In my last article, Moving towards ‘Total Retailing’, I looked at how consumers are using the various channels available to them – online, mobile, high-street – to shop. This month I want to focus more on how retailers are using the variety of channels available to engage with customers and meet their expectations.
With the rise of the internet and web-based mobile platforms, consumers are now firmly established as multichannel creatures. This is especially true when it comes to shopping. Buying habits have evolved and as a result customers are increasingly looking for the same breadth of information and choice available to them online across all the various channels, including the high-street. So how do retailers respond to these demands?
As we have seen in the news recently, a number of well known retailers, such as Debenhams, B&Q and Morrisons, have recently launched online kiosks in store. This may seem counterintuitive when so many of us carry smartphones and broadband at home. However, according to latest figures from the IMRG Capgemini e-Retail Sales Index, online sales are up six per cent month-on-month, with £47 billionn spent online in 2011 to date. As a result, the hope is that in-store kiosks will meet the expectations of the modern, savvy shopper, and ultimately drive sales, improve customer service, and create a sustainable competitive advantage.
Naturally, this new development poses some interesting questions for analysts and industry commentators alike; is it just a fad, will it succeed, what is the true benefit, what does it offer the customer and will it last?
At Debenhams, the internet-enabled touchscreens, branded Debenhams Extra, enable shoppers to increase their knowledge of the retailer’s brand lines, check stock and order goods while on the shop floor. Debenhams also plans to link the kiosks to its point of sale system which will enable customers to pay via chip and pin, allowing for fast payment transactions. The move is part of the retailer’s ongoing strategy to extend its multichannel offering, bridging the capabilities of in store with its wider offering. Customers can enjoy a new, diverse retail experience with universal access to information and an infinite shelf. The technology will come in useful when the retailer launches a series of smaller department stores, as Debenhams plans to complement the kiosks with a click & collect service in the future. This will provide customers the opportunity to ‘self-serve’ and have full access to its complete product range.
The idea of universal access has also been adopted by Morrisons when it installed kiosks from Kiddicare.com – Europe’s largest online baby nursery retailer – in seven of its stores. The kiosks are designed to target the millions of customers that visit Morrisons’ baby aisles each week, allowing parents to order anything from a branded buggy to a car seat while they do their weekly shop. Morrisons’ customers are provided with a full product description, imagery and videos as well as other parents’ reviews of an item, helping them to make an informed purchase. This is a strategic sales tactic because as the economic recession continues to affect UK shopping habits, money-conscious consumers are increasingly demanding more information about products before they buy.
The fall in customer spending power has been reported by the IMRG Capgemini e-Retail Sales Index, which recently downgraded its annual growth prediction from 18 per cent to 16 per cent for 2011. Retailers are having to work harder to hit sales targets, and in the case of Debenhams and Morrisons, are using new innovative technology to gain a competitive edge.
The trend towards providing customers with greater product knowledge has also been developed by B&Q. With an average 40,000 products in every store, the issue of finding the right product was a daunting task to B&Q customers. However, the home improvement and garden centre retailer has recently rolled out Evoke Kiosks, a solution which enables customers to locate products, print out how-to guides and create project specific shopping lists. The technology also provides a commercial advantage as kiosks contain vouchers and special offers, ensuring no-one leaves without the product they intended to purchase.
As consumers become more dependent on the internet, so will their demand for products and services online. The movement towards this new, in-store technology is a direct indication that the relationship between these two mediums is strengthening. But how do we see this revolutionary technology expanding, and how will retailers use it in the future?
As seen with Debenhams, Morrisons and B&Q, in-store kiosks are making shopping exciting, personal and relevant, and due to the flexibility of technology, have the potential to evolve and meet customer demands in the future. The key consideration for retailers is that the technology needs to facilitate the branch experience and be part of the overall approach. In-store kiosks provide an additional channel to communicate with customers, and when combined with mobile marketing and other technological advancements, can greatly expand a retailer’s multichannel offering. The winners of this new, virtual retail landscape will utilise the power of the internet to feed its business intelligence, and strengthen the capabilities of its workforce – from CEO to the shop floor – to meet the demands of the 21st century shopper. With this in mind, it is fair to suggest that e-retail is no longer just online; e-retail is now in store and will continue to stay in store as part of a richer, multichannel retail experience, offering consumers greater choice and value.
Chris Webster is Vice President, Head of Retail, at Capgemini