Mobile, sensors, analytics transform in-store shopping

Smartphones and new digital solutions are key to integrating technology into the physical store. Advances in mobile devices, sensor-based technologies and data analytics will transform the shopping experience soon rather than later.

Wireless connectivity, cloud computing, mobile applications and data analytics have transformed the shopping ecosystem, according to PwC. Future trends will focus on smaller, personal technologies such as smartphones, and smartphones combined with connected sensor devices, to change the ways consumers shop as well as how retail and consumer companies interact with shoppers.

This in turn is changing the investments retailers should be making in their stores. "The rapid adoption and usage of smartphones makes a capital expenditure-light approach imperative," Matt Egol, partner, digital services at PwC, told FierceRetailIT. "This makes a business case for kiosks, smart carts, video screens, and other capital intensive investments that require space, power source and dollars, more challenging."

In-store merchandising can be an on-ramp to mobile engagement. "This is often search driven versus scanning a code. Merchandising can provide a call to action that enables the establishment of a mobile relationship," Egol said.

For example, retailers have opportunity to personalize the shopping experience by better connecting pre-store experience to in-store experience. This requires the creation of a single view of the user with mobile as a pervasive identification, he said. "Technology also enables retailers to recognize a shopper who's coming into the store and further tailor the shopping experience based on that shopper's most recent activity, as well as 'next best content' optimization from analysis of similar shoppers, using a 'test and learn' approach."

New technologies also should be leveraged for more efficient operations functions, including backroom inventory management and task management on the floor, said Christopher Perrigo, partner, technology services at Strategy&, the strategy consulting team within PwC. These can now be seamlessly integrated into the customer shopping experience.

"Traditional imperatives in-store still exist, like the speed of the point-of-sale process, for example," he said. Retailers need to expect to use new technologies to get even better on these fronts.

Personal technologies and data analytics will play a major role as retailers embrace the Internet of Things in-store, Egol said. "Analytics is part of a broader shift to data-driven marketing that also taps into mobile, social and the cloud. Analytics needs to address both driving higher conversion and building a stronger emotional connection. One without the other is like one hand clapping. It should take a lean, start-up approach to drive rapid feedback and an ongoing 'test and learn' model to iterate over multiple releases," he said.

Analytics can be leveraged to optimize engagement in content—not just paid media. "Next-best content analytics can help optimize assortment, offers and how-to content. Content can be optimized across a broad set of touchpoints," he said.

The IoT creates new sources of data about the individual, as well as interactions with the retail environment. "Wearables are one source of IoT data. So are RFID tags in the store that enable interactions with individuals' phones as well as tracking of movements around the store," Egol said.

"IoT enables the piecing together of different interactions onto one platform to integrate analytics across the shopping experience. IoT and RFID will also enable new approaches to inventory management and replenishment, and the customer experience," Perrigo said.

In many cases, sensors are the key to implementing the IoT in-store. "As sensors become cheaper and more prevalent in our surroundings, customers will grow more accustomed to personalized experiences," wrote Scott Bauer, PwC's U.S. retail & consumer partner, in the company's Emerging Technology blog.

"Now is the time for retailers to explore how to use sensors to enhance the shopping experience. If they don't, they could potentially miss out on a great opportunity to leverage their physical spaces to lock in customer loyalty," he said.

For more:
-See this PwC blog post
-See this PwC newsletter article

Related stories:
Target's transformation roadmap makes mobile the front door
Kroger charts path to digital transformation
Target gets serious about its digital transformation
RFID use reaching 'tipping point'
Retail digital signage to lead IoT growth of 19% this year

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