Omni-Channel Retail Series

The Store of the FutureHappening Now:Part 1: Interactive Digital Displays

The Store of the Future combines the best eCommerce has to offer - where consumers are in the driver’s seat and the possibilities are limitless - with the sensory experience that you can only get in-store.

Introduction

According to the estimates by McKinsey & Company, about 85% of retail

value is still expected to be generated in bricks-and-mortar in 2025. But that

doesn’t mean retail formats aren’t changing for traditional and online retailers

alike.

From interactive displays, mobile clienteling apps, new

retail formats and even the re-emergence of

catalogues, the store of future is the intersection

of experience and technology, physical and

virtual, where retailers have merged the

ability to see, touch, feel & smell with the

same speed, convenience and variety

shopping online has conditioned us

to expect.

Part One: Interactive digital displays are redefining the shopping experience

Digital storefronts, magic mirrors and virtual dressing rooms are transforming how consumers interact with physical retail. Three reasons why you should take notice:

1 Personalized experiences drive loyalty. Without it, customers will leave.

A recent Infosys survey reported that 78% of consumers are more likely to be a repeat customer if a

retailer provides them with targeted, personalized offers. While the CMO Council reports that more than

50% of U.S. and Canadian consumers consider abandoning their loyalties to retailers who don’t deliver

relevant offers. Do it right and 86% of consumers will pay up to 25% more for a better experience.

(Source: RightNow Customer Impact Report)

2 Consumers still prefer in-store.

While eCommerce sales grew 15.4% from 2013 and now represents 6.5% of total sales, and

Goldman Sachs projects mobile commerce to drive nearly half of all e-Commerce sales in 2018,

consumers still prefer shopping in-store.

69% of consumers indicated they search online before buying in-store compared to 46% of

consumers who browse in-store before buying online. While a study from A.T. Kearney shows that 2/3

of customers purchasing online use a physical store before or after the transaction indicating that even

in the case of online sales, retail interactions influence online commerce.

3 Digital leaves data breadcrumbs that pave the way to unprecedented retail insights.

Despite the fact that retailers own the transaction, many lack real insights into their customers at

an individual level. Loyalty programs have attempted to bridge the gap but continue to be a topic of

major debate and financial liability. Marry that with increasing consumer privacy regulations and the

mounting number of data breaches (43% of companies had some form of data breach in 2014 alone),

and it’s easy to understand growing concerns among consumers and retailers alike. But according to a

study by Aimia, consumers are still willing to share their data in exchange for better offers or better

experiences.

Rebecca Minkoff’s Digital Pop-up Store Converts Mall Shoppers to Mobile Sales

Rebecca Minkoff teamed up with Westfield Labs and eBay to make Holiday shopping a breeze. Consumers browse products, select their items and proceed to checkout by pushing the order to their mobile phone delivered via text message or accessed via a short code URL. Checkout is simple with PayPal or debit and credit card options available via guest checkout.

Launched just in time for the 2013 Holiday Shopping Season, the Rebecca Minkoff digital storefront is a

modern approach to pop-up stores designed to bring the ease and variety of digital eCommerce to mall

shoppers.

Magic Mirrors Transform In-Store Shopping

Retailers like Rebecca Minkoff seek to elevate the retail experience through connected stores that combine RFID, mobile apps and interactive displays.

“We see a woman who either wants to shop as efficient as possible on the one-hand, or wants to truly have VIP experience on the other. This store has been built with technological efficiencies to help her achieve either of those goals. We wanted to create the ideal shopping experience for this generation of women, and to connect with the customer in a way that fits in to her busy lifestyle, while also maintaining the hands-on gratification that only brick and mortar stores can offer.”

– Uri Minkoff

Order a drink, browse products and select items to send to your dressing room through the “Connected Glass”. Enter your mobile phone number and get a text message when your drink or dressing room is ready. Checkout options include PayPal, mobile wallets and traditional credit card, debit card or cash options.

Mobile convenience also means mobile tracking. In-store cameras track individual shoppers through their mobile device allowing retailers to optimize store layouts, pricing and displays providing event tracking and analytics similar to what retailers can get from eCommerce.

Shoppers can call their stylist, adjust the lighting and even save the items they’ve tried on to their profile.

Creepy orConvenient?

Augmented Reality Delivers The Virtual Dressing Room

Where next generation magic mirrors, like the sophisticated

interactive dressing rooms Rebecca Minkoff launched late 2014,

seek to improve the dressing room experience, augmented reality

seeks to replace all (or most) of it. Augmented reality isn’t a new

concept, but until recently, it hasn’t garnered much more than the

fleeting excitement from Google Glass. Designed to allow

consumers to experience products in 3D, many brands have been

using some form of augmented reality since 2010.

In 2011, UK department store TopShop launched their first Virtual

Fitting Room, AR Door, in Moscow. Customers could select a

garment off the rack and see themselves onscreen. Microsoft

Kinect technology allowed the Microsoft Kinect technology allowed

the user to control the program by pushing virtual buttons in the air.

Augmented Reality at the Makeup Counter

Sephora has partnered with ModiFace to allow customers to apply virtual makeup with a 3D augmented reality mirror currently only available at Sephora’s Milan store.

Which augmented reality use cases do consumers believe will impact their likelihood to purchase?

Uniqlo first introduced Magic Mirror technology when they launched their San Francisco store in 2012. Consumers can try on an item and use the touch panel to see it in other colors through the mirror display.

Source: Accenture 2014 Augmented Retail Survey

Join us for Part Two: Mobile ClientelingDelivers The Endless Aisle

The Store of the Future doesn’t end with magic mirrors or virtual dressing rooms. Mobile has a larger role to play in the consumer journey than mobile commerce, wallets or consumer apps. Stay tuned for part two of this four part series, “Mobile Clienteling Delivers The Endless Aisle,” in which we’ll explore how retailers are improving in-store experiences by taking a page from Amazon and Apple’s playbooks.

Sources Cited and Additional Resources:• US Census: “Quarterly Retail eCommerce Sales 4th Quarter 2014.”

• RightNow: “Annual Customer Experience Impact Report.”

• The Atlantic: “Goldman: There Will Be as Much Mobile Commerce in 2018 as E-Commerce in 2013.”

• Business Insider: “Reverse Showrooming: Bricks-And-Mortar Retailers Fight Back.”

• A.T. Kearney: “Omnichannel Shopper Preferences.”

• Accenture Interactive: “Shoppers Prefer Personalization Over Privacy.”

• UPS: “Pulse of the Online Shopper.”

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