The strategy behind Target's digital transformation

As the lines between online and the physical store continue to blur, the future is the digital store, typified by Target's successful digital, in-store strategy.

Last spring the retailer designated mobile as "the front door" to Target, Josh Marti, CEO of Point Inside told FierceRetailIT. "Target's digital platform has improved operations by providing shoppers with useful real-time information."

For example, shoppers can search for items available in their local store as well as view the aisle and shelf location—reducing the number of questions they ask store associates. "Shoppers can create shopping lists in Target's mobile app while planning their shopping trips at home or on the go. When they open the app in-store, they can easily view and find the location of all the items their list," Marti said.

                 Target mobile app's shopping list and map features

"Shoppers can also check ahead of time to see if their local store has the item they need in stock to avoid the frustration of making a trip to Target for a sweatshirt that sold out yesterday."

Target and Lowe's have embraced the transformation to digital maturity, Marti said. To make the seamless connection between online and physical stores, merchants need to follow the four stages set forth in a recent report from Forrester Research, "The Future of the Digital Store."

"Given the digital transformation taking place today in retail, the four key stages along the path to digital maturity are essential to the future success and competitive advantage for retailers. Deloitte Digital predicts that digital will influence 64 cents of every dollar spent in retail stores—or $2.2 trillion—in 2015, and also predicts that number to continue to rise," Marti said.

The following four stages of digital evolution build on each other:

Invest in technology to connect enterprise systems across all touchpoints. This is foundational and the most important stage, he said. "Without a strong foundation, other strategies, such as omnichannel fulfillment, beacon deployment and product location, can't be executed effectively to meet the needs of the customer and the retailer."

Add capabilities that create operational efficiencies. Building from the strong digital index of the store created in the first stage, the retailer can go on to automate administrative tasks, and enhance mobile tools to inform store associates of product locations and inventory in the store. "In most retailers, shoppers are walking in with more information than the store associate, and this is problematic. By giving store associates as much, or more, information than the shoppers have, retailers can increase their ROI by improving associate productivity and efficiency," Marti said.

Turn in-store behavioral data into insights in real-time. "During this phase, a retailer will leverage customer data across the entire shopper journey to generate an anonymous view of shopper behavior. These insights can also be used to personalize the shopping experience for shoppers, analyze robust store performance analytics, as well as optimize the retailer's planning, merchandising, and marketing efforts," he said.

Transform the store to provide contextual and relevant experiences for the customer. "This is when a retailer focuses on improving the customer experience by integrating additional information into the digital platform—such as a shopper's browsing and search behavior, shopper location within the store, items from their shopping list and more—to deliver personalized search results, deals and recommendations," Marti said.

"Retailers who embrace this transformation and move through the four stages of digital evolution will thrive; those who do not will be left behind. The most successful retailers will keep a sharp focus on improving the experience for the shopper, because at the end of the day, it's all about the shopper, not about how much new technology you can implement in-store." 

In summary, Marti shared the dual benefits of omichannel initiatives. "It's an exciting time for both shoppers and retailers alike. Shoppers will benefit from a more personalized and relevant experience in-store. Retailers will have access to an unprecedented amount of data, enabling them to understand shopper behavior in-store as they do for the Web."

For more:
-See this Point Inside press release
-See this Forrester report
-See this Deloitte study

Related stories:
Target digital sales rise 30%
Target testing beacons in 50 stores
Target makes $1B bet on digital
Target digital VP Alan Wizemann resigns
Digital to influence 64 cents of every retail dollar spent in physical stores