Increasing Conversions 101: Planning the Personalized Path to Purchase

Transcription

1 Charting the Path That Links Technology and Business Goals Increasing Conversions 101: Planning the Personalized Path to Purchase Customers expect their shopping experience to be personalized regardless of how, when, or where they choose to shop. Personalizing the shop through a variety of technology leads to more sales conversions. In the past, shopkeepers knew all their customers and what they wanted to purchase. Of course, that was long ago when there were fewer customers and products. Now, in order to make those connections retailers must rely upon technology to identify shoppers and steer them toward a purchase. If done successfully the retailer can stand out in a crowded marketplace and be the one customers turn to again and again, both online and in-store. SPONSORED BY INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 1

2 54% Retailers cite the inability to predict customer traffic in-store as a major issue. Source: EKN Research, Engaging Connected Consumers Through Location Insights If a retailer does not have the desired item in stock, it needs to be able to be easily ordered online, preferably with shipping to the customer s home. If the customer is not satisfied, this becomes a somewhere else situation if the retailer cannot provide the desired level of service, the customer can and will move on. By blending in-store/online offerings and customer-tailored selections retailers have the ability to make sure somewhere else is no longer an option and increase sales conversions. The pressure to provide an interactive shopping experience is incredible. Retailers face two huge issues as digital and mobile options become essential to capturing sales. The first hurdle is the inability to predict customer traffic in-store, cited by 54% of retailers surveyed in EKN Research s Engaging Connected Consumers Through Location Insights report. As retailers add new technologies to stores, a second issue is gaining momentum: using analytics to gain insight into what customers want. As new analytic tools churn out customer insight, retailers must decide what to do with all the numbers and how to link them to customer habits for the ultimate goal sales. Using customer analytics to sift data and pinpoint shopper wants is necessary to tailor offers and build those sales conversions. Online and in-store must be blended to create the interactive experience customers are seeking. When shoppers enter a store, most have a mobile phone either in hand, pocket or purse. Savvy retailers are upgrading in-store WiFi, not just to gather information but to push offers and communicate with customers as they shop. The shoppers path through the store tells retailers which areas are of the most interest and how long customers spend in some sections or do not spend in others. Currently, five in 10 INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 2

3 42% Retailers plan to deploy or upgrade mobile devices for associates/managers in the next year. Source: RIS News, Store Systems Retail Techscape retailers use some form of customer location-based engagement tools, including in-store WiFi programs, according to EKN Research s Engaging Connected Consumers Through Location Insights. Customers expect WiFi in stores, and retailers are taking the next step and using WiFi to personalize the shop and the sales experience. Many retailers have installed beacons, small devices that use Bluetooth low-energy wireless technology, to send signals to customers smartphones. The unobtrusive beacon can be placed at various points throughout the store to communicate to customers via their personal mobile device. Whether it is a welcome at the door or a push notification when the customer nears a display, beacons help retailers touch base with customers throughout the store and are becoming an important part of the path to purchase. Another piece of the puzzle, kiosks, can be used for ultimate customer selection and sales. As kiosks are added to retailer stores, they should be designed to increase sales conversion and create excitement. Retailers who design kiosks as duplicates of store websites fail to differentiate themselves and their offerings. Kiosks tout product information and the ability to order items not available in-store. In addition, many retailers are using kiosks to accept mobile payment. Most retailers are facing a significant sales opportunity that requires the implementation of digital solutions. Millennials are the biggest generation of consumers in U.S. history, even bigger than the Baby Boomers. Digital technology is an integral part of the lives of Millennials. Their affinity for all technology, especially the smartphone, is reshaping retail. Millennials use their phones to check all kinds of product information, from pricing to reviews, and are opting for convenience over brand strength and loyalty. INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 3

4 INDUSTRY INSIGHTS Getting to the Next Level of Conversion Simply stated, retailers are working to the ultimate goal: How do I connect the online world to my consumer that results in a converted sale within the store? JOHN PRUBAN, PRESIDENT, LEVEL 10, LLC Q: How can retailers leverage digital solutions to connect with customers and increase in-store conversion rates? JOHN PRUBAN: In and of itself, this is the main theme of what every retailer is trying to accomplish when it comes to the types of technologies they are exploring and deploying. The solutions are almost endless. Digital screens, beacons, kiosks, networking, and mobile, mobile and more mobile are just some examples. Simply stated, retailers are working to the ultimate goal: How do I connect the online world to my consumer that results in a converted sale within the store? Q: What challenges do retailers face as they add digital and mobile technology and apps? PRUBAN: Retailers are adding more technology in their stores than ever before. This is translating into a variety of pain-points. Minimization of key details, communication gaps between functional teams, faster requested execution timeframes, and post-rollout pitfalls are just a few examples. As these technologies become more consumer-facing, the business has less tolerance of risks and mistakes forcing IT teams to find a stronger solution partner network that can act as an extension of them for the full lifecycle of the technology selection, integration, deployment and ongoing support. This approach will help minimize pitfalls and maximize ROI and satisfaction. Q: How can mobile and digital solutions blend physical and online shopping to entice customers to spend more in-store? PRUBAN: The same principles that enable e-commerce teams to know their online shoppers are eventually going to make their ways into the physical stores. Customer-loyalty based on shopping patterns, clear windows into inventory locations and levels, and value-added pricing and enticements are all things that mobile and digital solutions bring into the stores. In addition, retailers are looking to these technologies to increase or manage associate productivity. The hurdle for IT teams, however, continues to be integrating these new technologies with legacy data and systems. Level 10 compliments your hardware purchases by customizing the lifecyle of your staging, integration, deployment, ongoing maintenance and help desk services needs. Q: Looking toward the future, what new solutions are retailers considering to increase their in-store conversion? PRUBAN: Today, we see smart retailers looking to get the most out of their mobile and digital solutions by making them into multi-functional devices in the forefront of the upcoming minimum wage increases. The same tablet that a store manager is using to plan schedules or display planograms, can be the same device used for inventory management, product look-up or even a mobile and/or docked sale. Making store associates more efficient by putting the right tools and applications in their hands will be the key to profitable success in the stores of the future.

5 1 2 IN Retailers lack adequate understanding of customers within the four walls in terms of traffic and key demographics and psychographics (lifestyle, preferences and product affinities). Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi This generation represents the biggest group for growth both now and in the future, but it is also the most demanding. They expect in-store service at the speed of mobile and assume their wants and needs will be satisfied with a plethora of sizes, colors and prices. Stores with apps that meet the needs of these shoppers are on the right track but if apps are poorly crafted, Millennials move on. They may visit physical stores to see items up close but will check mobile for more information. In-store technology that touts added selection and promotions and creates a sense of excitement about offerings will help draw this group in. There is plenty of profit to be made from Millennials but stores must be interconnected with online and prepared technologically to satisfy these shoppers needs. As retailers plan sales strategies for all customers, associate contact with shoppers and assistance with needs becomes even more important than in the past. Arming associates with mobile information is a valuable tool in sales conversion. Store and customer service associates are the frontline of a retailer s customer experience, according to EKN Research s Creating a Frictionless Customer Experience Playbook. New training, data such as customer profiles, item pricing, and promotions can create a more positive customer shopping experience and increase chances for conversion. Use Kiosks to Increase In-Store Sales Kiosks are key to increased information and sales for many retailers. Whether at the end of the aisle, displayed on a prominent wall or centrally located, freestanding kiosks are one of the most comparable experiences to online shopping. These consumer touchpoints should be attractive, not old desktops. Retailers must make kiosks more than just a standing access to the store s website. The kiosk must be INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 5

6 39% Retailers plan to deploy or upgrade shopper tracking. Source: RIS News, Store Systems Retail Techscape integrated into both online and in-store for successful sales conversion. Conditioned by rich digital experiences, consumers have increasingly low tolerance for customer experience failures. And it is easier than ever for consumers to abandon engagement at the slightest friction, and the impact is far-reaching. Use kiosks as an endless aisle to attract customers in search of sizes, colors, and even categories not stocked in the store due to space limitations. Associates can bring customers to kiosks when questioned for items not carried. Space becomes unlimited using kiosks. For example, Party City offers a much broader selection online 80,000 SKUs online versus 30,000 in-store. Mobile currently accounts for 50% of e-commerce traffic and 25% of e-commerce sales. Online is linked to stores through free WiFi and in-store ordering with free shipping to increase sales conversion. The 900-store chain s kiosks provide custom-ordering, leading to sales conversion such as requests for party supplies or costumes. Kiosks have enabled Party City to create a more customer-interactive format in stores which has increased sales. Kohl s encourages customer kiosk use, instead of turning customers away when items are out of stock. Associates direct customers to the in-store kiosk to search for the size and color they need on the retailer s website. Free standard shipping is offered when an item is purchased at the kiosk, further encouraging sales conversion on out-of-stock items. Carefully crafted attention grabbing kiosk videos are used to draw in customers. In-store specials, not online but only on kiosks, encourage more customer visits and sales. When using interactive kiosks as an endless aisle, retailers must ensure merchandise is always available, either in DCs or through external suppliers. Retailers may offer in-store pick up or home delivery INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 6

7 from store warehouses. Another option is drop shipping from external suppliers to the customer s home. 57% Customers use a company s website or mobile app while shopping in-store. Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi Know Where Customers Are Located Retailers are well aware of beacon or locationbased technology, but few have been able to fully leverage its potential. Nearly 4.5 million beacons will be in use by 2018, according to RIS News Bringing Home the Beacon report. But, how many are using its many facets to garner information that can optimize sales conversion? Customers must download a store app to their phones before retailers can capture personalized location data, making widespread adoption difficult. Savvy retailers are offering special promotions to encourage this download, but many still struggle gaining shopper buy-in. The downloaded app can link location with customer information to create a personalized shopping experience. Adding a mobile beacon near the store entrance is one way to greet customers automatically. Special deals can be promoted to entering customers or push notifications sent to customer smartphones when near a specific area or product. In addition, an exclusive offer can be sent to the customer to increase the odds of converting the sale. Retailers have been working for years to understand and track the customer journey through the store. With beacons and location-based technology, each customer s store trip can be tracked through the app and tied to POS information. The customer s purchase history and demographics can be leveraged to personalize offers, resulting in purchases. If information is not integrated, however, location data is useless. Beacons can be part of predictive analytics and proximity marketing. Couple these two customer trackers and you can discover where shoppers inter- INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 7

8 86% Retailers will deploy WiFi access points in their stores (53% currently and 33% in the next 2 years). Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi est lies. Sixty-one percent of retailers (mostly in the specialty hard goods and soft goods segment) plan to increase spending on predictive analytics, according to RIS News 13th Annual Store Systems Survey. The report notes that proximity marketing is most effective when linked with predictive analytics. In an ideal scenario, proximity marketing can mimic one-to-one marketing and CRM. Ohio-based Marc s grocery and pharmacy is hosting in-store beacons from digital food brand Allrecipes in its 58 stores to provide shoppers with personalized meal suggestions and products. The beacon triggers notifications to shoppers who have downloaded the Allrecipes Dinner Spinner app to their smartphones. Customers receive meal recommendations with recipes using products on sale at Marc s. In-store notifications are triggered on shoppers smartphones and the hyperlocal beacon notifications are sent to Allrecipes Dinner Spinner app when shoppers enter a Marc s store. Meal recommendations trending among local cooks with recipes featuring products on sale at that particular Marc s store are sent, which often lead to sales conversions. Currently, shoppers view 35 million Allrecipes.com recipes monthly from their phones while they are in-store making grocery purchase decisions, according to RIS News What s for Dinner for Tonight? Allrecipes and Marc s Stores use Beacons to Give the Answer. Marc s and our chain of stores are excited to be a part of this collaborative effort that brings together meal solutions, the grocery experience, and digital to the forefront of our customers shopping experience, said Day Armelli, marketing director for Marc s. We anticipate this will open up additional doors that allow us to deliver greater value to our customers by helping them make the most out of their in-store shopping experience. Retailers have sought ways to track shoppers for INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 8

9 years. Beacons and location sensing technology are meeting retailer demand for increased visibility into shopper behavior in-store. 2 IN10 Retailers use some form of customer location based engagement tools, including in-store WiFi. Source: EKN Research, Engaging Connected Consumers Through Location Insights Use WiFi To Guide Customers WiFi in-store is more than just a customer convenience. Savvy retailers are using WiFi analytics to identify customers at both an aggregate and individual level. Customer traffic patterns are aggregated to help monitor aisle traffic and set merchandising, labor and floor plans, according to EKN Research s Engaging Connected Consumers Through Location Insights report. Offers geared to specific customers are sent to mobile phones through an app and sales conversions are promoted. The report adds that 53% of retailers are leveraging WiFi and one third of companies plan to use WiFi in the next 24 months. The key in defining a WiFi analytics strategy is determining how it will be used as a reporting tool for driving store conversions. The most common use of WiFi analytics is finding the value of store-location traffic patterns. Delving deeper into this information can provide insight into customers intentions in-store as well as their navigation. Correlating POS data with in-store analytics can help bolster the bottom line. Using WiFi is a more immediate way to drive sales conversion than some other technology options. As the constantly connected customer goes through the store or even as he or she enters, they are presented with a push notification of a special offer, personalized to their wants or needs. Or, the customer might be near a display and receive an offer to try a new product with a tempting coupon that is readily available for checkout. Customers also like to be connected to conduct instore research prior to purchasing products. A recent INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 9

10 53% Retailers planning to leverage WiFi in the next 24 months. Source: EKN Research, Engaging Connected Consumers Through Location Insights WiFi Alliance poll published in Business News Daily asked customers why they use their mobile devices in-store: 40% use their mobile device to look up product coupons. 36% text, call or video chat someone to get their opinion on the product. 40% look up similar products to do price comparisons. 35% look up product reviews. 40% take photos of products they re interested in. 16% access the store s customer service website. Equip Associates With Information for Increased Sales The days of associates standing behind a counter patiently waiting for customers to come to them are over. Smart retailers are arming their associates with technology and data to free them from the cash wrap and personalize the shopper s path to purchase. Associates equipped with tablets can monitor shopper behavior and leverage the data to improve the experience, for example by determining when lengthy aisle time may indicate assistance is needed. Associates can quickly look up companion or accompanying items for cross selling. The functional area that can benefit the most from store-location and WiFi technology is optimization of labor, according to EKN Research s Engaging Connected Consumers Through Location Insights report. Retailers can send instant notifications to associates for specific tasks that need to be completed and to allocate labor in certain departments or zones. And changes can be made throughout the day. Chico s FAS, the apparel retailer featuring Chico s, White House, Black Market and Soma brands, is using technology to build on its sales model of con- INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 10

11 61% Retailers (mostly in the specialty hard goods and soft goods segment) plan to increase spending on predictive analytics. Source: RIS News, 13th Annual Store Systems Survey structing lasting relationships between associates and consumers. Associates have always been encouraged to keep books detailing regular customer preferences. The retailer s tech division developed an app to replace the paper books with a dynamic digital solution. The solution allows associates to recommend merchandise to specific customers, based on previous purchases. Associates are equipped with ipad minis to access the solution. Personalization both as a concept and in terms of the underlying technology that enables it is rooted in e-commerce, said Gaurav Pant, SVP Research, EKN Research, in Why Frictionless Matters. Brickand-click retailers must extend its definition to include arming store associates and customer service representatives with the relevant insights at the right time, right place in order to move from personalized messaging to a truly personal experience. Currently, a little over a third of retailers provide guided selling tools to their store associates or have an in-store mobile app, while 1 in 2 can look up and update a customer profile in-store, according to EKN Research s State of the Industry Research Series: 3rd Annual Stores Benchmark Stores as Hubs of Omnichannel: Myth vs. Reality. Tasks store associates can conduct on a mobile device in-store as reported by retailers, have increased between 2014 and 2015; look up and update a customer profile has increased from 32% to 52%; and check out a customer increased from 35% to 58%, the report adds. Conclusion Customers are beginning to expect a blended experience of online and in-store. However, instore is not the store of the past. As consumers walk through stores, they check their phones for informa- INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 11

12 tion on products, whether on the store app or via a browser. By placing greater attention on the consumer s need for information, sales conversions occur. Personalizing the customer experience pulls the shopper into the specific retail environment to seek out products in-store, on the store website, specials on kiosks, through push notifications, or seamlessly through external suppliers. Savvy retailers realize they must leverage the power of WiFi, beacons, kiosks, and associate-assisted technologies. Everything must be integrated to deliver data for analysis and specific shopper invitations. Pulling these pieces together and giving the consumer the digital experience they expect will bring sales back into physical stores as part of the total in-store/online experience. All retailers have to personalize technology for their brand just as they personalize the shopping experience for their customers. The main goal is more sales ringing through the POS. INCREASING CONVERSIONS 101: PLANNING THE PERSONALIZED PATH TO PURCHASE 12

13 Charting the Path That Links Technology and Business Goals Requirements Every major business initiative requires a detailed assessment that examines the project s impact on internal processes, technologies, personnel, strategic alignment and costs. One goal of the assessment is to identify granular and high-level requirements that are essential elements in the project s game plan. Managing and addressing these requirements is critical to success. Requirements for Optimizing Sales Conversion Strategy Draw customers to physical stores by blending the digital and physical shopper experiences, leading to in-store purchases. Increase store conversion through in-store technology partnered with online, to provide the products customers want. Customize location-based marketing to offer personalized selections and promotions. Link customer online and in-store browsing for store conversion.. Technology Identify customers in terms of key demographics and psychographics to personalize all in-store technology: interactive kiosks, location-based marketing offers, digital signage personalization, and associates with ready mobile access. Use customer profiles to ensure interactive kiosks offer attractive promotions and categories geared to specific store shoppers. Sales results and big data will influence future in-store offers for increased conversion. Program digital signage to welcome shoppers to the store, just as online sites recognize shoppers by name. Showcase targeted specials to entice shoppers to purchase in-store. Enable associates to have ready access to tablets or kiosks to assist customers throughout the store with needed alternative purchases or additional buys. Personnel Train associates in the use of all in-store technology to ensure customers will receive any needed assistance. Provide mobility through the use of tablets and kiosks so associates can readily answer customer questions and suggest additional purchases. Equip associates with mobile POS options to speed customer visits when needed and enhance shoppers in-store experience.

14 Charting the Path That Links Technology and Business Goals Roadmap KPIs Infographic Optimizing Sales Conversion l Use Kiosks to Increase In-Store Sales l Know Where Customers Are Located l Use WiFi To Guide Customers l Equip Associates With Information for Increased Sales 61% Retailers (mostly in the specialty hard goods and soft goods segment) plan to increase spending on predictive analytics. Source: RIS News, 13th Annual Store Systems Survey 2 IN10 Retailers use some form of customer location based engagement tools, including in-store WiFi. Source: EKN Research, Engaging Connected Consumers Through Location Insights 42% Retailers plan to deploy or upgrade mobile devices for associates/manager in the next year. 39% Retailers plan to deploy or upgrade shopper tracking. Source: RIS News, Store Systems Retail Techscape 53% Retailers planning to leverage WiFi in the next 24 months. Source: EKN Research, Engaging Connected Consumers Through Location Insights 86% Retailers will deploy WiFi access points in their stores (53% currently and 33% in the next 2 years). Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi Source: RIS News, Store Systems Retail Techscape 54% Retailers cite the inability to predict customer traffic in-store as a major issue. Source: EKN Research, Engaging Connected Consumers Through Location Insights 57% Customers use a company s website or mobile app while shopping in-store. Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi 1 2 IN Retailers lack adequate understanding of customers within the four walls in terms of traffic and key demographics and psychographics (lifestyle, preferences and product affinities). Source: EKN Research, Building a New Digital Foundation for Retail and QSR with Wi-Fi