IE At Magento Live Australia: The Physical Store & Magento

When I was 19 I was involved in a serious car accident. It forced me to switch careers from one I’d fallen in to, hospitality, to one I was interested in, multimedia. This was a blossoming field, and CD-Roms were still cutting edge. But with websites I saw an opportunity to be involved in the future, and it excited the hell out of me.

I didn’t own a computer, I didn’t have the faintest idea how to do much other than type in a word document but I knew this was an opportunity that I wanted to pursue.

Fast-forward, and I’ve been in the industry for 16 years, and a lot has changed in that time. It’s been fun, heart breaking and given me more anxiety than I’d wish upon anyone. But it was beginning to seem a bit same old; I was missing the spark of innovation that had got me in to the industry in the first place. But then I was given a new challenge that awoke that same passion to chase after something that was new and unproven.

This opportunity was to design a digital interaction within a physical store. Not in the crappy “take a photo of yourself in a store and post it to social media” digital in-store solution. Rather, to create something that would attract and convert shoppers to customers by taking what we had learned in creating e-commerce sites, and applying it to the real world and to make in store shopping experience better.

The opportunity was with Nike Skateboarding.

The challenge was to create an experience that looked like the store shoe wall design we’d been supplied, and to create an experience that would lift Nike above their competitors in a multi-brand retail environment. We had all sorts of crazy ideas, but at the core of them all was the question: what was going to make sense to the customer? Why would they use this, and how would it deliver to them what they needed to feel empowered to complete their purchase?

We set about doing this in the same way as a lot of the mobile development we’d been doing for the travel industry. With a strong consideration for the part of the journey that a customer was in, and defining interfaces that would match their needs in that part of their journey.

Getting the solution to work was hard work, I was researching across the globe, building prototypes, driving around town to find the right RFID cards for our readers, and having more issues with systems than I’d had in years, and I was loving it.

The easy part was the integration in to Magento for content management, pushing content out to screens in stores across Australia and New Zealand. This allowed us to do seasonal content changes easily and push them to all stores to keep things fresh and on brand.

The biggest lessons – customers loved it, and the use of the technology drove category sales up in every store. However, because prototype technology is prone to unforeseen issues, wireless networks and iPads were our biggest pain points from a technical perspective. Staff training and not factoring in continual enhancements to the system, once we learned from customer and staff feedback, also overshadowed these technical issues. Change management is all about the people; the best software in the world is worthless if nobody wants to use it. The same can be said for expecting to have a “set and forget” system; you should always be considering how to make the interaction better. The best way to do this is through the use of testing and data analysis to look for insights to implement.

Over the past 2 years we’ve gone on to design a number of pop up spaces for Nike product launches. Some of those are the Nike She Runs events in Sydney, and for Hurley, the Australian Open of Surfing. However much like a marketing campaign, these spaces have a limited lifespan and are generally manned, making them quite a different design challenge to a permanent installation. However, our design philosophy works for each space as it considers the user goals first and foremost. These pop up spaces provide us with the opportunity to implement things that push the boundaries a bit further, in comparison to a system that needs to be operational 7 days a week, 52 weeks a year.

When looking at the retail industry and the use of in-store technology, over the past 2 years the world hasn’t really progressed that much. Whilst there have been great individual examples, holistically the needle hasn’t moved that much.

There’s also been a failure to capitalise on the relationship between online and bricks and mortar stores, because the impact that online has on driving physical store purchases is clear.

A recent study from Deloitte in the US found that customers researching and planning their physical store visits online currently contributes 36 cents of every dollar spent in store. By the end of 2014, based on the current trajectory, it will likely contribute 50 cents in every dollar of in-store sales.

More than 8 out of 10 customers have visited you online before they walk in to your physical stores. That’s 84% of customers planning an in-store visit on your site, app etc. before they enter your physical store. If these same customers also use digital whilst shopping in store, there is a 40% uplift in conversion and a 22% increase in basket size.

Let’s reflect on those numbers for a second, and consider the negative connotation that customers using their phones in-store or show rooming has. Customers are most likely looking for information to validate their purchase decision, and if you’re not providing easy access to that information, and they end up finding that information and a cheaper price, then of course they may end up buying somewhere else. But if they’ve made the effort to be in your store, then you have the best opportunity to close the sale.

So with the opportunity apparent, and the statistics backing up the case, why are things moving so slowly? Because there are always barriers. Retailers are typical old school businesses, and when ecommerce came along it was seen as a small and different, and as such companies have their online departments set up as separate departments. Some even treat online as just another store rather than as a critical part of the conversion funnel for all of their physical stores.

Adding to this separation of ecommerce from the rest of the business is that the ecommerce store is generally judged only on its conversion rate for online sales. But as we can see from the earlier statistics, it is driving 84% of customers in to stores. The budgets allocated to online typically only take in to consideration the online sales, however I’d challenge whether any of your marketing has as great a return on investment.

Then turning our focus to physical stores and technology, there is FOMO. Much of the time media feeds this fear, the latest fad becomes a must have, for example “we need beacons”. Unfortunately this often results in a push from a company’s leadership to be on trend. In a rush to seem innovative, beacons are rolled out and the business feels like it has completed a key project. We have beacons. TICK. But the thing that is often missed in these implementations is what problem do they solve for the customer; none, but the CEO is happy. For now.

Until the technology isn’t achieving anything, is costly, problematic and deemed to be a waste of time by the leadership that pushed for it in the first place. Now don’t get me wrong I don’t want to change the management’s desire to adapt new technologies, I also don’t have anything against beacons, but what needs to be the core change here is that the beacons add value for the customer, and if you don’t focus on that in the planning phase, it’s hard to reverse engineer. This creates a major problem for our industry. It creates future reluctance to invest in innovative technology due to past failures, when the failure in fact had nothing to do with the technology; it was the customer experience design that was lacking.

The Consumer Decision Journey created by McKinsey has recently been updated by Brian Solis at Altimeter, to take in to consideration the connected customer. What this new journey takes in to account are the points at which a customer connects in to the online world, which is the world that we all live in. And whether the commerce is online or offline, these connected points and interactions remain the same. The smartphone that your customer carries with them everywhere they go allows them to be connected all the time, regardless of physical location. We need to understand the key points for us to engage with the customer and design their journey with your brand.

When looking at the Dynamic Customer Decision Journey, if I consider ecommerce much of this is a given. We understand that our customers are researching online, using social media and other sites for product recommendations. But what’s missing is an understanding that this also needs to be closely considered in the crossover from the online to the physical world. There is a need to deliver communications and tools for our customers to assist them in this journey.

Designing the Experience

What is the experience you want your customers to have? One of the great lessons I learned, whilst working out of Facebook with their product strategists, was to define the stories you want customers to share before you think about what the interface will be. I believe this tactic is also critical to defining success, as if you don’t know what you want your customers to say about your products and services, how can you measure the success of what you are doing? Sales and customer acquisition are vital, but with our customers having more and more power in influencing their peers, customer experience is more important than it has ever been.

You need to put yourself in your customers’ shoes and understand the context that they are in. As they move through the sales funnel, and end up in your physical store, what are they doing and how can you assist them in achieving their goals? Worry about the customer experience and then figure out the technology that is going to assist. At IE, in the product design workshops we run for our clients, we use methodologies that bring people out of thinking that they need an app or to implement beacons. We move them to defining what the problem is they are trying to resolve and understanding this from the customer perspective. We then we set out to rapid prototype a solution that can be tested within their business and by their customers to allow us to get feedback and adjust as required before rolling it out.

As in store technology is new, it can quickly be put into the too hard basket. But let’s remember those stats from earlier, customers who engage with you online and in store convert at a 40% higher rate and purchase 22% more.

In Store Design – Critical Customer Experience Factors

The key things to consider when designing your experience are to:

Define the problem you are solving.
What is the customer need that this delivers on? What do you need to do to assist the customer is finding the right information to empower them to purchase? What context is the customer in, for example store entry, on the floor, in a change room, or at checkout?

Define your target audience

Who is your target audience? Is the solution you are creating only for a particular customer need or customer type? Do they have needs that vary from a general customer? What are the potential exit points for the customer and how do we remain a part of their purchase consideration? For example in the Nike SB solution we factored in that the target customer, young males, may not have the ability to purchase on the spot. Therefore we created the ability for them to send their desired product to their phone or email to ensure we remained a part of the customer decision journey.

Then determine the technical solution

The technical solution can vary widely, so the only word of advice I have here is to use commercial grade hardware in your rollout. Consumer grade technology, such as iPads, can be problematic; they were never designed to be set up to run all day in a single location. There are screens and tablets that have been designed specifically for these use cases, and the investment is definitely worthwhile.

Going back to the Dynamic Customer Decision Journey. I’d like to add an element to it for you to consider with the in store technology design, slotted in between evaluation and purchase items. This is where I believe the pre-purchase evaluation occurs in store: the touch and feel of the product, and final validation that the purchase is a good idea takes place. This is where digital in-store often comes in, but the customer drives it. They pull out their mobile phone to do a check on the product they are looking at, they don’t trust themselves, they trust online opinion more than store staff and so they’ll do a quick check. In fact recent research shows that millennials trust online opinion more than that of family and friends.

Imagine, rather than the customer needing to pull out their phone, that you facilitated that purchase validation. Allowing a customer to touch and feel the product, scan its barcode and on a small or big screen allow them to see additional data to validate the purchase is a good move to make. Best practice ecommerce is to provide product ratings and reviews on the product detail page, we’ve added many things to our e-commerce stores to give customers confidence in buying online. Now customers are doing the same thing within your physical store, getting the information they desire and the validation they need using their phones. Creating a solution to allow your customers to get this information from you using interactive technology in store will also assist your customer service staff in closing a sale. They can then use the power of additional content and public opinion to assist the customer in becoming informed and empowered in making their purchase.

Now there are many opportunities for creating interactive experiences including:

  • Digital signage;

  • Ship from store;

  • Shoppable windows;

  • Intelligent change rooms; and

  • Kiosks to name a few.

Most of them can leverage the same technology you have been developing for your online store. Whilst the up front cost of the hardware can be confronting, I’d ask you to consider the current costs you accept in a store fit out. As well as the monthly or seasonal VM updates, where printing and postage, not to mention the staff time to make the changes are an accepted business expense. Then consider the potential savings you can gain from reducing this ongoing expense to a few CMS updates from head office or via a tablet to in-store digital screens and things start to get compelling. Add to this the opportunity of increased conversion rates for customers that use digital in-store and your business case starts to come together.

From little things big things grow; start small and consider how you’d start today if you didn’t have the legacy. Determine how you can test and learn with a pilot store or with a pop up environment. There is nothing stopping you from doing this in your next store rollout.

But ensure that in designing the solution your customer is kept top of mind, the solution doesn’t need to be complex, however it must be useful. Think of the stories you want your customers to share, as they are now more than ever a critical sales channel for your business.

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