As retailers explore adding life to their brands through mobile experiences, will stores become overly tech-ridden and lose their human touch?
Nearly two-thirds (71%) of shoppers now access their phone while in stores to read product reviews, compare prices, navigate aisles, check out, pay or look for gift inspiration ahead of the holidays. That number is up 15% from 2017, and increasingly, retailers are answering consumers' rapidly changing expectations through the mini computers in nearly everyone's pocket.
Over the past few years, retailers have used mobile to add life to their brand while reimagining their store spaces to match customer desires for "brick-and-mobile" experiences, Shannon Andrick, VP of marketing advancement at Alliance Data's card services business, told Mobile Marketer in an interview.
"As the retail landscape evolves and customers expect more than ever, brands are looking for ways to stand out in a more connected, on-demand, personalized world — all while making their store experience work as hard for them as possible," Andrick said.
However, store experiences that are overly tech-ridden and often eliminate the need for human interaction could lose their luster once the novelty wears off, according to Deb Gabor, CEO of brand strategy consultancy Sol Marketing. The trick for retailers will be in finding the right balance of value-added mobile experiences and personal service.
'Brick-and-mobile' revolution
Even major global brands are getting into the "brick-and-mobile" game. Nike cut the ribbon on two tech-infused locations this year, where shoppers tap their phone to trigger a variety of in-store experiences. The new flagship on Fifth Avenue in New York, Nike House of Innovation 000, lets guests use their smartphone to reserve shoe sizes. While shoppers finish browsing, their selected styles are placed in a designated locker that they unlock — you guessed it — with their phone. Items can then be scanned to check out and are instantly paid for through the details on customers' Nike Plus account, removing the traditional step of finding a cashier and waiting in line.
Part of what makes Nike a retail success story is its openness in embracing new technologies like AR, social media and mobile-powered store experiences to drive loyalty. In July, Nike opened a concept shop in Los Angeles that relies on mobile tech and customer data for customized shopping experiences for loyalty members. At the Nike by Melrose location, shoppers can use their phone to reserve products for pickup at smart lockers, scan barcodes to earn rewards or view product details, text store associates to schedule returns and redeem special "unlocks" at a digital vending machine of exclusive products.
For Nike, mobile technology delivers advantages by blending the best of both worlds: streamlined service and extra product information at the tap of a screen, along with certain benefits that online simply can't, such as touching and trying on items or the instant gratification of bringing purchases home right away.
"We're moving rapidly toward a technologically enabled world, and retailers are looking for ways to compete with Amazon and other online entities," Gabor said. "We need to consider the advantages of physical stores and online. And then most importantly, how can we blend the two?"
Stores double down on mobile
While many brands use technology like beacons to deliver well-timed coupons or fun features like AR filters to delight shoppers, some retailers are taking the "brick-and-mobile" concept to the next level with stores that are entirely powered by mobile devices.
Dirty Lemon, a DTC beverage brand that's earned recognition through Instagram ads and influencers, opened a cashierless — and staffless — store in New York in September. Akin to Amazon Go, customers can take the items they want and leave without needing to visit a cashier or pull out their wallet. People who visit the "walk-in vending machine," as the company describes it, scan a QR code to auto-generate a text message with a special order code and link a credit card to their phone. They then grab their desired health-conscious drinks (some are infused with trendy ingredients like charcoal or collagen), text the company what they took and exit. RFID tech is installed in the refrigerators to track inventory sold, and a heat map tracker monitors customer flow in the stores.
The high-tech store was built with mobile in mind, stemming from Dirty Lemon's track record of 95% of sales occurring on smartphones and highlighting how today's consumers are growing increasingly accustomed to buying items on the go.
Technology for the sake of it
While the right blend of technology can supercharge customer experiences in stores for a number of product categories, drive sales and aid store associates, deploying flashy tech to prove that a company is innovative does little to support the bottom line, and can even detract from in-store experiences and ding loyalty.
Walmart, for example, abandoned its Scan & Go mobile checkout — just months after announcing the offering's expansion — due to low customer adoption. Shortly after, the chain introduced a mobile point-of-sale system to let employees ring up customers' items anywhere in stores. The rapid change-ups highlight how retailers have yet to nail down the perfect combination of in-store technology that both eases shoppers' lives and supports the company's bottom line in the long term.
"I don't think that in every retail category a completely tech-powered store is going to deliver on the promise of the brands behind them," Gabor said. "There is a danger from a branding perspective because when you move toward that model, you lose the intimacy and authenticity of the human experience that's so part and parcel to the benefits that physical stores can offer."
"I don't think that in every retail category a completely tech-powered store is going to deliver on the promise of the brands behind them."
Deb Gabor
Sol Marketing, CEO
Integrating in-store mobile experiences often comes with a steep price tag and continued investments, but according to Alliance Data's Andrick, it's not an all-or-nothing proposition. Brands can consider smaller-scale entry with mobile checkout, informational kiosks or beacon technology to serve up targeted push notifications when shoppers enter stores. A key challenge before diving in to large-scale tech solutions is understanding what works best for a brand and its customers, by considering where to begin and which technology cocktail will best enhance the customer experience and deliver ROI.
While there is the natural inclination to immediately take a leap in order to keep up with competitors and appear innovative and relevant among consumers, hasty investments could be detrimental to a brand — especially when it comes to nascent mobile features that have yet to prove themselves as anything more than flashy novelties.
"In the end, I think it'll be more of these blended-technology experiences that involve what tech does best: automating things, making things faster, offering convenience and some self-service options and ultimately blending that with the best of what physical stores can offer," Gabor said. "Otherwise, brands could risk delivering impersonal experiences that feel more like shopping in a giant vending machine."
by Natalie Koltun