Retail Intelligence to success
Right now brick-and-mortar retail is accounted for the 90% of transactions and it not destined to decrease as fast as we expect taking into consideration the extraordinary success of e-commerce. The last number of Pambianco, an Italian specialized magazine, affirmed that by 2025 the stores will account for 80% of sales percentage. Therefore, the physical retail still has some moves to do in order to stay relevant in consumers’ minds.
Renato Borghi president of the Fmi (Italian Fashion Federation) explains why retailers shouldn’t be afraid of approaching digital strategies to increase their sales. Especially in the fashion sector, where competition is particularly strong, companies shuold have the aim of creating innovative shopping experience by merging offline and online. In order to do so retail needs technological innovation.
Right now shoppers have developed two types of behaviors identified as Topo and Ropo. The first one Topo, Try Offline Purchase Online, is the synonym of showrooming. It means that brick-and-mortar shops are used by consumers as giant fitting rooms, they come into the store try on products to see the fitting, sizes, colors, to touch the materials and then they come back home, evaluate the experience and decide whether or not buy the product online. This is the reason why many retailers are changing their approach focusing on showrooms. This space are usually provided with few numbers of pieces composing the collection so that clients can try them on, touch them, etc. Therefore the efforts are not directed to stocking and warehouse but to create engaging in-store experience. However, it is important to take into consideration the second type of behavior, the Ropo, Research Online and Purchase Offline. Due to digitalization and the Internet revolution, consumers have now free access to any kind of information regarding products and when it comes to fashion the online environment provide them with plenty of tool to webrooming. It means the act of looking offline for the right item or brand to then find the nearest point of sale, try it on and buy the product.
By taking care of both the situations retailers will success in the current difficult environment. This is the reason why companied need to invest in Retail Intelligence and introduce technologies able to monitors the interactions of consumers within the point of sale as well as online. According to Zebra which has developed a report regarding the use of technological solutions in Europe, 1.700 retailers are aware of the fact that physical and digital retail must be unified. The 80% is looking at mobile devices and the possibility they offer as POS as well provide additional informational about consumers. More investments will be placed in mapping the movement of consumers within the point of sale to understand what kind of area are the most and less interesting, to visualize such information the Heat Maps is the right tool because it offers one-sight view of the activity within the store. Last, 75% are looking at counting systems which allow detecting the consumers’ traffic entering or exiting the store and the dwell time meaning how much time customers spend within the point of sale. In a previous article we have treated in details the importance of investments in retail technologies.
Some retailers are already starting to develop strategies based on the collection of the data previously mentioned. One of them is Farfetch. The luxury fashion technological company will present the next autumn “the store of the future“. The new store will represent the perfect combination of online and offline, every in-store technology will be connected employing the principle of the IoT (Internet of Things) and omnichannel.
Diesel, is using as well technology within its point of sale. The store in San Babila, Milano, is provided with digital signage, smart mirrors and digital fitting rooms.
Pepe Jeans has also developed a similar strategy to the Italian fashion house. In the flagship store in Regen Street, London, the brand has interactive fitting rooms directly connect with the sales assistant which are constantly available to answer to any clients‘ needs.
This is only the start of the application of technology to the retail environment in order to face the unpredictability of the modern consumers and adapt the shopping experience to their most personal needs. Retail Intelligence and the application of technological solutions in the stores are essential in success and create a loyalty bound with customers.