Who is the connected consumer?

With a constant connection to the web and social media via a smart mobile device, the connected consumer is an informed shopper actively seeking the best value for a desired good.

With their own personal audience via the web and social media, they are an empowered group with a desire to feel appreciated by a retailer and in control.

What does this mean for retailers?

The connected consumer is a new challenge for retailers as power has shifted from the company to the consumer. With demands for a relevant, efficient and consistent experience for his/her own personal interests, and control over the conversation, retailers must provide the connected consumer a great shopping experience while merging both digital and in-store channels.

The consumer is engaged through digital technology before ever stepping foot in a store or looking at a catalog. It is possible that the first engagement isn’t facilitated by a retailer at all, but by a friend on social media. For this reason, marketers must have a strong digital strategy that enables consumer engagement across multiple channels and allows for a personalized interaction. Retailers should connect with consumers through various tactics such as emails, social media and in-store engagement while maintaining consistent brand identity and messaging.

To do this, retailers must understand the change in 1) how a customer shops, 2) how a customer makes in-store decisions, and 3) what the expectations of their customers are. The retailers must then develop a customized and distinct response to these questions as their digital strategy, and as a platform for merchandising.  

How does this relate to brick-and-mortar stores?

Merchandising for the connected consumerThe in-store experience is still a powerful aspect of the buyers’ journey even though the digital entity of retail has become fundamental to the entire consumer experience. To best serve the connected consumer while creating store traffic and greater brand loyalty, the in-store experience should act in unison with the retailers’ digital strategy.  

Knowing that the connected consumer utilizes technology to efficiently gain information and make a purchase decision, a sales associate no longer convinces a customer of a purchase. In fact, research shows that customers would rather use their own device followed by an unmanned device like a kiosk or tablet, before speaking to a sales associate to gather information in-stores¹. Thus, retailers should incorporate digital entities with the brick-and-mortar, or rather create an in-store shopping experience that utilizes technology and enables the consumer to stay connected.

The following are a few possible ways retailers can merchandize to the connected consumer in-stores:

Offer free in-store wifi

The consumer can stay connected while shopping.

A retailer has the opportunity to direct the consumer to the store website and current sales or product information after log in.

Utilize interactive kiosks and tablets

The consumer has access to a greater variety of products with expanded online inventory, and vast product information and reviews.

A retailer has greater advertising space with interchangeable digital displays specified to a department and the time of day while providing easy access to store information, online ordering, product information, and faster more efficient checkouts.  

Incorporate beacon technology, a low-cost device utilizing a Bluetooth signal to directly communicate with a customer’s smartphone.

The consumer can receive personalized and targeted notifications for specified products and departments based on their current store location.

A retailer can communicate loyalty programs, payments and current advertisements in real time to a customer.

¹ “The New Digital Divide” by Deloitte Digital (2014).
 

Millennials controlling 70% of the spending power in the U.S. creates vast uncertainty amongst retailers; but with the strongest economy in years, optimism prevails as we begin 2015.

For many retailers, the Millennial consumer is an enigma: they are more suspicious of who to trust and yet, more likely to be influenced by apps and social media than any other generation. Only 19% of Millennials (versus 40% of Baby Boomers) say that, “generally speaking, most people can be trusted” (PewResearch). However, in order to make buying decisions, consumers look to a retailer’s online presence and social influence before considering a purchase.

This generation’s spending habits are moved by its self-paradox. Millennials are self-focused and at the center of their own global communications. It is vital for them to have a positive self-image while finding a sense of belonging when purchasing consumer goods. They desire self-preservation and a personal connection to a product or service.

So, what does this mean for retailers?

The heightened competition amongst store fronts and e-commerce will increase. Currently, roughly ¾ of consumers claim to showroom (Retail Future Trends 2015) or rather compare brands in order to receive the lowest price, best quality and/or widest selection of merchandise when shopping—many times without ever stepping foot in a store. This creates less in-store traffic and increased wavering among dominant brands. So, retailers must draw their target markets in through a strong online presence while providing feelings of exclusivity and individuality for a reasonable price.

To draw consumers into their store fronts, many retailers have begun incorporating various electronic capabilities; this includes the use of tablets, interactive kiosks and beacon technology. Tablets and interactive kiosks extend inventory past what can be offered in stores. The use of tablets has expanded into the retail environment to replace paper signage with digital advertising while providing sales associates quick and easy access to inventory, online ordering, product information and faster checkouts. Interactive Kiosks act in a similar way – allowing for added promotions through electronic ads specified to a department and the time of day. They also enable retailers to connect with consumers by blending in-store merchandising and virtual product displays. Beacon technology, on the other hand, provides the retailer with direct communication to the consumer and has the potential to completely change the in-store shopping experience by creating personalized and targeted marketing in real time. A beacon uses a Bluetooth signal to send special offers to nearby smartphones equipped with the store’s app. App users will receive targeted messages and deals while moving throughout the store.

Let’s say you’re shopping at a retailer equipped with these devices and have previously downloaded the store’s app. As you walk through the doors, your phone buzzes with an exclusive storewide discount. You wander into the home goods department and begin looking for a new blender when your phone alerts you of a sale on KitchenAid products. You can’t pass up the sale price and find the specified blender but are not happy with the color selections available in store. Scanning the product’s barcode at a nearby kiosk, you find additional product specifications, customer reviews and available colors. The color you’d like is available only online. No need to worry. Once your shopping is complete, you bring all of your selections to the nearby associate. They ring you up on their iPad and include the desired blender and ship it directly to your home.

As many stores have already begun implementing this technology, this experience won’t be a thing of the future for long. In fact, Macy’s has added 4,000 iBeacon devices nation-wide and provides coupons via this technology to customers who have downloaded ShopKick. They have also begun testing smart dressing rooms and an image search app. The smart dressing rooms have a wall-mounted tablet that allows customers to view various sizes and colors of a product while the image search app allows customers to snap a photo of an outfit or clothing item to find similar items on sale.

With these exciting advancements in technology, 2015 will be a year to watch how the in-store experience changes to accommodate the self-regarding Millennial. While it is clear that tech-enhanced stores offer an enriched shopper experience with benefits like improved productivity, inventory counts and use of store square footage, we have yet to determine exactly how to incorporate this technology so that it is most useful to each individual without overwhelming them.

Having spent over twenty five years guiding retailers and brands into self-service solutions, it has been fun to reflect at the various industry events this winter on how we got to this multi-screen Modus operandi, which is fast becoming second nature. We’ve witnessed the evolution of desktop to kiosk, kiosk to mobile and digital signage to mobile. Consumers move freely among devices in planned and impulsive ways.

At the same time we’re experiencing this technology evolution; we’re also encountering a broadening of the applications for self-service.  We think this trend offers new opportunities for forward-thinking retailers, so there’s not much time for looking back.

A major self-service at retail theme is the enabling of shoppers to explore endless aisles and access the breadth of what the retailer has to offer. These are engagement solutions that empower customers in the store like shopping kiosks, gift registry kiosks, and interactive digital signage with expanded inventory visibility for categories from jewelry to shoes. They are all very intuitive uses for in-store self-service.

A second intriguing theme involves offering ancillary services that are a draw to busy, connected consumers. By providing frictionless ways for customers to accomplish life’s pleasurable and mundane tasks, self-service offerings can solidify the store as a destination and even encourage repeat visits. We think this aspect of self-service lends itself to some imaginative applications.

Here are three examples of how self-service can expand access, enable perpetual connection, and eliminate speed bumps for consumers:

Some big box retailers and pharmacies are recognizing the value of self-service health assessment like that offered by the SoloHealth Station® as a strategy for increasing footfall and sales. The value of certain Lifestyle types of screening, like weight and blood pressure is continuity, which plays right into traffic-building and loyalty-building objectives. Interactive, self-service kiosks are ideally suited to deliver targeted messages about Lifestyle brands in the store that have relevance to the assessments individuals are experiencing and can promote healthful living and incremental sales.

With the increased acceptance of the phone as a shopping assistant, there’s a realization that phone charging can be a real draw in most any retail setting. Consumers first encountered mobile charging stations like the Keo Connect charging and concierge kiosk in airports. Phone charging displays can come in many formats and their value can be extended when coupled with consumer information services, promotional programs, and advertising messages.

Retailers should also consider the traffic-building aspects of providing access to commonly used services. One of the early examples of this concept was self-service photo kiosks like the ones we produced for Sony and others. More recently we designed and produced a DMV in a Box kiosk for Intellectual Technology, Inc. that was placed in motor vehicle branches across the United States. It is not a stretch to think of partnerships that would place other kinds of convenient services in the retail environment.

Consumers form relationships with retailers that meet their needs and expectations in consistent and satisfying ways. Self-service has a role to play in helping stores with doors, deliver on that proposition not only for shopping – which we hope is mainly a pleasurable activity - but for services that make the store a logical and convenient destination to accomplish some of the mundane tasks that keep us all moving forward.

The ultimate test for the execution of self-service is being secured at retail presently. The connected consumers have made themselves heard and the majority of successful retailers are experimenting with ways to reduce their legacy silos, into Omni-channel solutions to offer their loyal consumers convenience, selection, and service when they want it, where they want it, the way they want it! In return retailers are finding consumers with a renewed exuberance for loyalty, bordering on evangelism for the retail brand!