Why physical stores must connect and digitize

Published by Telefónica IoT Team Smart Retail

There’s no need to fear digitalisation. The evolution in the retail sector inevitably entails integrating online sales with in-store service. Businesses must connect to the world if they want to take full advantage of the opportunities offered by the Internet. If not, they are doomed to become obsolete, backwards and inefficient. So what role does the IoT play in all this? The possibilities offered by technology are enormous. It is time to embrace them and take full advantage of the future.

Online + brick-and-mortar, the formula for success

When seeing the advantages that online retailing brings to the market, it is easy to get carried away by euphoria and start implementing digitalisation. Today digitalisation is necessary, as attested to by sales forecasts in the decades to come. But do not forget that online sales should not be the only focus. There will always be "classic" consumers who prefer to shop in brick-and-mortar stores. There are also those who prefer to check out the products online and then physically purchase one of them. The range of clients and their ways of interacting is very broad, and all of their needs must be met.

To do so, it is important to have an online experience that is appropriate, satisfactory and useful, as well as perfectly integrated with the physical store. It does not make sense to focus on purely digital commercialization while neglecting the face-to-face experience, just as ignoring electronic sales is an incoherent and dangerous decision. To be able to do this, it is essential to have an accurate Customer Journey Map (or CJM). It gives you insight from the point of view of the customer experience. This advanced analysis tool will allow you to unify efforts in the pursuit of customer and business satisfaction. For example, the CJM shows you that the values ​​most appreciated by consumers online are fast access to the product, self-service and mobility.

A suitable Customer Journey Map will also help you to manage a sales omnichannel. The omnichannel is essential if you need to unify different formats and clients, especially if you want to provide an efficient and, above all, user-friendly experience. It will also help to give a more serious and detailed image of the brand, as well as reducing unnecessary costs and resources when managing information and sales. With a well-designed omnichannel strategy, a person who starts a purchase from the website can continue the transaction by speaking with customer care and finish it in the physical store, for example, without interrupting the process. Up to two-thirds of customers, both online and on-site, use the store, either before or after the transaction. Taking care of the user experience and the integration of these channels are two vital issues in a world where digital disruption and transformation are completely changing our vision of retail.

Disruption and digital transformation

As digital transformation is affecting each and every sector, digital disruption is gaining momentum, especially in retail. The shift in business models driven by this transformation has ended up generating the momentum leading towards digital disruption. This concept refers to the paradigm shift in the retail sector and interaction between customers and the brand. Digital disruption focuses on the retail company’s responsibility for the relationship between the two parties. What the customer can expect, their shopping experience or after-sales feelings are just some of the features that drive digital disruption.

So what does this mean for retail? Since the effects of digital disruption can be identified in the last part of a transaction, the situation closest to the customer is often what determines the final experience. This can happen online, face-to-face or in any combination of the two. Therefore, digital disruption has an endless number of manifestations, and we must be attentive to all of them. Retail is evolving on its own momentum, driven by this maelstrom of devices, connections and use cases that are appearing and changing rapidly, day in and day out.

From Online Sale to Smart Retail

The main challenge facing digital transformation is establishing the concept of Smart Retail. The main goal of Smart Retail is to take advantage of an immersive, emotional purchase. The customer no longer just wants to shop. She wants to have an experience at the point of sale (whether online or face-to-face). The data indicate that customers choose one brand or the other depending on how they make them feel. Therefore, Smart Retail seeks the ultimate shopping experience. They keys are innovative, original, emotional, inspiring concepts coupled with a user-friendly and unique process, with innovative touches and a personalized sale.

The application of technological solutions is vital in the deployment of a Smart Retail strategy. The IoT, precisely, is the touchstone that makes it possible to execute. The connected store, which gets information from the device where the customer was browsing their purchase, will welcome them with additional information on the product they just purchased while one of the clerks has already prepared the order. Furthermore, in this personalized transaction, the device will remind the customer of what other product they were looking for and did not find, making it available to them the minute them walk in the door, if they want. Any problem will be easily solved through a fluid after-sales system and with virtually no inconvenience. This entire scene is a mere representation of what the Smart Retail experience could be within the near future: a way in which digitalisation and face-to-face sales come together to work efficiently to ensure the satisfaction of both the consumer and the seller.


Telefónica IoT Team