Consumer Behavior

Reinventing the retail space using digital technologies

Scott Wassmer, GM of Americas, Appnovation, explains why retailers have an amazing opportunity to unify consumer data between the digital and physical worlds. Retailers who can take advantage of the opportunity will have an edge if they’re able to create a seamless experience between their online and in-person retail touchpoints.

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July 1, 2021 by Scott Wassmer — General Manager, Americas, Appnovation

As we start looking at the post-pandemic world, it's important to understand how the last year has changed consumer expectations and behavior in the retail space. Expectations around retail digitization have increased and a desire for the personalized experiences prevalent in the e-commerce space. There's a desire for these experiences to be translated from the digital world into the physical.

The truth is, razor thin margins generally hold companies back from making major investments in the physical retail space. But, the potential opportunities could be huge for companies willing to begin the transition, as advanced digitization and connectivity in the retail environment is becoming a consumer expectation. Companies ignoring the trend could be left behind very quickly.

According to research recently commissioned by Appnovation, 47% of consumers are expecting retail spaces to use gesture recognition, 59% are expecting advanced sensor recognition and 61% are expecting touchless technologies in the physical retail experience post-pandemic.

In that same research, it was found that as we move away from the conditions created by the pandemic, 51% of consumers want to see self-service kiosks in retail environments and 58% want to see self-checkouts.

This creates an amazing opportunity for retailers to unify consumer data between the digital and physical worlds when 38% of consumers plan on a mix of both online and in-person shopping in the future. Retailers who can take advantage of the opportunity will have an edge if they're able to create a seamless experience between their online and in-person retail touchpoints.

Creating a frictionless digital in-store experience

The inclusion of digital kiosks that mimic the online shopping experience and require less face-to-face interaction will become an advantage. They offer consumers the ability to have an uninterrupted connection between their online habits and their in-store experience. This will create a unique and personalized shopping experience that not only enriches their lives, but also allows the retailer to fully connect the online and in-store habits of their consumers.

The use of RFID scanners, beacons and trackers will create a virtual world within the retail space that will allow the for the creation of in-store personalization that, by some accounts, have been shown to increase sales by 15-20% when used in a similar online experience. The ability to personalize the experience based on movement, time on product and shopping patterns will give retailers an opportunity to develop rich shopping experiences designed to increase purchase propensity.

The additional use of augmented reality in a showroom environment will give consumers the ability to see the end result of the product's use in a more touchless way. This creates the opportunity for consumers to understand how they will live with a product rather than what it looks like in a showroom.

Meeting consumer expectations

Consumers want to know that retailers are taking their needs and desires into account. 83% of consumers either expected or hoped that retailers would adopt new digital solutions to deliver products/services, while 79% expected or hoped that retailers would enhance existing digital solutions to deliver products/services to more seamlessly.

This became even more relevant when we learned that 74% of consumers believe companies using touchless technologies are caring towards their customers.

And the expectation of caring goes even deeper than their own experience. 95% of consumers want to know that retailers care for the safety and wellbeing of their employees. The use of technology to create a more virtual and safe working environment helps the long term appreciation of the retailer's brand.

Unfortunately, the use of technology may widen gap between big box and smaller brands

We only need to look back to the shifts in consumer behavior to see the advantages that the larger e-commerce players have had in the technology arena. Companies like Amazon, with its scale and financial backing, have perfected the art of segmenting consumers at a granular level, driving a higher propensity of purchase.

Initially, as the use of technology in the retail space grows, the larger retailers that have the capital and infrastructure will have an advantage in their ability to make these changes faster and more pervasive than smaller retailers.

Fortunately, as with all technology, the cost of entry will decrease in the coming years as these enabling technologies become more commoditized and cheaper for smaller retailers who want to use them.

Closing the gap

The gap between the digital and retail space is closing, accelerated by the expectations created by the pandemic. Consumers have now set their expectations of a digitally driven world, as well as the desire to have a more automated and personalized in-store retail experience. By focusing on the use of advanced in-store technology and being empathetic to your consumers' needs, retailers have an opportunity to get ahead of the next wave of consumer behavior and connect the two worlds, digital and in-store, in a way we've never seen before. And, as always, the companies who get there first will be the most successful.

Scott Wassmer is GM of America at Appnovation

About Scott Wassmer

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