Much attention has been given to the phenomenal rise of e-commerce, as consumers delight in the convenience of shopping from the comfort of their homes.
And as e-commerce interfaces have become ever more slick and seamless, with one-click payment systems and smart, interactive platforms, shoppers have begun to use e-commerce on a regular (sometimes daily) basis. According to recent PayPal research, South Africans spent R37.1 billion shopping online in 2016, marking an increase of nearly 30% from the previous year.
While South African consumers have always been loyal to physical, brick and mortar stores, many are finding that the in-store experience simply doesn’t live up to the seamless, virtual store experience offered by the same brand.
Often, stock is not readily available, there are issues with returns and payment, and customer service is mediocre, at best. Arguably, brick and mortar retail is being left behind the digital revolution – and it needs to catch up fast to remain efficient, relevant and profitable.
Fortunately, with the ubiquity of smartphones – particularly in the South African marketplace – local retailers have a juicy opportunity to boost in-store engagement. Several emerging mobile technologies, highlighted below, can be nothing short of revolutionary in terms of making the physical shopping experience both exciting and efficient for shoppers, and more productive (and profitable) for retailers themselves. Indeed, mobile is the ultimate enabler with regards to bringing current digital innovation to brick and mortar stores in South Africa.
1. Embracing Mobile Wallets
Increasingly, local shoppers are choosing to leave their cash, credit and debit cards at home – and instead use their smartphones as digital wallets. According to data released early this year by PayPal, 85% of local consumers have used their mobile phone to make a purchase in the past year, with 52% indicating that in the past month they’ve left the house without their wallet at least once – preferring to do their payments with their mobile device. For retailers then, it is critical to offer seamless mobile Point of Sale (POS) options, and to provide incentives to customers via discounts, coupons and value-added pricing that can be accessed via digital wallets.
2. Harnessing Geo-location & Bluetooth beacons
With almost every shopper now armed with a smartphone, geofence technology, which is fuelled by Bluetooth beacons, can boost in-store engagement and drive offline sales. So how does it really work? Today, every smartphone has a Bluetooth transceiver that supports BLE (Bluetooth Low Energy) protocol, and has built-in location services. In short, this means that a shopper’s mobile device can be tracked. This allows retailers to broadcast a personalised message when a particular user approaches a certain aisle or section of the store. Ultimately, this technology enables retailers to engage with their customers in a hyper personalised manner while they are in physical proximity – offering customized deals, discounts and even coupons to build brand loyalty. U.S based beacon platform, Swirl Networks, has stated that certain use cases have generated a projected 5x return on investment, as well as an over 40 percent increase in average basket size.
3. Transforming Customer Experience with Augmented Reality
This year, many analysts expect to see more retailers harnessing augmented and virtual reality (AR/VR). Indeed, research firm Gartner predicts that as many as 100 million consumers will shop via AR by 2020. So what’s the value of AR for retailers? Increasingly, the technology enables a highly intuitive and high-value user experience for consumers. For example, you can use your smartphone’s camera to ‘place’ a desk in your office to see how it looks. Or, in the same way, see how a certain colour/texture of paint looks on your bedroom wall – before actually painting it. Arguably, AR will soon become an invaluable technology for retailers by harnessing AR apps to layer digital, data-rich text, images, video and audio on top of the physical world.
4. Smarter Product Placement with Facial Recognition
For modern retailers, data is key to success – and new facial recognition technology is able to provide critical data that can easily be turned into hyper personalised marketing and customized deals, discounts and offers. By leveraging facial recognition to profile customers, retailers can pinpoint how many people are coming into stores, and their age, ethnicity and gender. Essentially, it’s all about understanding the foot traffic, and thereby offering highly customized information and deals to each shopper. In addition, this technology can track movements and can help retailers understand where customers’ attention is focused – and therefore where to place/ how to arrange certain products in a more efficient way. For example, using facial recognition, retailers can create product heat maps to better design the in-store experience and thereby boost basket size.
Looking ahead, it is clear that mobile technology will be key to unlocking emerging digital innovation within physical, brick and mortar stores. Without properly integrating and leveraging mobile, today’s retailers face the risk of becoming irrelevant in an era of hyper-personalisation, speed and agility.
By Leon Coetzer, UK CEO, redPanda Software