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Reinventing Retail

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It's hard to believe that 15 years have passed since Amazon launched as an online bookstore. Back then, e-commerce was largely modeled on the brick-and-mortar experience, but now the reverse is beginning to happen. Retailers, however, have been slow to adopt digital technologies in-store, resulting in antiquated and sometimes frustrating shopping experiences.

Online shopping is surpassing in-store shopping for many customers, offering additional benefits like convenience, price comparison, customer reviews and, more recently, social shopping. As customers begin to expect the same from their in-store shopping experience, retailers are trying to resurrect brick-and-mortar environments to bring shoppers back. What will save these stores? Revamping them with digital technologies that integrate the best practices from e-commerce while elevating the qualities that only a physical shopping experience can provide.

One area of particular interest for retailers and brands is mobile. According to the Motorola Global Holiday Shopper Study, more than 50 percent of consumers used their mobile phones while in stores this past holiday season to perform tasks from the basic, like calling or texting a friend, to the advanced, like accessing the Internet for product information. In response, retailers and brands are finding new ways to increase sales by leveraging mobile phones. For example, they've created in-store mobile marketing strategies devised to inform purchase decisions while customers browse store aisles. As an added benefit, these campaigns serve as a powerful tool for determining ROI, since they provide useful information like sales conversion.

Retailers are also turning to digital technologies to transform physical retail environments into dynamic, entertaining and informative shopping experiences.

These new technologies can also increase retailers' operational efficiencies, saving time and money, especially through networking back-end and consumer-facing displays. In addition, they provide a wealth of data, which can offer a precise and valuable look at consumer-shopping behaviors.

Consider this: a big-box retailer that installs interactive displays throughout its stores can help customers choose the right product or service even when a sales rep is not available. By providing information like product/service descriptions, user reviews and demonstration videos, interactive displays become effective tools. The retailer not only satisfies the customer, but also gets to see all the options the customer considered, learns which information was most useful and what the final purchasing decision was. In addition, these displays increase the retailer's operational efficiencies, since their content can be updated in real time with the latest information, including price alterations, promotions and new features, from a central hub stationed anywhere in the world.

Digital signage is another way retailers communicate with customers. Until recently, a wall of LCD screens showing looped promotional videos was the extent to which most retailers made forays into digital signage. However, there are emerging opportunities for spotlighting products and providing information to shoppers at the point of decision.

Walmart, for instance, created the Walmart Smart Network, a program that uses digital signage to communicate the most relevant content to shoppers by store, screen, day and time. With screens located throughout its stores, Walmart is able to promote products in the aisles where such promotions matter most: e.g., touting a specific brand of makeup in the cosmetics aisle. Better yet, Walmart is able to centrally control and customize the content on tens of thousands of screens throughout its U.S. stores, improving the customer-shopping experience and driving results for its suppliers.

Wayfinding technology is also growing in popularity and enables retailers to help a customer locate merchandise quickly-a useful tool for superstores. Another tool is the touch-screen queue display: by sending a text message when a sales rep is available, it eliminates the long lines that customers often stand in. Similarly, Apple has converted its iPod Touch devices into scanners that accept credit-card payments, allowing sales reps to scan purchases anywhere in a store.

Last year, the Stop & Shop supermarket chain took this idea a step further by implementing a mobile handheld device for customers so they can personally scan and bag products as they shop. The scanners are linked to a loyalty program that provides shoppers with coupons and promotions based on purchasing histories.

The potential of digital retail is just beginning to be realized. Digital brought the online and then the mobile revolutions; now it's driving the retail revolution. These advancements are just some of the technologies transforming brick-and-mortar spaces. In the near future, they, along with others, will be seamlessly and expertly embedded into retail environments, creating an unparalleled shopping experience that puts the customer first.

Bob Greenberg is chairman, CEO and global CCO of R/GA.

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