August 28, 2012
JC Penney’s CEO Ron Johnson is hedging his bets that among other innovations, in-store iPads and iPods will help make his new concept stores a hip place for customers to hang out. Ron is not alone in his mission; Macy's, Staples, Urban Outfitters, Home Depot, Wal-Mart, Target, Nordstrom, Neiman Marcus, Sephora, Clinique (the list goes on and on) are all in the process of piloting new in-store digital technologies.
However, “hip” is not a business case. In-store technologies must not only digitize existing experiences but, in doing so, must improve upon or completely re-invent them. As I see retail technology concepts like magic mirrors, virtual shelves, augmented reality displays, and touchscreen kiosks, I worry that retailers are getting swept away in the hysteria of the technology and are failing to articulate the value proposition that these technologies offer to the consumer.
Don’t get me wrong; many of these in-store digital experiences resonate well with the tech-savvy Gen Y shopper, but do they make the shopping experience more convenient?
Picture the scene: Mom has 20 minutes to spare on the way to pick up the kids from school, so by the time she’s found a parking spot, she has 10 minutes (at best) left to walk into the store, find what she is looking for, pay for it, and get out again without risking being late. Does she have any chance of meeting her SLA? Probably not, unless she knows exactly what aisle the product(s) she needs is in, whether the product(s) is in stock, and whether the checkout lines are empty.
So can digital experiences help mom? Perhaps, but this requires eBusiness and channel strategy professionals charged with conceptualizing and developing the business case for new in-store digital experiences to focus on the convenience factor. Concepts must pass a simple test: “Is this more convenient than the physical experience it supersedes?” For example, can an associate with a mobile POS device complete the sale (including the bag and tag and receipt printing) faster than walking the customer to physical checkout. Do in-app aisle maps and product locator tools really make it faster to find a product than referring to the department finder map next to every escalator or asking a member of staff?
I believe we are only at the start of this journey. Today, the investment in in-store digital experiences is often tied to the business case of the endless aisle (capturing lost sales through the sale of products from the online channel and other stores), but tomorrow retailers must focus on how and if in-store technology can remove friction and frustration from the experience of shopping in a brick-and-mortar store.
I’ll be talking about these ideas and the customers' SLA in much more depth in a presentation at our eBusiness & Channel Strategy Forum in Chicago on Thursday October 25. I hope to see you at this event — and in the meantime, I’d love to hear your thoughts on this topic in the comments below.