To compete for customers, retail stores must combine the assets of the brick-and-mortar and online channels

Today, we are hearing less and less of brick-and-mortar retailers being threatened by e-commerce. The idea of a connected store, which combines the advantages of traditional stores with the opportunities offered by digital channels, is gaining popularity. “Retail 360 / Connected Stores. Transforming store fleet through technology”, a report by Deloitte Digital proves that retailers must think ahead and operate through all channels, regardless of whether their product is ultimately sold in-store or via the Internet. Digital touchpoints make up as much as 56 cents in every dollar spent in-store by a customer while only a few years ago it was 36 cents. The future of commerce was discussed during the Katowice’s European Economic Congress in May 2018.

What are “connected stores”? It is a synergy of the unique qualities of online and traditional shopping. Today, e-commerce retailers, equipped with the latest technology, know about their customers much more than the brick-and-mortar sellers. And this will keep changing, says Olgierd Cygan, Deloitte Digital CE Leader. In-store retailers need to understand that to win the loyalty of shoppers one does not need sales and special offers, but a relationship built on the brand equity, he adds.

Blurring the borders

Deloitte experts indicate that these days the differences between the sellers and manufacturers are increasingly less discernible to the consumers. A customer who visits the website of a shoe or beauty product manufacturer expects that on the same site they will not only be able to browse products, but also to buy them. There are more and more companies that understand this mechanism and use its potential, says Olgierd Cygan.

As much as 90 percent of global retail sales is through brick-and-mortar stores. However, to fight off the competition from customer-friendly online stores, which can offer a vast array of products, one needs to rely on customer experience and brand commitment.

Traditional retailers must realise that the customer’s relationship with the brand does not begin when they enter the store and does not end when they leave. Deloitte’s report list the stages of the customer journey. These are: making the customer aware of the need to have a certain product or service, looking for information about the seller, fulfilment, i.e. the purchase, feeling of satisfaction and sharing their experience with others.

Digital touchpoints make up as much as 56 cents in every dollar spent in-store by a customer. Only a few years ago it was 36 cents. Those who shop via various channels spend over twice as much as those who shop only in-store. This means that retailers must think carefully ahead and operate through all channels, regardless of whether their product is ultimately sold in-store or via the Internet, says Olgierd Cygan.

Various operating models

Deloitte experts believe that in future the stores which will achieve the greatest success will be the so-called sensory playgrounds which will be able to satisfy all customers’ needs. On the other end of the scale will be the sellers concerned only with transactions without any regard to the needs of their consumers.

One of the ideas gaining in importance in commerce will be the use of stores as distribution centres. This will help cut costs and the delivery times. This solution has been recently applied by eobuwie.pl, which opened up an innovative store in Wrocław, where customers use laptops to select shoes which are delivered by sellers within three minutes of the order.

Key technology

The operation of a modern store is not and will not be possible without the technology. Deloitte’s report specifies four technological trends which will have a considerable impact on commerce: biometrics, AI, Internet of Things and computer vision. With computer vision, retailers get real-time feedback about the needs and behaviour of their customers through images and videos. Traditional sales were never heavily dependent on technology. This, however, has changed. Sellers must understand that the role of technology will increase not only in their relationships with customers, but also in their management of their business, says Olgierd Cygan.

Does this mean that in some time shop assistants will be replaced by robots? Deloitte experts believe that this will not be the case. People still want to interact with others and technology is there only to help them and improve cost efficiency.