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Retailers Invest in Technology to Create Unique Customer Experiences

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Consumers are spending more than ever on e-commerce items; online spending grew 14 percent in 2013, according to analytics firm comScore. But most shoppers look at apparel buying as an interactive activity that involves friends or chatting with a sales associate, not to mention trying on the clothes. This is leading some retailers to combine technology with the in-store experience in an effort to provide consumers with more personalized shopping.

Boston Proper began as a catalog company that experienced excellent sales when it began selling online.  After Chico’s FAS bought the brand, the company’s president, David Dyer, wanted to open store locations. He turned to Kramer Design Group, a New York-based consultancy. Principal Robin Kramer says, since this was Boston Proper’s first go at physical stores, “an incredible opportunity” presented itself to try something new.

“We challenged traditional brick and mortar, and approached the project differently by designing a smaller retail footprint, thus carrying less merchandise in-store, and seamlessly integrated e-commerce into the experience though tech tables in the dressing room area,” Kramer explains.

Since each unit is relatively small, store associates carry iPads to access Boston Proper’s entire offering. This way, shoppers can try on clothes, but work with the associate at the tech table to complete the outfit in preferred colors. The order is then placed and items are shipped, often arriving at the customer’s home the next day. Kramer adds, “Combined with Chico’s excellent sales support and ‘stylist’ training, the omnichannel store design has been a huge success.”

On average, consumers shop for clothes about twice per month in-store and once per month online, according to the Cotton Incorporated Lifestyle MonitorTM Survey. But consumers have come to spend more time browsing clothing online (100 minutes per month) than visiting actual stores (97 minutes).

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Scott Kreisberg, founder and CEO of One Step Retail Solutions, says despite the growing popularity of online shopping, consumers prefer the intimacy and added value in-store shopping provides.

“They don’t seem to be simply in pursuit of the ultimate deal, but rather, the ultimate shopping experience,” Kreisberg says. “Buying over the Internet can be less expensive, convenient and for many, a way to avoid the hassle of driving to a physical store or dealing with sales people. But convenience and a killer deal come at a cost, specifically the missed opportunity to fully participate in the shopping experience–try something on, ask questions, touch the product or share a day at the mall with friends.”

Brick-and-mortar stores have also retained their appeal among apparel shoppers because of reservations people have about buying online. The Monitor shows more than eight out of 10 consumers are “very or somewhat concerned” about online shipping costs (86%), followed by return policy (83%), apparel quality (82%) and availability (76%), as well as “not being able to try on the clothes” (72%) and “not being able to physically touch the apparel” (61%).

This means potential opportunity for large and small stores alike. Nordstrom introduced an initiative where top items on Pinterest are showcased in the store arrangements. So, if users like something from their smartphone or tablet, they can look for it in-store. Meanwhile, American Apparel has the Shopping Assistant mobile app for in-store use. It sends deals to the user’s phone when they walk into any American Apparel store. They can scan an item’s barcode to see full outfits for pairing ideas, as well as pay with a saved LeClub account payment option.

Kreisberg says his firm helps retailers use technology to increase speed and efficiency at checkout, for CRM (customer relationship management) integration and to upsell recommendations at point-of-sale. It also provides detailed customer metrics like buying history or preferences. The various tools “enable retailers to make smarter and more profitable business decisions that ultimately benefit the customer and help ensure loyalty and better brand recognition,” he says.

Working in retailers’ favor is the fact that the majority of consumers (54%) say they “love or enjoy clothes shopping,” up from 51% in 2012. Among women, that number jumps to 67%. Shoppers spend an average $72 per month on apparel, a figure that increases among 25-to-34-year olds ($84) and those making $50,000 or more ($105).

An Accenture study found that in the U.S., there is a 5% increase in switching, where consumers “do business elsewhere” due to poor customer service. In this “Switching Economy,” $1.3 trillion in revenue is up for grabs. The study concludes that companies must leverage customer relationships to drive purchases, which can be done by eliminating the complexity of analog processes and building new capabilities based on a digital foundation.

Separately, a survey by retail consultancy WD Partners finds the in-store tech features consumers like the most are, in order, interactive vending machines, buy online/pickup in store, customer identification, mobile-based coupons and mobile checkout.

Kramer says every retailer, large or small, can use digital means to encourage in-store purchasing through a true omnichannel design.

“We believe brands should make every retail experience feel special, so that the consumer is driven to visit each unique location,” she says. “Brick and mortar stores should offer more experience and have more brand language. It’s like going to Disney World and getting the souvenir after you have been on the rides.”

 

This article is one in a series that appears weekly on sourcingjournalonline.com. The data contained are based on findings from the Cotton Incorporated Lifestyle Monitorâ„¢ Survey, a consumer attitudinal study, as well as upon other of the company’s industrial indicators, including its Retail Monitor and Supply Chain Insights analyses. Additional relevant information can be found at CottonLifestyleMonitor.com.

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