How Digitization Is Changing Trade
For a long time, digitisation appeared to be the main threat to the stationary retail trade. But current studies show that this is not the case: The retail shop has a future – if operators learn from the success of online trading.
Saturday afternoon in the shoe shop in the city centre: the salesman is as competent as he is friendly. He immediately has an elegant “business lace-up” ready, but the shoe is a bit too small. “No problem”, says the salesman, “according to the computer we also have the model in size 44 in stock”. But the shoe can’t be found, neither on the shelf nor in the warehouse – apparently someone sorted it wrong. The customer gets angry, the turnover is lost and the salesman is annoyed. The scenario shows an exemplary problem of stationary retail that can be solved with the use of digital technologies.
Retail under pressure
Although the German Retail Association (Handelsverband Deutschland, HDE) anticipates a slight nominal growth in retail sales of two percent in 2017, according to HDE online retailing remains the biggest growth driver. And the GFK market researchers assume in an e-commerce study that the share of online trade will rise to 15 percent by 2025, and even to 25 percent in the non-food sector.
Although the German Retail Association (Handelsverband Deutschland, HDE) expects a slight nominal growth in retail sales of two percent in 2017, the biggest growth driver, according to HDE, will remain online retailing. And the GFK market researchers assume in an e-commerce study that the share of online trade will rise to 15 percent by 2025, and even to 25 percent in the non-food sector.
After all, retail outlets have some undeniable advantages over mail order. In addition to “instant gratification”, i.e. the immediate feeling of happiness to hold the goods in one’s hand, these include above all the haptic experience of trying them on and off. The challenge now is to enrich these benefits with the benefits of digital technologies that help potential buyers find, try and pay for the product they are looking for in the store faster and easier.
Experiences with online shopping have changed customers forever: They are used to receiving an almost endless selection, numerous detailed information about the product, clear statements about availability or delivery dates and personalized suggestions with suitable additions or alternatives to a selected product.
No wonder, then, when almost 90 percent of consumers assume that most businesses will offer digital services in the future. This is the result of the current study “The Future of Shopping” by Comarch and Cantar TNS.
Digital technology in the shop
A visit to Alexander Black, a concept store set up by network and IT service provider BT at its research centre in Adastral Park, shows how digital technology can revitalise a classic shop. Here visitors can try on clothes and have themselves filmed as they walk down the catwalk, and then assess the external impact of the new outfit themselves on a large screen or ask friends for their opinion via social media platforms.
When the potential buyer places a product on a counter with an integrated touch-screen display, he automatically receives a wealth of information about it – from its origin to the materials used, the colours available and care instructions. And, as with Amazon, recommendations: This product also goes well with that one.
The example of Milan
A pilot project at Gallerie Commerciali Italia proves that digitisation in stores goes beyond concept studies. BT has implemented a combination of infrastructure services, customer relationship management (CRM) and in-store solutions in three shopping malls in the Milan metropolitan area for the operator of more than 40 shopping centres and specialty retail centres, in order to increase the attractiveness of stationary retail and open up new business opportunities for retailers.
A mobile app developed in-house offers various services: Customers can more easily find their car in the multi-storey car park with the “Car Locator”, vote on music to be played in the shopping centre and receive personalised vouchers.
But that’s not all: the project also includes interactive promotion systems that not only appeal to customers audiovisually, but also through their sense of smell. The display columns, which are located at several points in the shopping center, recognize the sex and age of the customer via camera and can display corresponding offers.
For example, the lady sees a handbag from the current collection, and the promo column exudes a discreet leather scent; the matching perfume smells of roses. The cheeseburger, on the other hand, which is displayed to the hungry teenager, smells deliciously of bacon.
WLAN and Beacons
In addition to the WLAN infrastructure, which can be used free of charge by visitors, cameras and beacons were installed so that the operator of the shopping mall can see where many customers are, which routes they take, which shop windows they spend a long time in front of and which they only spend a short time in front of. With this information, it is possible to work specifically on further improving the attractiveness of the center.