Interactive Shopping

One of the critically overlooked corners of marketing is the entire retail experience. As technology revolutionizes the way goods and ser- vices are marketed and sold, retailing is undergoing a transformation similar to the one happening in advertising and marketing overall. This transformation revolves around integration of the inbound customer experience in ways that create differentiation by serving the range of customer needs throughout the purchase cycle. R/GA counts four great retail brands among our clients—Bed Bath & Beyond, Circuit City, Lowe’s and Target—and in thinking about their businesses, we’ve hit upon some insights that we believe pertain to all marketers.

Retailing has evolved dramatically in the past 20 years, and particularly in the last five. What began as brick-and-mortar experiences was augmented by call centers in the 1970s and 1980s with the advent of mail order and catalog retailing. The 1990s saw the invention of electronic commerce on the Web. But it’s been in the past five years that e-commerce has come into its own as a legitimate, highly valued channel that plays a far broader role than generating a percentage of sales online. The combination of brick-and-mortar stores, call centers and Web sites encompasses the inbound multichannel customer experience of retailing. Whoever can truly integrate all three of these—as well as new, evolving platforms like m-commerce (mobile commerce)—stands to gain the upper hand of differentiation in these changing times.

So, what’s the challenge? For products of medium to high interest and consideration—cars, travel, electronics, home furnishings, financial services and telecommunications services—the dominant behavior is to research online and purchase offline. Yet the minute buyers enter stores, they become untethered from the wealth of information available on the computer. A key part of the multichannel customer experience is determining how best to reintegrate the research tools of the Web with the “kick the tires” experience of brick-and-mortar shopping.

This turns out to be quite a big challenge indeed. Retailers with more than 1,000 store locations find it both difficult and expensive to implement in-store technologies (e.g., kiosks) that offer the power of the Web. But help is on the way. It is becoming increasingly apparent that the mobile phone is the device to bridge the multichannel retail customer experience.

We are also fortunate to count among our clients Verizon Wireless—the first mobile provider to offer 3G wireless service in the U.S. The service, called “VCast,” is essentially the equivalent of a broadband Internet connection delivered to the phone. It supports full-motion video (just like the broadband Web), as well as rapid retrieval of text and Web pages in the WAP format. Having broadband in your pocket is just as empowering as having it on your desktop but in new and different ways. Imagine standing in an aisle of barbecue grills at Lowe’s and wanting more information—like customer reviews—before making your decision. The promise of mobile technology is that, in the not-too-distant future, this information will be as quick and easy to access as it would be at home on a PC. 3G solves the speed barrier. Getting to ease of use will require good information design.

One technology we’ve been tracking at R/GA is called “Quick Response codes,” or “QR codes.” QR was developed in Japan as an evolution of bar codes. They are square in shape, and each can embed several hundred characters’ worth of information. But the amazing thing about QR codes is that mobile phones can read them through the built-in cameras that are now almost a standard feature in all new phones. By putting QR codes on packaging and product displays, we can instantaneously connect consumers to on-demand information, solving the ease problem of mobile content.

QR was first implemented by Japan’s NTT DoCoMo, and now QR codes are popping up all over Japan—including on outdoor ads (see the movie poster, watch the trailer on your phone with a click of the camera shutter). When it comes to connecting marketing messages to content on demand, QR is not the only game in town. Similar solutions exist using SMS/MMS, Bluetooth and infrared. The point is that we are on the cusp of solving problems of speed and ease of use that will drive adoption of mobile content on demand.

And that’s good news for retailers, enabling them to complete one piece of the puzzle of multichannel marketing. It will allow them to connect the Web experience to the store experience through devices customers already own and love to use, rather than through an expensive deployment of kiosks, touch screens or noninteractive video loops running on TV monitors.

The key for retailers, and for many other multichannel marketers, is how to organize themselves internally to manage this new integration of inbound touchpoints. It points to the need for a new kind of executive—the chief experience officer—who in some cases may even replace the chief marketing officer. That will be the subject of next month’s article on client reorganization and how marketers need to align themselves with the ever-changing marketing landscape.