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Digitalization of Retail

  |  May 4, 2010   |  Comments

A look at how technologies are reinventing the retail experience. In part 1 of 2, we'll look at the considered purchase.

The way we shop is changing. It has been for a long time. It's an evolution started by the Internet and a little thing called electronic commerce. And now, as technologies like digital signage, mobile, and touch- and gesture-based interfaces bring new experiences to life, e-commerce has grown up. It's more than electronic commerce; it's everywhere commerce.

Technology is radically reinventing where, when, and how people shop. But retailers, for the most part, are behind the curve. Consumer demand outpaces the sector's ability to deliver. People have been conducting price comparison via mobile phones, for example, for years - even though it has been a god-awful experience. Shoppers expect a seamless transition from digital to analog shopping, and back again - yet some major retailers have just recently (and finally) begun to roll out integrated inventory systems that allow in-store availability searching via the Web (which is only one piece of the puzzle).

Shopping's digital evolution is happening in many different ways across many different product categories. I'm going to dedicate two columns to this topic. Next time, we'll look at how digital impacts CPG/grocery/convenience store shopping behavior. But today, let's run through a scenario focused on considered purchase.

So, let's say you're in the market for something - an expensive piece of consumer electronics equipment, or a (potentially) somewhat lower-priced fashion item like a new dress for a special occasion.

You might start your journey with your favorite search engine and/or some sites you've been to for similar items in the past. Maybe you've already got a favorite gadget or style blog. You'll find a few items that catch your attention. If it's electronics, you might discover the key features you're after - and learn the dimensions on which manufacturers are differentiating themselves (storage size, processor speed, etc.). If it's fashion, maybe you'll find a few different styles that jump out at you. You're probably also beginning to narrow in on retailers at this point - browsing at first, but beginning to develop opinions and short lists.

A few days later, perhaps walking from your office to the train station, you happen past a storefront window that's got an interactive touch screen projection on it. You stop to play with it for a few minutes, browsing products on a giant screen and using your fingers and simple, intuitive gestures to navigate. The experience is inspiring - seeing items on the Web is one thing, but being able to manipulate them in hi-resolution at nearly life-size brings a whole other dimension. Videos show the products actually being used, and clever utilities help you narrow your item search even farther. As you're wrapping up your time there, a window comes up with a Microsoft Tag displayed. It says that you can access everything you've looked at via your phone or PC by scanning the tag, so you whip out your phone, launch the app, and scan away.

Later, on the train, you're browsing the retailer's mobile site (triggered by the Tag scan), and you're able to create a full log-in that pulls in a complete record of your interaction and saved items from the touch window. Then, after dinner at home, planted in front of the TV and catching up on your DVR viewing, you're on the laptop. Having created an account via mobile, you're now able to log in to the retailer's main website, and still have access to the research you've conducted thus far. The retailer's site also lets you check out customer reviews and has links to articles and editorial reviews from third-party publications. After browsing through a few of those, you've narrowed your choices down to a select few items, but are looking for more personalized advice before making a final decision.

Conveniently, the retailer's site allows you to post your short list directly to Facebook and solicit feedback from friends. Within a few hours, friends who have actually bought the products you're looking at have weighed in and you have nearly made your decision.

Back on the retailer's site, you complete a package configuration. It might be the main electronics product combined with a few accessories, or the perfect dress and matching jacket. You save that package in your account, but aren't quite ready to buy - need to check it out in-store one more time.

So, the next day, you're off to the store. Upon arrival, you "check in" at the store by scanning your loyalty "card" off of your phone. A map of the store comes up, showing you where to find the items you had put together. The phone also asks you if you'd like to speak to a store employee or personal shopper. If yes, it automatically alerts the sales staff and sends someone to your location. But let's assume no, for now. Instead, you head directly to the right section, find your items, and get some hands-on time. If it's the dress, you'll want to go and try it on. The mirror in the dressing room also features some digital technology. You can see the dress in different colors, virtually "try on" some new shoes to see what matches best, or even request a different size from the sales staff. You can also snap a picture of yourself in the completed outfit, and post to Facebook for final commentary from friends.

Having fully vetted the product choice, now it's a question of price. No problem there; scan the bar code with your phone to launch a Web price comparison. Maybe you even find a better price. You show that to the sales staff and they offer to match on the spot.

Done.

This kind of back-and-forth, non-linear shopping journey is the new way that people shop for considered purchases; or, it's at least the way they want to shop. All of this technology exists today, and yet no single retailer embraces it to make the multi-channel experience seamless and easy. Instead, shoppers wind up with multiple third-party sites or utilities, paper notes, and a frustrating lack of integration between online and brick and mortar. Retailers of the future must embrace transparency, social networks, integrated systems, and the mobile phone as the connective tissue that binds it all together. You, Mr. Retailer, can either own the experience this way, or let some random third party (or worse yet, your competitor) bring these valuable tools to your shopper.

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ABOUT THE AUTHOR

Jeremy Lockhorn

Jeremy Lockhorn leads the emerging media practice (EMP) at Razorfish. The team functions as a think-tank on new technologies and next-generation media, and operates as an extension of current client teams. EMP is focused on driving groundbreaking marketing solutions for clients. Jeremy is a filter, consultant, and catalyst for innovation - helping clients and internal teams to understand, evaluate, and roll out strategic pilot programs while reinventing marketing strategies to leverage the power of emerging media. Jeremy joined the agency in 1997 and is currently based in Seattle, WA. His Twitter handle is @newmediageek.

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