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Digitizing the Store - What Retailers Need to Consider

The first wave of retailers’ expansion from brick and mortar into ecommerce was marked by urgency. Instead of making significant modifications to their existing store-centric model, most retailers set up separate ecommerce infrastructures, including distribution centers, in order to quickly establish an online presence and fulfill demand.

As ecommerce demand skyrocketed and started accounting for the bulk of growth in new revenues, retailers started to look at their extended store setup as sources of fulfillment for ecommerce orders, leading to omni-channel integrations like “buy online, ship from store,” “buy online, ship to store,” “buy in store, deliver to home,” and so on.

But despite all this transformation, over 90% of all retail revenues continue to come from physical stores[i], and retailers are continuing to make significant changes to their in-store experience to keep up with consumers’ heightened expectations. Shoppers are using tools like social media apps and mobile shopping aids to engage with retailers on multiple fronts, and the most innovative retailers are rising to the challenge.

As technology continues to impact the shopper journey, we will see further fusion between the worlds of online and offline, as the in-store experience becomes increasingly digitized.

Technology Integration

eMarketer estimates there will be 1.75 billion smartphone users worldwide in 2014[ii], and Pew Research indicates that 42% of U.S. adults now own a tablet [iii]. As global penetration grows, we expect retailers to invest more in integrating tablets and smartphones into the store experience. However the smartest brands will do so in a careful manner to ensure consistency, bringing the best of both worlds together in a way that maximizes what shoppers will actually use. Kroger’s is a good example of a retailer that already had a very successful loyalty card program with most customers using their cards. Now their mobile app is on the way to not just replacing the plastic loyalty cards, but also integrating digital features like electronic coupons, prescription renewals, shopping lists, weekly promotions and so on. It organizes everything a shopper would want or need to do for their regular supermarket trips into one branded app that customers use at home and in the store.