Retail's Brave New World
The Internet brought the world’s marketplace to our desktops. Mobile devices have put it in the palms of our hands. Today, the song you hear for the first time on the car radio can be added to your personal music library in an instant. What does this mean for retail shopping?
While Internet-boom predictions of the total demise of retail stores were overblown, the industry continues to struggle with the implications of the digital revolution. ( According to Forrester Research, only 61 percent of consumers who cross over from online research to in-store purchases are satisfied with their buying experience, compared to 82 percent for those who end up buying online.) In most cases, the in-store shopping experience does not take into account how people interact with information today. It’s as if the information-rich society we live in stops at the store’s door.
There’s a bright side. Retailers can use technology to harness the power of information and create in-store shopping experiences that are highly personalized, informed, and fully immersive.
Advances in analytics and opt-in, personal cloud profiles will allow individuals to share data and preferences in a secure way and retailers to respond with customized service. For example, let’s say a young man is in the market for a new flat-panel, 62-inch TV. First, he goes online to research all of his options (plasma vs. LCD, makes, models, etc.). He could then share the data relevant to this purchase with the local brick-and-mortar stores of his choice. When he walks into one of these stores, the retailer can identify him through his GPS-enabled phone and offer him not just a product, but an entirely new shopping experience—an expert in the latest TVs greets him at the door, answers his questions, helps him compare offerings (online and off), and is equipped to offer custom discounts and packaged deals.
Going further, imagine if the young man could use his smartphone to scan the barcode of the TV to get the most up-to-date information, from competing prices from all of the stores in the area to feedback from people who purchased the same TV from that very store. Social networks and location-based crowd-sourcing technologies can ensure that customers don’t walk out the door for what might not be a better deal 25 miles down the road. Wherever he makes the purchase, the young man can use the same technologies to provide feedback. Regional managers can then use this data to gain insight on particular stores and specific products.
Imagine if we replaced paper-based price tags with digital signage that could not just include the latest promotion, but be adjusted with real-time information.
And that is just the beginning. Imagine if we replaced paper-based price tags with digital signage that could not just include the latest promotion, but be adjusted with real-time information. Low-power reflective displays would save time, money and natural resources, while enabling sophisticated auction-based pricing. Large-sized digital displays with built-in cameras could recognize general demographic information about customers and offer targeted ads. Personal mobile devices could replace point-of-sale systems, allowing customers to scan, pay, and “check-out” as they walk through the store. Finally, fully immersive 3D environments could allow the young man to see what a variety of TVs looked like in every room of his house.
At H-P, we believe that information is the most valuable resource in the 21st century. Industries, including retail, that treat it as such will drive the economy forward into the next phase of growth. Retailers who embrace digital technology can harness information to redefine and re-enliven the in-store shopping experience.
Prith Banerjee is senior vice president of research at H-P and director of H-P Labs, the company's central research organization. In these roles, he helps to chart technical strategies for the company, and he heads H-P Labs, which has seven locations worldwide.