The other day my wife and I were driving over to visit her father, and we had to stop at a CVS Pharmacy on the way. When Jill walked through the doors, the CVS app on her iPhone chimed, and welcomed her to the store. It also told her about unadvertised specials that were available.
She found it disconcerting.
“That’s nothing,” I told her once we were back in the car and on the road again. “Soon enough those offers are going to be personal to you, based on what you’ve bought in the past, and probably based on what you’ve bought elsewhere.”
“The app won’t be able to tell me that if I’ve turned it off,” Jill said, “since I’m finding it all a little creepy.”
“Well, there’s that,” I agreed. “A little less intrusive is that you’ll be wandering around in stores and at various places in the aisle it will know you are close by and alert you that the product directly in your line of sight is a limited-time sale item.” This is the work of something called beacons, which might be a box or simply a computerized display label that senses your presence and pushes information to you.
I suspect Jill remained less than impressed that a digital network would be diligently following every purchase she made in every pharmacy she entered.
It may take a little getting used to, but this is where things are heading, and heading there fast. Retailers are experimenting with the conflation of digital with in-store sales, and finding it a powerful combination. The data shows that shoppers who incorporate real-time digital interaction when shopping in a store are twenty percent more likely to make a purchase than those not using digital. Thirty percent are more likely to make a purchase on a day when they incorporate social media in their shopping process. And nearly half of consumers say that using digital makes their in-store shopping easier and more successful.
In other words, the old days of “brick and mortar” stores being somehow separate from “online” stores are gone. The word for this in the industry is omnichannel: a consistent shopping experience that blurs the boundaries between the online and offline worlds, anytime, anywhere.
At first glance it may seem that it is just a fancier version of targeted advertising. But in reality, it is mostly consumers leveraging the available technologies to manage their own shopping experience. Digital – whether online product reviews, recommendations from social media, or interactive and context-sensitive information such as what happened to Jill in the CVS – is moving the balance of power away from the retailer and to the consumer.
What is even more interesting is that this is a truly global phenomenon. Digital influence on in-store shopping is happening everywhere, although not every country is going about it in exactly the same way. Consumers in the United States, for instance, are the most influenced by digital when shopping in a store, while shoppers in the Netherlands, Germany, and the UK show lower levels of influence. Smartphones account for nearly all of the digital shopping activity in India, suggesting that few consumers are bothering with desktops or tablets. And Chinese consumers are highly influenced by social media, often looking for guidance and validation from their networks.
Taking a step back, this is all part of the transformation of in-store shopping from a transaction to an experience. For a vast number of routine products we can shop, select, and purchase from the comfort of our homes and have the product arrive at our door within a few days. To get us into the physical store requires that trip to offer something more than, or different from, a solely online experience. This is why shopping plazas are turning away from apparel stores – so vulnerable to online shopping competition – and toward businesses that require physical interaction, such as cafes, pet groomers, fitness gyms, and medical facilities. And all of these will be incorporating digital in various ways.
Retailers are also promoting more engaging in-store experiences, such as parties, classes, and personal consultations. They are moving away from big anchor stores and testing small, technology-enabled showcase locations. They are still working out the kinks – and trying to determine the full value – of what is known as BOPUS (buy online, pick up in store). Some real estate holding companies are actively trying to turn their retail locations into modern versions of full-fledged community centers combining retail, services, and places to just hang out.
Expect to see a huge amount of experimentation and innovation over the coming years.