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5 Digital Trends in Retail - What is Next?

Never-ending buzzwords: in the digital world of brick and mortar retailers, the proclaimed strategies are said to be miracle weapons in the battle for customers. What is actually behind concepts such as Geolocation and Indoor Navigation and when are they relevant?

Digital Touch Points, Mobile Payments, Beacons, Instant Delivery, Self-Checkout, Click and Collect: the digital interface of retail stores is dominated by futuristic-sounding concepts. In reality, however, many retailers (and consumers) aren’t there yet.

Before getting caught up with the latest in-store digital trends, retailers and local businesses need to first invest in addressing a more basic problem: being found online. Today, the maintenance of company profiles and their publication on Google Maps, Apple Maps, Touch Local and other important directories are a must for any retailer. These profiles and business information are the basis for a good ranking on local searches. A good result is particularly important on mobile searches for products and services close by, where it might mean the difference between a customer visiting your store or not.

Once the foundations of online presence management are covered, what’s next? Given the sheer amount of new digital strategies, the reluctance of many retailers is understandable. Brick and mortar stores also need to be careful of not overwhelming customers with too much new technology and have a plan in place to choose the right value-adding digital features.

Which trends have the potential to offer customers real value?

1. Geofencing and Geotargeting


At the centre of many digital strategies is the smartphone as an intelligent shopping assistant. Experts advice retailers to take over customers’ phone screen before competitors do. In this context, are the words “geofencing” or “geotargeting” often used. Geofencing describes a virtual boundary in real space, located within a certain radius around a business. An approaching smartphone is detected through Bluetooth beacons and near field communication sensors. The geofencing function is provided by the smartphone’s operating system and can be used by the store’s app. In any case, the owner of the smartphone must agree to this. He must first enable the function in his phone and allow the respective app to access his location.

When a potential customer crosses the geofencing boundary, for example, he would receive a personal greeting, an individual offer or coupons that will get him to engage in a transaction.

The biggest shortcoming of geotargeting is the aforementioned competition for the coveted space on the phone’s screen. Customers can quickly become bombarded with so much general or irrelevant information that they turn off the notices from all retailer apps. With regards to data protection, many customers are also hesitant to disclose their shopping habits through such applications.

Since geotargeting works only in connection with the respective merchant app, its success is difficult to estimate. Users will not upload too many apps to their smartphones. This is cumbersome, takes up space and drains the phone’s battery unnecessarily.

2. Indoor Navigation

image Photo: Intel Free Press

There’s another upcoming trend to influence the direction of customer movements - this time inside the store. Special indoor navigation apps lead the customer through an efficient route through the shelves, based on their shopping list. The app Aisle411 includes the store plans from over 225,000 locations.

Indoor navigation is closely linked to geotargeting. At certain locations in the store, customers could be informed via phone messages about a great offer on the shelf right next to them. The possible drawbacks for indoor navigation are similar in nature to those of geolocation. In this case, however, the merchant has more control over the number of messages received by the customer within the store.

3. Drive-through Shopping and Click & Collect

image Photo: Copyright Walter Baxter

The name may sound strange, but the concept is very simple. Here the respective strengths of both online and offline shopping are combined. Goods - mainly from supermarkets - are chosen and paid for comfortably on your computer or hand-held device. These don’t come in a package to a customer’s home, but instead are put together and picked up by the customer from a store.

The result is a relaxed shopping experience with no waiting times at checkout and product availability on the same day. This concept is particularly enjoyed in France and is growing in popularity. In Germany, the supermarket chain Real, among others, provides such a service in two cities. The online retailer Amazon is planning a drive-through supermarket in Silicon Valley.

Drive-through shopping sounds like a good idea. However, it comes with hesitations: do customers really save time by making their purchases online ahead of time? Does the pickup go smoothly without problems nor long waiting times? Only if these points are addressed does the trend have any chance of success, because many supermarkets are already offering the option to order online with low fees.

Much more common is the concept of “Click & Collect”, where customers buy items, for example from a fashion retailer online, and can pick up the product at one of the company’s branches. The customer saves on shipping costs and any returns can be handled immediately in-store. Even Ebay offers Click & Collect services for many products.

According to an article by etailment, Click & Collect is already standard practice among the major players in the retail industry. Click & Collect has been called the “must-have” of the year 2015.

4. QR Code Shopping

image Photo: Primus Inter Pares

QR Codes are a prime example of a tech hype that did not live up to its promise. Despite all expectations, the scannable images are now rarely used. As digital bridges for brick and mortar stores, however, the QR codes are again on the upswing. The payment service PayPal launched a pilot project in Oldenburg around 2013, where clothing or electronic products offered for sale on billboards or on shop windows could be bought and paid for immediately by QR Code. Goods were then delivered to customers at home. The project generated a lot of attention but underperformed with regards to sales expectations. Properly implemented, perhaps, the concept could work. In China, people in public places can scan billboards and get the purchased goods delivered.

5. Digital Mirror

A digital mirror in the dressing room that also acts as a monitor? The display can show the customer in which colours the sweater being tried on is still available, and simulate how other colours would look like when tried on. Or the customer is scanned in conjunction with Augmented Reality and the garments are cast on the body without the hassle of trying on clothes. Such devices are already on the market with brand names such as “Memory Mirror”.

Many customers, however, are still uncomfortable undressing in front of a camera. There is also the questions of which retail store segment could most benefit from such technology. Difficulties in implementation likely exist already, such as providing enough space for the mirror without losing too much retail space.

Conclusion: Not all digital concepts put forward by experts, service providers or agencies are actually being implemented. Not only are some innovations difficult to integrate by some retailers due to complex internal processes, but also customers might become overwhelmed by an excess of digital upgrades during their shopping experience. The core advantage of brick and mortar stores is the opportunity to offer personal service and expert advice. Rather than overburdening retailers and consumers alike with too many tech features, digital experts should focus instead on improving communication with the retail industry and creating solutions that really works for the retailer.

Title Photo: By Ben Schumin