[This article first appeared in Contagious Magazine – Feb 2013]

Retail and digital integration

When thinking about the integration of retail and digital it’s worth noting that they already are. Integrated, that is. People are integrating their retail and digital experiences, often in an ad-hoc manner, with the tools they have available. Software developers are providing numerous tools that help this happen. Retailers are typically not leading the integration.

As a society we’ve had almost a decade where we’ve lived with ecommerce. You could order a delivery from Pizza Hut online in 1994. That was back in the good old 20th Century. Back when people talked about the Information Superhighway and Apple released their newfangled PowerPC. Amazon arrived in 1995 and now it’s hard to imagine a time where we couldn’t buy online. There’s a whole generation that’s known nothing else.

Reasonable expectations

After a decade of ecommerce, shoppers have a set of quite reasonable expectations about what their retail experience should be like. These are expectations largely un-met by physical retailers. We expect to be able to compare prices; read/watch reviews from other customers; enjoy a personalised service and tailored recommendations; we expect to know whether something’s in stock in the size/configuration we want.

We’re used to having a range of delivery options that fit our busy lives. We expect home or workplace delivery slots on a specific hour of the day. When Amazon manages to provide the much-anticipated same-day shipping our shopping expectations will evolve again. Yihaodian in China already provide this same-day service for their customers. They also launched 1000 AR-only stores that can only be perceived through a smartphone camera, avoiding the overheads of a physical estate but still able to deliver a customer’s purchase the same day, satisfying impulse buyers. In the US, UPS have a range of “gopost” lockers in urban centres that your products may be delivered to. Another service option that will modify our expectations as shoppers.

It’s important for retailers to recognise the expectations we now have as shoppers, formed by a decade of ecommerce, because customer expectations should drive service evolution. A retailer without customers isn’t a retailer for very long.

Pervasive commerce

We’ve entered an age of Pervasive Commerce. As smartphones and tablets proliferate we expect to be able to browse and buy wherever we are. Technology enhances and accelerates our retail experience. Verdict Research estimate that 80% of the population will use mobile for some part of the purchase process by 2016.

For retailers there is an opportunity to merge their digital ecosystem (their websites, databases, mobile applications, social technologies and physical estate etc) with the digital ecosystems of customers. As data passes through these merged systems there’s a mutually beneficial opportunity to embrace Contextual Automation. This concept, the basis of a new book by Robert Scoble and Shel Israel, permits the automation of service provision based on context: who am I; where am I; how did I get here; what time is it; why am I doing what I’m doing (I ask myself that one a lot!); how much should I pay…

There are some retailers and services heading in this direction. Orbitz travel drew some attention last year when it was suggested their algorithm was pushing more expensive hotels to mac users. Burberry is famously bringing elements of their online experience into their Regents Street flagship store. Hointer’s denim store in Seattle removes the need for human staff altogether, opting instead for self-service via smartphone and robotic delivery to the fitting room. Wrapp has a social gifting service that drives people from Facebook to physical stores. NeoFace by NEC uses $880 facial-recognition software to allow physical retailers to automatically profile and recognise returning customers. McDonald’s is integrating mobile and personal data as part of their GOMCDO mobile payments and pre-order initiative in France.

In this time of Pervasive Commerce, retailers should recognise the expectations of modern shoppers, investigate how they can move towards a merging of personal and retail ecosystems and embrace the opportunities afforded by Contextual Automation.

Photo Credit: katzarella