4 minute read 15 Dec 2020
Instore digital experience

Can in-store digital experience transform the future of shopping?

By EY India

Multidisciplinary professional services organization

4 minute read 15 Dec 2020
Related topics Consulting

Digital transformation in retail, along with other innovative initiatives is becoming an imperative rather than a choice to maintain market share.

Retail after COVID-19

Retail has always been a very competitive industry where the chase for margins is unpredictable. The latest EY study Life in a pandemic: future of retail, understands both the near-term pandemic related impact as well as long term customer preferences of salaried professionals in India whose income has not been impacted by the pandemic. Digital transformation, along with other innovative initiatives is indeed an imperative rather than a choice to maintain market share.

The survey reflects the findings of 436 respondents from different age groups, gender and city types and how the pandemic is shaping the future of retail, further challenging the status quo with reduced footfalls, disrupted supply chains, and a distant recovery having its overhang on the sector. In this milieu, retailers need to be agile and transform their businesses across the customer’s purchase journey to address concerns and existing pain points.

The pandemic has transformed the entire shopping experience of a customer at each stage of the purchase journey – pre purchase, during purchase and post purchase.

Pre-Purchase customer experiences 

The pre-purchase consideration stages have elongated as the consumer now factors in much more thought before the actual purchase. While groceries and non-prescriptive medicine category will have strong growth with customers already shopping for such products and increasing spends from pre-pandemic levels, apparels, accessories and furniture stores will experience a longer-term recovery with customers delaying purchases till after the pandemic. Customers are also wary of travelling long distances to shop at their preferred locations, with 67% customers not willing to travel more than 5kms for shopping. Retailers will need to optimize their store layout and adopt practices that reduce crowding and enable customers to shop quickly. Going shopping is no less than going on a mission during the pandemic with 68% customers preferring to wear protective gear and 60% customers making shopping lists to reduce time spent in store.

As a next step, retailers must focus on empathetic messaging addressing customer concerns to ensure a safe shopping experience with the use of portfolio rationalization for multi-category retailers in terms of expected demands for each category. With fear and safety concerns still looming large on the minds of shoppers, retailers will need to focus on making their customers aware of the safety and precautions associated with the product and its retail and device interactive and empathetic messaging with an emphasis on hygiene and convenience. Retailers can leverage emerging technologies to increase brand recall and consideration in the mind of shoppers.

In store experience

The traditional brick and mortar channel of retail has been under siege by online/omni channel platforms ever since mobile technology evolved. With the onset of COVID-19, there is an increasing thrust on retailers to readjust their business operations to account for increasing preference for online and contactless purchases and decreasing preference for visiting stores physically. Given that majority of the customers are neither willing to enter the store nor willing to spend more than 30 minutes inside the store, the entire in-store shopping experience that might have therapeutic for some is instead causing anxiety.

69%

customers respondents want to know about the products without touching or removing products from the shelf.

Use of recent and emerging technologies like AR, magic mirrors, kiosks, RFID/QR enabled information screens, in-store messaging and communication will aid in improving the customers in-store and contactless shopping experience in the post pandemic era. Investments in new age technologies that enhance in-store experience are not just stop-gap initiatives but are likely to yield long term benefits in terms of increased customer satisfaction, engagement and retention.

Post purchase: Checkout and delivery

While the concern to limit contact with others is driven by the pandemic, point of purchase and delivery are quick wins in the contactless technology implementation plans. 

76%

customers want their purchases to be sanitized again after purchase

76%

customers prefer to pay via UPI or digital wallets

78%

customers would prefer to use self-checkout kiosks

Customers are expecting the building blocks of contactless technology – digital payments and self-checkout kiosks – to become mainstream in the near future. In addition, adoption of emerging technologies like AI and IoT will enable organizations to transform their contactless offering.

The emerging ‘planned buying’ behaviour of customers along with streamlined and efficient checkout experiences will influence impulse purchases.

Retailers must take these developments into account to optimize their product placement across stores. Implementation of newer modes like curb side pick-ups, drive through pick-ups, shared pick up points for sister brands, can help retain and capture customers who prefer to limit social interactions during the pandemic.

EY helped in developing the custom mobility app enabling customers to self-checkout with a minimum number of steps. The app has an interactive UI, is integrated with the existing billing system and loyalty system to ensure customer purchase history is maintained and points are earned. The technology provides both long term and short-term benefits. It is helpful in reducing the time spent in store and crowding at billing queues during the pandemic. Additionally, it enhances customer experience and engagement.

Retailers need to invest in digital infrastructure in store to improve the shopping experience and efficiency for the customers. This is a double win for retailers as implementing emerging technologies to increase the efficiency of operations in the short term and provide them with substantial and sustainable cost savings across the value chain. 

Summary

Consumer purchase decisions are moving beyond product attributes like price and quality and focusing more on the importance on purchasing channel and safety. Tailoring technology investments and digital transformation with product and customer strategy will enable retailers to optimize customer experiences and stay ahead of competitors.

About this article

By EY India

Multidisciplinary professional services organization

Related topics Consulting