Merging the physical and digital: Smartphones supporting NFC and the latest Bluetooth will allow the phones to ‘talk’ to other objects with integrated RFID tags. Customers can gain deeper information about the brand or product, even taking personalisation to the next level. Embedding RFID chips, or radio frequency tags into products and store support interaction from technology devices.Read More
A talk for WGSN 18th May 2011. www.asiafashionsummit.com
What we’re talking about is a walk-in website –
So, an example of a good customer journey – Think of the great experiences when visiting a premium hotel, your favourite fashion store or a great restaurant. Every touch-point is considered and enhances your senses and triggers emotions. Mobile commerce and social media now allows a deeper level of interaction and takes the experience in and out of the physical environment.
In the context of a typical consumer journey and shopping for a product, I recently purchased some new running shoes and it engaged me in; online research, asking friends, acknowledgement of the brand, the product, visiting a store, touching the product, trying them on, engaging with the staff …. the touch-points are considered and all on brand up until the point of purchase the consumer journey is very much disconnected by the sales till; it is an often awkward part of the journey.
Throughout the customer journey the PoS services are all the same – there is room for differentiation at this point.
How often have you got to the point of purchasing a product only to place it back on the shelf because the queue is too long? Sometimes shoppers are put off buy by the queue …
I predict we going to see the end of the store sales counter. [RIP}
Thinking of the history of retail, over the past hundred years or more, the transition from market traders and stall keepers surrounded by product and free to engage with customers with a money pouch; to today - bricks & mortar with a sales point. That is tethered by one of these … (show Ethernet cable)
‘Connected Retail’ © StartJG
How do we understand the consumer better –
The latest smartphone technology will allow the store format to be changed. So, that you can sell more and build a better and more personalised experience. This will aid and enhance the relationship between staff and shoppers.
With smartphones connected to social networks retailers can help to understand more about their individual customers by pulling in information from their social API’s (allowing software programs to communicate with each other) – of course, all at the consumers consent. Social media can be used to bring knowledge to staff through smartphones to support relationships.
Store experiences and staff relationships are key to connecting consumers with the brand and learning something new. Building brand equity for that consumer – telling friends of the great experience they’ve had through their social channels builds great advocacy and drives return visits.
Customers and their brands –
- Staff insight and expertise is incredibly valuable, they are a face to your brand and when staff interaction is performed well it builds strong relationships around stop, hold and close. People still want physical experiences and human interaction, let the store do this for you and use the smartphone and social commerce to help facilitate this.
The results of doing this, consumers are massively engaged with their brands and will allow us to demonstrate:
- Benefits to staff for understanding their customer
- Benefits to customers for having a better service and experience
How do we entice the customer –
- Brand and retail environments should be destinations, advertising is just wallpaper, people do not absorb advertising, they have become numb to it. Customers want real tangible experiences were they can be part of the gang or join the club. Associating themselves with brands they can share experiences with friends both physically and digitally.
- Enhancing the smartphone within a retail environment to create a more personalised experience where the staff and consumer remain close; bringing the point of sale to the decision.
- For example, thinking of how this will work in a fashion retail environment, this should start to affect the way a store is designed. Knowing that a shopper can pay with their phone, the nature of the fitting room can be repurposed. Why not make the purchase in the fitting room at a terminal within the privacy of the staff.
- Take that experience back one step further and the fitting room could be personalized with a selection of clothes for the customer determined on their purchase history, or the store accessing their social network and analyzing photos to sense personal styles or status updates to see where they are going on holiday next week. The smartphone can be used to share pictures of the products and get direct feedback from friends to strengthen the purchase.
- To conclude, within the context of the customer journey. The state of mind changes at the point of purchase. Don’t give the consumer the chance to walk away. Keeping momentum with the shopping experience and emotions around stop, hold and close.
Through this we’ve created a personalised experience, rethinking the store design to accommodate a new wave of technology (smartphones):
- Where, consumers demand deeper relationships to stay loyal.
- Create more opportunity to streamline the retail journey.
- Facilitated the conversation on and off line to create advocacy
- All giving the retailer a better chance of closing a sale.
How consumers with smartphones will impact the retail experience
Smartphones are rapidly becoming the ultimate connection between consumers and brands, and as a result retailers need to take a fresh approach to the design of their stores and the customer relationship.
There’s no doubt that the convergence and phenomenal growth of social media and mobile commerce will dramatically shift consumers’ expectations of the brands they shop with. ‘Connected’ consumers are increasingly using their smartphones to research, browse, shop, share information, and pay for products – from their morning cappuccino to a new TV – regardless of where they are, in-store, at home, at work, day or night. According to research by Google/Ipsos OTX[iv], 79 percent of smartphone consumers use their phones to assist with buying decisions. And it’s not just about research. Mobile payment transactions already total $240 billion annually, and are expected to grow to 3 times that in the next 5 years[v]. Smartphones outsold PCs for the first time in 2010, according to research by IDC, and by 2013 Juniper Research report that 1 in 5 smartphones worldwide will use Near Field communication (NFC) payment technology. By analyzing this ‘connected’ customer’s entire journey, pre and post visit as well as in-store, brands can create a seamless retail experience that better meets customers’ expectations – one that is facilitated and empowered by new social and mobile technology. The end result is a retail experience that actively enriches the relationship between brand and consumer, and helps retailers deepen their understanding of customers, build loyalty and ultimately drive sales.
A benchmark for connectivity
For many younger consumers, smartphones are now a benchmark for how they connect online with their community – whether it’s friends, colleagues, or their favourite brands. Their mobiles go with them everywhere, the majority checking their phones as soon as they wake up. The way they communicate with their peers via their phones is fun, open, intuitive and seamless, and this is what they will increasingly expect from the brands they shop with. Smartphones mean that social commerce is now very much part of the customer journey. Over 80 percent of online shoppers want to share information about their purchases, according to research by IBM in 2010. Put these shoppers in your store, armed with web-enabled smartphones and they become even more informed, influential and possibly more promiscuous. Google’s research indicates that 70 percent of smartphone consumers use their devices while in the store, reflecting increasingly varied purchase paths.
In addition, recent developments in social network gaming, played via mobile devices, offer huge opportunities for brands to add another layer of engagement to further attract consumers, potentially making shopping in-store even more sociable, fun and interactive. For example, mobile social gaming apps could be used, pre-store visit, to attract shoppers into the store. Combine gaming with GPS enabled phones and brands can challenge groups of passing customers to a game near a particular store, incentivizing players with an in-store promotion or voucher if they win, enticing them over the threshold. Add in the fact that the rise in NFC and web-enabled smartphones is fuelling the increase in mobile payment transactions, and the role of smartphones in the customer journey becomes clear. Starbucks customers – 3 million so far this year – are already buying their daily coffee with their phones in the US, using the Starbucks Card Mobile app.
The Rise of the Connected Consumer
Consumers, then, armed with smartphones are even more informed and powerful. They will expect the brands they shop with, and the in-store experience, to not just support their desire for connectivity, but for connectivity to be seamlessly integrated into their entire customer journey. These connected consumers no longer think in terms of separate channels, but demand a seamless brand experience, no matter where they are or what time of day or night.
This is particularly evident in emerging online markets such as China, where despite having the largest online population in the world, over half of its Internet users have been online for less than 2 years. The number of people using the internet has exploded in China over the past decade, growing from 23m internet users in 2000 to just under 485 million in 2011[vi]. And unlike development of western markets, in China, growth is happening across multiple touchpoints simultaneously. Chinese internet users already expect to access content or applications on their mobile, tablet, PC or TV and huge growth is being seen across all digital activities, from browsing to gaming, social networking to e-commerce.
Internet word of mouth (IWOM) – online chatter around brands and products – is especially powerful in China, according to research from Roland Berger[vii]. The majority of Chinese internet users (58 percent), find that online sources such as review sites, discussion blogs and other social media sites influence their purchasing decisions, compared to just 19 percent of consumers in the USA. It will be interesting to see how the rise of m-Commerce will outpace this statistic with more and more people turning to their Smartphones to enhance the shopping experience.
The main implication of all this for retailers is that firstly, for these connected consumers, the path to purchase is no longer a single linear journey – but multistage, multichannel, multiplatform. For example, Roland Berger’s research shows that Chinese consumers use Internet word-of-mouth at different stages throughout the purchase process, from early stage brand awareness, product research and purchase decision to post-purchase broadcast. Over half of Chinese consumers first learn about a brand through IWOM, before consulting any ABL/BTL activity, whilst 58 percent decide to purchase based on what people are saying about their intended purchase online. A high proportion – 48 percent – also want to share their experience of the brand after they have made the purchase. This tendency will only increase, and get more sophisticated and integrated into the customer journey, as internet usage gets more mobile with the ever increasing penetration of smartphones. Retailers need to understand this journey – from pre-store research to post-shopping relationship and how it is facilitated by smartphones now, and what the opportunities are for the future.
Secondly, the use of web-enabled smartphones as a shopping tool gives consumers greater control over their purchases and the relationship they have with the brand. It brings the consumer closer to a brand than ever before, and brands need to respond by being honest, open and transparent, and give consumers the freedom and opportunity to express themselves and their views. Chinese consumers increasingly appreciate quality over price when it comes to brands, not just of the product, but also the service around the product as well. Smartphones provide brands with a golden opportunity to build their service proposition, by making it more streamlined, responsive and personal.
The technology around social and mobile commerce, and the way consumers are already using it, offers brands huge opportunities to get to know their customers better, and offer them a more streamlined, personal retail experience that in turn builds loyalty. Smartphone technology can help customers interact more deeply with the store environment, whilst social media campaigns allow brands to recognise customers’ likes and dislikes, as well help build detailed profiles of their customers. Smartphones, equipped with NFC and geo-fencing technology provide brands with the opportunity to act on these insights, when it matters, offering consumers a more personalized experience in-store.
For example, geo-fencing lets retailers tailor the shopping experience by directing relevant offers to customers’ phones as they enter the store, so they actually get them during their shopping trip, when it’s most needed. This response can differ depending on the profile of the customer – a bored male shopper looking for practical advice in a fashion store will present the retailer with specific promotional opportunities for cross selling, for instance. Get these targeted promotions right, and that customer will feel cared for, and is more likely to return to the store.
Mobile payment technology means retailers can streamline the payment process, bringing purchase to product, making it more efficient and easy for customers. Customers and staff are no longer tied to the traditional sales desk for the transaction – it can happen anywhere on the shop floor, in the changing rooms of a fashion store, or by a promotion in a bookstore. Retailers can use the smartphone to close the sale at the ‘point-of-decision’ wherever that is in the store. We are not far off a scenario where consumers can roam a store and get product related information just by touching an NFC enabled display with their smartphones. They could then simply add the product to their ‘virtual’ shopping basket, and even pay for it there and then, all using their smartphone.
Think of the issues around payment for retailers and their customers, off-putting queues leading to lost sales, the different emotions – excitement or frustration – that can build up in the approach to the sales desk. An easier, more flexible payment process, empowered by smartphone technology, could help to alleviate these pressure points. Apple’s service model is a great example of a brand using technology to enhance the in-store customer experience. In its new Covent Garden, London store, staff roam the floor, equipped with hand-held terminals, offering expert advice and the ability to take payment there and then, emailing a receipt to the customer. This allows a much closer, one-to-one relationship to develop between staff and customer, encouraging return visits to the store, and building advocacy.
‘Hero and Reward’ customers
The value of creating online communities for brands via social networking platforms is well documented, and there are some great examples of social commerce, such as Levis in the UK[SJG1] who have integrated their online store with Facebook to create a shared shopping experience. But retailers need to do more to integrate the social commerce channel into their physical stores. The store needs to support consumers who are actively broadcasting, commenting and sharing information about their purchases, instantly on their phones. It can provide areas within the store environment to make heroes out of customers, encouraging them to broadcast their purchases, show off or perform, and reward them for their efforts, building their confidence in the brand.
Brands can surprise their customers with spontaneous, relevant rewards whilst in store, targeted at what they have expressed they like. If the store knows they are there via their GPS enabled smartphones, it can send a promotion to their phone or social networking page (so their friends can see too). Imagine a girl enters one of her favourite fashion stores, looking for a certain item of clothing or footwear that’s on trend. If there are other customers in the store that have also expressed a desire to buy the same item via their social networking page/API, then the store can recognise this fact and respond by running a promotional showreel in-store, aimed at these customers, to surprise and reward them. The store could also challenge this set of customers to a game, which they could play either on their phones whilst browsing, or via an interactive store kiosk linked to the retailer’s social networking site. Again, the winners are rewarded, celebrated both in the store or online, making both staff and customers feel good. Such activities inject emotion into the customer-brand relationship, provide content for sharing and give customers good reason to return to the store, building loyalty and encouraging purchase.
Loyalty as the ultimate goal
The ultimate goal for brands today is customer loyalty. Loyal customers advocate your brand, talk about you, spread the word about what they like (or dislike), visit your store (again and again) and buy stuff from you rather than the competition. We’ve seen that smartphones and social commerce activity provide a fantastic opportunity for brands to nurture this loyalty by helping to build a more meaningful relationship with the consumer. It’s clear that smartphones are becoming an indispensible shopping tool for consumers, and therefore should be a crucial part of the marketing mix for brands. They are uniquely placed – not least because they are usually no more than an arm’s length away from your customer’s eye or ear – to aid the customer journey and facilitate a closer, more personal, one-to-one relationship between brand and customer. But to really take advantage of this opportunity it’s crucial that brands take steps to understand how this new connected shopper is using the smartphone throughout their entire shopping experience. Real insights here will mean that retailers will be able to not only respond to customers’ expectations, but also inspire them to connect and interact with the brand, providing information about their lives and preferences along the way. Smartphone technology allows brands to get to know their customers better, build deeper relationships, and streamline the customer experience, in-store and beyond, making it more personal and efficient, and ultimately, encouraging purchase. But it will only work if brands integrate connectivity into the very foundations of the shopping experience – this is the least that today’s connected consumers will expect.
[pdf article download here]
- The convergence and phenomenal growth of social media and mobile commerce will dramatically shift consumers’ expectations of the brands they shop with and the in-store experience
- For many consumers, smartphones are now a benchmark for connectivity, and are becoming an indispensible shopping tool, used throughout the research and decision making process. 79 percent of smartphone consumers use their phones to help with shopping, according to Google research, and 70 percent use their smartphones while in a store[i].
- These ‘connected consumers’ are more informed, influential and potentially more promiscuous than ever, and expect brands to support their desire for connectivity throughout the customer journey.
- Retailers need to understand this ‘connected consumer’ and how their path to purchase has moved away from being a single, linear journey to one that’s multistage, multiplatform, and multichannel. Brands can then create a seamless retail experience that better meets customers’ expectations.
- The latest smartphone technology, along with developments in social commerce platforms, offer brands a huge opportunity to deepen the relationship with their customers, and as a result offer a more streamlined, personal retail experience that in turn builds loyalty.
- Smartphone technology can help customers interact more deeply with the store environment, whilst social commerce activity allows brands to get to know their customers’ preferences. NFC and geo-fencing technology means retailers can act on what they know, and target customers with personalized offers, when it matters, as they walk into their store.
- Retailers need to integrate social commerce into their physical stores, for example, they can ‘hero and reward’ customers by providing dedicated areas in-store that encourage them to share and broadcast, and reward them for doing so. Mobile Social Gaming will provide a new layer of opportunity for retailers to entertain, engage and reward customers whilst in-store
- According to Broadcom, 10 to 15 percent of all phones will have Near Field Communication (NFC) payment technology by 2012[ii], and that rises to 20 percent for smartphones.[iii] NFC enabled smartphones will allow retailers to streamline the payment process and bring purchase to product, making it easier for customers to buy, alleviating the practical and emotional pressure points – such as off-putting queues – around the traditional sales desk.
- The clever use of smartphone technology throughout the customer journey – by customers and retailers – will nurture a closer, one-to-one relationship between brand and consumer. This in turn can build advocacy around the brand, encourage return visits to the store and ultimately lead to an increase in sales.
[ii] Broadcom referenced in following
[vii] Brands and Buzz: Understanding How to Reach Todays Chinese Consumers, Roland Berger, 2010Read More