This is the original version of an article that was published by Internet Retailing and was written in response to a brief that asked me to consider how digital techniques could help merchandise products and services in physical stores. 

Introduction

For multi-channel retailers customer facing products and services have historically existed in two separate worlds. Either in real-life in high-street stores, or virtually via catalogues and, more recently, e-commerce platforms.

The accepted wisdom is that there are distinct advantages to merchandising and marketing products in each channel. Traditional stores allow physical products to be attractively presented, curated, touched and tried out, while services in the same environments can be discussed and explained face to face with knowledgeable staff.

The same products and services online can’t be touched or very easily inspected, but they are much easier to sort, compare and to combine. Online merchandising, whilst not being very tactile or emotive, allows for endless pages of infinite combinations and for increased relevance through data driven personalisation.

It would seem then that each channel is destined to present products in its own distinct way. As such, efforts to bring the online products into the in-store environment have historically focussed on offering customers access to the standard e-commerce site via in-situ kiosks, PCs or staff tablets.

This approach can’t really be called ‘integrated’. What happens when you make the standard e-commerce interface and products available in-store is more akin to a ‘co-habitation’ of channels – they are running in parallel rather than in unison. While this approach isn’t bad, per se, I believe that there is much more value that more innovative integration of digital can bring to the merchandising of products in store.

In this piece I will consider three areas that I consider to be fertile ground for meaningful digital merchandising and activation of products within real-world environments. These are;

• Bringing the social web into the store to help better present products and services through recommendation and relevance.

• Taking the digital search, discovery and filtering techniques from the web and applying them in-store to facilitate the purchase of complex products and/or identification of items from within an expansive range.

• The mechanics that will allow seamless transitions between physical and digital spaces, including search and NFC

Bringing the social web into the store

The idea of bringing the power of the social web to bear on real-world in-store products is not new. Early last year Nordstrom wanted to integrate the feedback that they were getting from their sizable Pinterest community, and began placing Pinterest’s “P” logo next to the most pinned products in its US stores. In a similar vein, back in 2012 product ‘Likes’ on C&A Brazil’s online store were reflected on screens embedded in clothes hangers in the shop’s physical racks. While both of these concepts probably got more coverage in trend reports that actual consumer interactions (and neither were easily scalable) they did show that real meaning could be gleaned from reflecting online product popularity in-store.

A more practical application has been demonstrated by Revoo, a company that has built its business around the value of social recommendation to conversion. Their online reviews have been brought into physical retail in a number of stores through printed reviews backed up woth QR codes, allowing shoppers to get instant access to up to date ratings via smartphones.

The power of recommendation is even greater when the recommender is relevant. Retail technology start-up Mogul Labs has recongised that the most relevant recommender is probably you. Their twitter tool goes through your past tweets analysing keywords and then serves up products and services that match your social ‘personality’. They are currently in talks with a big high-street name to bring this social product matching in-store.

Digital discovery techniques in store

One of the key benefits of shopping online is the ease with which customers can search and sift through available products and services. Of course, consumers are already bringing the power of web search and discovery techniques in-store through show-rooming on their own devices. The received wisdom is that this price and product transparency is bad news for the high-street – but there are an increasing number of high-street retailers that are creating store specific web tools to bring together the benefits of digital discovery and the immediacy of on the stop purchase. This ‘post show-rooming’ approach embraces digital product discovery and search and can bring benefits to both shoppers and staff.

Carphone Warehouse, for example, has recently provided staff at its 780 high-street stores with tablets that feature a bespoke app called Pinpoint. The software crunches data on deals, tariffs, handsets and average usage and is used by staff to help consumers make an informed purchase from what is a complex and fast changing service and product range.

As part of the Next Generation Store that 20.20 worked on with TUI last year, we combined digital product discovery and social recommendation on customer facing touchscreens. The ‘Browse Holiday’ feature in Thomson’s stores allows users to find products by moving sliders and tapping buttons, taking them from thousands of potential matches to a handful of relevant options in seconds. The experience, built on a locally stored version of the product catalogue, is much faster and responsive that using the standard e-commerce interface. However, one of the customers’ favourite features remains the Tripadvisor data feed that places its ratings alongside each hotel listing. In further phases there is also talk of bringing in ratings from actual store customers to further increase relevance.

Going forward there is great scope for digitally enhanced product and service search in-store. This is especially relevant in a large store, for complicated services options, or perhaps a small-format stores with a large online range. As a Single Customer View and integration of online and offline stock and delivery become more sophisticated, being able to search the online catalogue, or order from an online catalogue and pick-up product in-store is going to become increasingly commonplace. Businesses that offer enhanced and experience rich search and discover services in-store (rather than just dropping in the website) are going to be at a distinct advantage in a world of increasingly connected shoppers and demanding digital natives.

Bridging the gap between the digital and the real

Leveraging all this web and social content in-store to help market products and services does require methods to bridge between the two channels. Moving from products themselves to digital experiences is perhaps the hardest nut to crack. Ugly and fiddly QR codes are probably not going to be the answer longer term and NFC, while theoretically perfect for digitally activating and integrating OOH, and point of sale and EPOS seems a way off in terms of universal adoption. Those retailers with apps are at an advantage because with these QR and barcode scanning is easily integrated into users’ phones. John Lewis has had in-store product scanning for a while, and others like Ikea are also integrating this feature into their mobile apps.

In my opinion, one of the biggest untapped marketing and CRM opportunities for retail and leisure businesses remains in-store wifi. The basic infrastructure is in place (i.e. Wifi networks, consumer’s smartphones) so retail operations can easily use this localised communications channel to open up another layer of POS comms. While product scanning won’t work via wifi – product promotion, shelf location and shopping lists are all possible over in-store networks. Retailers are still being slow to latch onto wifi as support channel for stores, but Heathrow is one example of an early adopter, making retail product offers and store way-finding available to any users logging onto their public wifi.

The second area of immediate online-to-offline integration opportunity is product search – especially where it has clear local intent. In these scenarios, users are in fact performing pre-store product searches. Channelling this online search traffic to stores – by showing real-time product stock information, pricing and opening times, and enabling simple click-and-reserve as well as click-and-collect via mobile, has only really been embraced to date by a handful of companies in the UK. Argos and Maplin are both good examples of what an integrated approach to retail and e-commerce channels can achieve.

Creating such seamless integration between online search, footfall and purchase on the high-street is not just a question of technical advances, it also requires thinking from a shopper’s point of view and joining the dots across your retail channels. As ever, technology is just a tool – understanding the customer must come first.