Omnichannel

How retailers are reinventing physical storefronts

The retail shopping experience has dramatically changed over the past two decades, and it’s destined to continue changing, with a merging of the in-store and online experiences.

Photo: Adobe Stock

November 16, 2023 by Mayank Ranjan — SVP & Regional Head – Consumer, Retail & Logistics at Infosys, Infosys

With more than five billion internet users worldwide, the number of people making purchases online is continuing to increase. In 2022, retail e-commerce sales were estimated to be $5.7 trillion worldwide, and this figure is expected to reach new heights in the coming years.

With the lifecycle of e-commerce growing, thanks to Amazon and the pandemic, many physical stores are finding that their online sales and growth rates are plateauing. That underscores the importance of companies focusing on their digital sales, but it's still the case that e-commerce is a small part of the total shopping piece, only accounting for about 15% of customer purchases in a large market such as the U.S., according to the Census Bureau.

So, while there is still a critical need to focus on customers' in-store experience, it's just as important to ensure that the in-store and digital platforms grow together through a consistent brand experience across channels. Companies can do this in three ways.

First approach

First, make it easier for customers to find products and have them delivered. The layout of stores — particularly large ones — can be confusing and can ultimately overwhelm customers. In those cases, shoppers will devote less time to browsing and ultimately spend less. Stores need to simplify layouts, and analyze shoppers' in-store patterns, which will help reveal the best (and worst) place to place products.

Something as simple as easy-to-read signage can also help increase the likelihood that shoppers will find what they're looking for.

Also important is precisely how much product to display. Too little can depress sales. But too much can cheapen the overall presentation and confuse the shopper. The right amount will vary based on the type of store. A grocery store, for example, will display more than a luxury goods store. But most stores are in between, and they should experiment with display volumes.

Stores can also follow the example of a highly successful retailer such as IKEA. It has simplified the shopping process in some areas by opening what it calls "Plan and Order" stores, which are smaller than the usual outlets. Their focus is kitchen, bedroom, and living room planning and customers can make free appointments to work with IKEA specialists in the store, who are armed with digital tools, to identify the products they want. Home delivery is available, as well as in-home assembly.

Delivery options are an increasingly important element of the customer experience. Some customers may want to shop for and buy items in the physical store, but then have the store handle shipping and delivery — even for small-sized items. And many retailers in the U.S. now offer same-day delivery, including Walmart, Target, Costco, Sam's Club, Best Buy, as well as leading drug stores and clothing stores.

Provide information

Second, incorporate easy access to information, such as scanning a QR code. Today's customers are conditioned to spend time online reading up on the products they're buying. And the desire for information about a product may be greatest when standing in the store aisle, when choosing whether to make a purchase. Entering the store's website into a browser on one's phone can be unwieldy, and a Google search may lead to unreliable sites.

One of the best ways to overcome these challenges is to make QR codes available for individual products. They are easier to access than websites (there's no URL to type in) and they can be set up to take the customer direct to the store's site, ensuring they receive the preferred information. (Some clothing chains, like Zara, put their QR code in the windows of their stores, giving new meaning to "window shopping.") QR codes can also be set up to accept payment, thus simplifying the purchasing process and increasing consumer spend.

Another useful example comes from Belgium, where IKEA stores have digital kiosks that enable customers to browse the IKEA website. This makes it possible to see all of the products for sale – and the physical stores where they're available, as well as delivery options.

Grab digital tools

Third, equip store associates with digital tools that can help shoppers be introduced to in-store products and learn more about them. Consider Target, which can send in-store shoppers text messages containing product recommendations, and even offer on-demand beauty consultations.

Retailers can also follow the example of Whole Foods Market's "Pay With Your Palm" experience which makes purchasing products very convenient for the shopper. Amazon "Go" stores took convenience to the next level, where customers' phones handle the tech experience. Sensor technology detects when items are removed from store shelves (or returned there). When customers are finished shopping, they simply exit the store, and they are charged. There is no need to pay a cashier (and the stores don't have cashiers).

Another example is Tractor Supply Company, a rural lifestyle retail company that has made in-store shopping efficient by empowering store associates and customers with rich product information. This makes it convenient for shoppers to buy products on the side lot (such as refilling their propane tanks), therefore elevating the in-store shopping experience for their customers.

For people throughout the world, the shopping experience has dramatically changed over the past two decades, and it's destined to continue changing, with a merging of the in-store and online experiences.

The retailers who understand this, and act on it, will be the ones best positioned to realize the massive opportunities ahead.

About Mayank Ranjan

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