5 In-Store Trends Radically Reshaping Retail Marketing

In-store shopping vs online shopping debate has grabbed the limelight for quite sometime in retail. And the discourse has only reinstated that the growth of e-commerce in the retail sector has not reduced the importance of brick-and-mortar stores for consumers. As confirmed by a recent TimeTrade survey, 71% of the US consumers prefer to shop from physical stores even if the same products are available online. At the same time, according to the most recent quarterly figures from the US Census Bureau, online shopping accounts for only about 9% of the total consumer retail spending.

Today consumers are fully-aware of the fact that the value propositions for in-store shopping are different from that of online shopping and so they accordingly make their choice. For instance, 85% of the US consumers like to shop in stores because they want to touch and feel items before buying them. Retailers who understand the different reasons of consumers to choose one kind of shopping over the other, concentrate on designing a strategy that aligns well with both consumers’ needs and business goals.

One of the biggest parts of the strategy building program for brick-and-mortar stores involves adapting in-store trends to revamp the entire shopping journey of a consumer, right from using latest in-store technologies to analysing the approach to retail marketing. In this blog post, we bring to you a list of five in-store trends that are reshaping brick-and-mortar stores and bringing more value to shopping experience.

1. Mixed Reality is gaining tread

Mixed Reality, the latest trend in retail space, is the merger of eCommerce and augmented reality with brick-and-mortar stores to change the latter beyond recognition. The essence of this merger lies in helping customers out by using the latest technologies and the customization it allows. With Augmented Reality (AR) predicted to grow to $90 billion by 2020 as per Digi-Capital, an investment firm, retailers are testing it out in their stores to see what it can do for both their business and consumers.

Here are some of the retailers that have already tested or are in the process of testing Mixed Reality.

I. Using mobile, semi-intelligent robots

Orchard Supply Hardware store in Palo Alto, California, is using OSHbot, a mobile and semi-intelligent C-3PO robot designed by a local startup Fellow Robots to assist customers and work alongside human employees in shops.

Image source: pinterest.com

The five foot high frame of OSHbot comes with a pair of large LCD screens that displays in-store offers. A customer simply has to press the microphone icon on the front screen and specify the item he/she is searching for. The screen then updates to show all the variety and types of that item in stock. When the customer selects one of the item images displayed on the LCD screen, the Oshbot then gives a magnified picture of the item to the customer and displays a map showing its location. The OSHbot also asks the customer, “Would you like me to take you there?”. If the customer presses yes, the robot then rolls off to direct the customer.

Similarly, a Silicon Valley hotel is using a semi-intelligent dustbin-shaped R2-D2 robot named Dash to serves guests, which also has an LCD screen like OSHbot.

Image source: robohub.org

When a hotel staff member taps in a passcode on the LCD screen, Dash’s lid flips up. The space inside is enough to accommodate toothbrushes, soaps or a small pillow. Dash can be used to easily deliver these items to a hotel guest in his/her room. When Dash reaches his destination, the phone inside the room rings to announce his arrival. He then detects the door opening and pops his lid to reveal his cargo. Thus, prompting the guest to rate his service.

II. Using Smart mirrors

Iconic fashion brand Polo Ralph Lauren embraced in-store high-tech with new ‘smart mirrors’ in fitting rooms. Once a customer walks into the fitting room, the smart mirror recognizes the item – right from its size to its colour – he/she has brought in via a small RFID chip.

Image source: businessinsider.co.id

The mirror then displays the number of items you have and presents a touch screen. The customer gets the option to see the other available sizes and colours. In case the customer wants to go for another size or colour, he/she can place a request then and there. The sales associates in the store will then instantly receive a notification on their device about it and will quickly deliver the right size to the fitting room. This is followed by the smart mirror showing recommended items to complete the outfit from head-to-toe.

Other well-known retailers like Neiman Marcus, House of Blue Jeans, Nordstrom, and Rebecca Minkoff have also adopted similar smart mirrors to enhance the shopping experience of customers. The touchscreen mirrors at a Bay Area Neiman Marcus give you a 360-degree view of the outfit you’re trying on and let you share your new look with friends. Smart dressing rooms at Rebecca Minkoff’s fashion-forward SoHo boutique in New York take care of everything from your Champagne order to your vacation wardrobe.

Image source: cbsnews.com

The MemoryMirror used at these stores leverages AR and allows shoppers to try on different outfits, explore colours and patterns, and gauge how clothes will fit, all with the swipe of a hand.This smart mirror even remembers previous outfit choices, allowing shoppers to compare two or more outfits. It also allows them to add accessories. Thus, by using such smart mirrors, retailers can create memorable and enriching shopping experiences for customers.

III. Using interactive store windows

What could be a better way to grab the attention of pedestrian traffic on the sidewalks of New York City than an interactive store window display like the one used by Kate Spade Saturday?

Kate Spade Saturday created four walk up 24-hour open shoppable interactive windows in New York City, prior to opening dedicated retail stores. These interactive store windows, painted with bright yellow hue and accented with bold black and white graphic patterns, have large touch screen displays on which customers can browse the entire collection and get specific product information.They can view the shape and fit of a product via model photos.

Image source: rabbitshapedclouds.wordpress.com

A customer simply needs to enter his/her mobile phone number to order a product. Once the order is approved via a confirmation text, a messenger delivers the products within select NYC areas within an hour for free. The customer can then make the payment upon delivery.

2. Beacons are slowly becoming mainstream

Retail stores are among the front-runners in adopting iBeacon technology. Leading retailers from Target to Macy’s to Walmart have all invested in the technology in order to deliver interactive and enhanced shopping experiences. About one-third of the top 100 retailers have already used beacons, according to Business Insider. The BI report also projects that 85% of these retailers will deploy beacons by this year’s end.

Beacons in retail are being effectively used to solve a multitude of use-cases from value-added services like ‘click-and-collect’ to loyalty programs that combine mobile payments to even calling staff members for assistance. The most widely found use-case has been delivery of contextually relevant product-related information and best deals via coupons. According to Juniper Research, the number of coupons delivered annually to consumers via beacons will increase from 11 million to nearly 1.6 billion by 2020.

Image source: ibeacon.com

Not only this, given the omni-channel nature of retail today, beacons are a boon to retailers as it efficiently merges together customers’ preferences and purchase habits across online and physical stores. This means that the mobile promotions and content that is sent to customers while they are in the store can be tailored to the customers’ browsing patterns on the store’s online page.Thus, beacons are becoming an inseparable part of in-store personalization strategy. They are also assisting retailers in retargeting customers with relevant offers.

Various stores are implementing iBeacon technology for numerous other purposes such as hosting interactive promotions, automating customer check-ins, gathering customer information, and adjusting merchandising strategies. This is because beacons are relatively inexpensive, easy to deploy, highly effective tools in digital marketing strategy. Recently, Rite Aid deployed 4500 beacons across all its stores, making it the largest beacon deployment in the retail sector.

3. Virtual Reality is becoming more prevalent

From reinventing visualisation and product development, to changing shopping behaviors and engaging customers in immersive brand experiences, leading brands are already starting to integrate Virtual Reality (VR) solutions into their strategies and plans. Brands such as Ikea, Lowe’s, Toms and North Face have already turned to VR to boost sales and make shopping a fun experience.

For example, Lowe has added a futuristic edge to the process of remodeling a kitchen or bathroom by installing a simulated space, called Holoroom, that enables shoppers to see a 3D mock-up of their renovation plans. A customer can personalise the simulated space with individual room sizes, specially selected equipments, colors, and finishings from a selection of Lowe’s products. In addition, the store equips customers with an Oculus Rift virtual reality headset which allows them to see the results as if they were standing in the middle of their reconstructed space. Customers can also view the designs on YouTube 360 with a Google Cardboard viewer, which Lowe’s gives out free through on-site vending machines.

Image source: media.lowes.com

Last year, Toms, the shoe company, put virtual reality headsets into more than 100 stores around the world. The headsets showed a video depicting a trip to Peru, with panoramic views of a schoolyard as children were handed out boxes of shoes.

Image source: cassandra.co

Retailers are investing in virtual reality to lure people back into stores. Also because it adds an experiential aspect to in-store shopping, unrelated to the actual buying of products. The space of VR is slated to see an upward swing as per research. According to advisory firm Digi-Capital, the annual revenue of VR industry is forecasted to grow from less than $1 billion to $30 billion by 2020. In another report by Piper Jaffray, the annual sales of headsets is projected to hit half a billion by 2025.

4. Retailers are trialing new-store concepts

When customers decide to buy in person, they make the effort to travel to a store, give up on time, interact with staff members and spend money instead of opting for online offers — because they believe that there is some unique “payoff” in buying in-store. Most retailers adopt new technologies to create a unique selling proposition. However, some retailers are now opting for a different route by trying out new-store concepts.

For example, Whole Foods Market launched their new-store concept called 365, a lower-priced, no-frills version of the chain. The concept behind the store was to create a modern, consistent design, use innovative technology, and carefully choose just the right product mix to ensure an efficient and rewarding shopping experience in a smaller-store format. With a smaller, more streamlined, warehouse-like footprint, 365 by Whole Foods Market is closer to a combination of a fruit stand, convenience store, and a restaurant than a traditional grocery store.

Image source: foxnews.com

This scaled down version of the retail chain has taken many factors into account. Some of these are:
a. Smaller footprint – The store is roughly 30,000 square feet vs a minimum average of 43,000 square feet.
b. Reward programs – The new store has a reward program as a perk for shoppers.
c. Pricing – Much of the produce is priced per-item, instead of per-pound.
d. High-tech features – The store is equipped with speedy checkout areas that only accept Apple Pay or credit cards.

Shoppers are continually looking for less expensive and more elevated shopping experiences and brands are aiming to do just that with new-concept stores.

5. Smart Shelves are increasingly engaging customers

According to the Harvard Business Review, out-of-stock items or stock-outs contribute to significant revenue losses for retailers. As per the survey data, as many as 21% to 43% of customers who face a stock-out, go to another store to buy the product. For a billion-dollar business, this would roughly mean $40 million in lost revenues.With smart shelves, retailers are leaving the concern related to stock-outs and revenue loss behind.

A smart shelf is a shelf equipped with an RFID reader, which can be built-in or installed on normal shelves. The RFID reader continuously scans the RFID tagged items on the shelf and notifies the back-end system about the existing items and their movement. It identifies items that do not belong on a certain shelf as “misplaced items”.

Image source: cincinnati.com

The entire system tracks items and keeps a note of their movement to provide retailers with information that can be analyzed and translated into customer preferences. Besides from notifying when products are running out, missing or misplaced, a smart shelf can also send alerts regarding the expiring dates of products.Thereby, smart shelves provide retailers with various ways of improving their customer service and increasing sales as well. Kroger is one of the many retailers that has successfully experimented with smart shelves. They tested video and no-motion ads that have boosted sales, besides trying audios and flashing reminders.

In-store shopping is not going away, but it is getting an upgrade. Such trends as those listed above help close the gap between in-store shopping experience and online shopping experience, making a shopper’s journey more enjoyable.

If you have any other interesting in-store retail trends in mind, please share them in the comments section below.

If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!