Embracing the Physical in Retail: A New Era of Data-Driven Store Experience
4/22/2024 Maroun Ishac
Total e-commerce sales in the U.S. make up just 16% of total sales, according to Census.gov, with the majority of shopping still taking place in brick-and-mortar stores. Despite this, when people talk about changes in retail they often focus on the experiences of online retailers. By doing so, however, they’re overlooking the importance of understanding customer expectations in physical stores — and the insights that can be gained from tracking customer behavior in store aisles.
At a recent World Retail Congress in Paris, France, Hans Fischmann, RRD VP Product Management and Digital Product Management, highlighted the evolution of the retail industry during a panel session titled “The $100 billion revenue boost you just can’t ignore: Next-gen in-store media is here. Don’t let it pass you by,” hosted by WPP. During the session, Fischmann emphasized the significant chance for retailers to directly engage with customers and gather valuable data to enhance shopping experiences and refine marketing strategies.
Where digital familiarity meets physical tangibility
Fischmann highlighted a crucial advantage that physical stores have over online platforms: the personal touch.
When customers enter a store, they not only may make purchases — they may also potentially provide valuable data that will help retailers understand their preferences and behavior. This data is essential for tailoring shopping experiences and enhancing customer service. Retailers are urged to move beyond conventional marketing approaches and focus on creating comprehensive shopping experiences aligned with their digital strategies. This includes understanding the customer’s in-store journey and leveraging data to provide personalized promotions and products.
The rise of retail media networks (RMNs) has opened the eyes of many retailers to the possibilities inherent in the effective use of data. These networks provide a framework that views consumers three-dimensionally — not just as buyers but as integral parts of the business ecosystem.
“The integration of digital and physical retail is not just an enhancement but a necessity in today’s market,” said David Roth, CEO of The Store - WPP. “It’s about creating an environment where digital familiarity meets physical tangibility.”
Janet Levine, Executive Director, Invention and Strategy at Mindshare, emphasized the shift in perspective toward the physical store as the epicenter of modern advertising strategies: “Advertisers now see the store as the starting point. Brands that fail to utilize the physical store as a channel for advertisement will be in dire straits. The physical store isn’t just a point of sale — it’s a vital medium for engaging consumers.”
A shopping experience bridging the gap between traditional and digital retail
The current retail landscape presents a significant opportunity for innovation. With a growing number of consumers opting to shop in-store and an uptick in physical transactions, there’s a heightened focus on how retailers can leverage this setting to boost average transaction sizes and also gather more data.
Integrating digital strategies into physical spaces enables a seamless blend of experiences, offering customers a smooth transition between online and in-store shopping. Retailers capable of effectively integrating and analyzing customer data from their brick-and-mortar locations will be better equipped to meet customer demands, drive sales, and remain competitive in a rapidly evolving market. The aim is to craft a shopping experience that feels both personalized and technologically advanced, bridging the gap between traditional and digital retail.