While more consumers are shopping and comparing prices online, the store is still relevant.
Retailers are experiencing an unprecedented rate of market change driven by a time-starved, digitally-empowered and increasingly elusive consumer. Consumers have access to extensive product information and can comparison-shop at the touch of a screen. With the range of technology options available, consumers are more knowledgeable and more demanding, expecting to conduct transactions when, where and in a manner of their preference. The consumer’s search for value is also putting increasing stress on retailers to retain loyalty.
These observations are confirmed by recent NCR research showing 67% of North American consumers switch between retailers to get price discounts and more loyalty points. These same consumers increasingly use technology when searching for the best deals and are accustomed to the personalization that technology gives them. Consumers expect retailers to understand their preferences (how they prefer to do business) and their presence (where they are).
With the increased use of technology and the rapid growth of online shopping, you might think the store is less relevant. While it is true that nearly half of retailer volume is influenced by the web, 96% of transactions are still completed in a physical store—and consumers are still looking for an enjoyable shopping experience when they get there. To deliver a compelling shopping experience, the retailer must be able to seamlessly respond across channels to their customers, whether they are out of store (on the Internet at home or office), near store (with mobile and GPS) or in-store (at any touchpoint from kiosk to self-checkout).
Retailers who succeed in this environment are those who evolve their business models in ways that acknowledge the consumer-driven reality. Grocery stores are in a unique position to develop strong customer relationships because of the numerous in-store touchpoints. Additionally, grocery shopping is frequent and consistent, affording grocers opportunities to engage consumers regularly. Grocers that adopt technologies that enable a personalized experience for shoppers foster greater customer satisfaction and enhance loyalty.
Engaging customers to influence purchasing decisions begins with recognition of the new, consumer-driven consumer-to-business (C2B) marketplace. In this C2B world, the successful retail model will have two significant characteristics, both applicable to grocers.
First, the C2B model will be one where interactions are personalized based on consumer presence and preferences.
Presence: Out of store or near store, consumers make purchasing plans and decisions (researching recipes and building grocery lists) where they choose and from the channel they prefer—grocers can meet customers where, when and how they are present, communicating important discounts/promotions or allowing for coupon downloads.
Preference: Knowledge of a customer’s personal preferences—and grocers’ subsequent response to that insight—creates value for both parties. A grocer can utilize an individual’s preference information to offer name recognition, language choice, personalized promotions and tailored recipe suggestions specific to tastes, online or at in-store kiosks and point-of-sale.
Secondly, the new C2B retailing model will also be defined by convergence. Convergence brings structure to the chaos and confusion of consumer interactions. Facilitated by the availability of wireless communication technology, it will allow consumers to easily communicate their presence and preference via the channels of their choosing and will deliver timely, personalized transactions, information and promotions. It will do this seamlessly across all channels, including the web, assisted and self-checkout, informational and transactional kiosks, digital signage, e-marketing sites and mobile technologies.
The benefits a retailer can realize by increasing their influence in the purchasing decision process are too compelling to ignore. The grocery shopping process typically begins “at home” with steps including researching recipes, making a meal plan and building a shopping list. At each of these steps, shoppers are shaping buying decisions.
The next steps provide additional opportunities for grocers to influence purchasing decisions of customers in-store while they are shopping, and then at checkout. Location identification systems via mobile device can alert store personnel of a customer’s arrival and download the shopper’s list to appropriate departments. The download can initiate necessary food preparation activity in relevant departments such as the bakery, deli or meat counter. Furthermore, interaction between in-store kiosks and wireless devices offer shoppers the convenience of downloading coupons and other information onto their mobile devices quickly.
The next few years will be a time of significant movement toward the promise of converged retailing, as disparate technologies and channels converge. Grocers hoping to survive in this new landscape must integrate technologies that maximize operational efficiency while enhancing the consumer shopping experience if they hope to win customers and nurture brand loyalty.
Mike Webster is vice president and general manager, retail and hospitality for Duluth, Ga.-based NCR Corp.