Professor Roger Beahm says Retailers are Inventing Ways to Improve the In-Store Experience for Shoppers

11.18.2012 Article, Faculty News

Retailers get innovative to keep from losing shoppers to online rivals
Reposted from The Tennessean | by Walker Moskop

After years of slowly bleeding market share to online retailers, many brick-and-mortar-based sellers are coming out swinging this holiday season.

To mitigate the effects of “showrooming,” or consumers’ browsing products in a store and then purchasing them online at a lower price, companies are displaying more willingness than ever to experiment with new sales strategies.

On top of boosting efforts to reach consumers through mobile apps and targeted social media efforts, major brands are trying to leverage the ability of their store locations to provide an engaging experience that can’t be found online. At the same time, many are gradually blending e-commerce and in-store sales in hopes of directing buyers away from online sellers like Amazon.

The National Retail Foundation expects holiday sales to grow by 4.1 percent from last year, with 16 percent of total sales going to online sellers. To capture as much of that growth as possible, retailers are embracing both high- and low-tech strategies to make shopping a not just convenient, but richer experience.

Here are five innovative approaches consumers can expect to see this holiday shopping season.

Price matching
While matching competitor deals isn’t a new concept, more retailers are willing to match the dirt-cheap prices of online sellers, something many had been reluctant to do in the past.

For the first time, Best Buy and Target will match the prices offered by the websites of some rivals, including Amazon and Wal-Mart, in hopes of convincing consumers that they can find the best deals on everything they need in one location.

Giving a store employee the power to lower a price on the spot to match a competing deal online is huge, said retail analyst Ken Perkins. “That’s probably the single most important thing retailers are doing this year.”

It’s important to remember that some retailers limit price-matching to certain online sellers or certain products.

Pop-up shops, in-store stores
To capitalize on the temporary burst of holiday spending, more retailers are opening seasonal pop-up shops in malls and shopping centers.

As it seeks to beef up its direct-to-consumer presence, Microsoft has opened holiday stores, including one at The Mall at Green Hills, to show off its Surface tablet and new Windows 8 operating system.

At Opry Mills mall, Toys “R” Us and Brookstone opened stores for the holiday season, and Dell opened up a kiosk that is short term but will still stay open beyond the holidays.

Taking the pop-up shop concept in a different direction, J.C. Penney is opening boutique shops within its stores that feature a specific brand, such as Levi’s or Arizona Jeans. Eventually, it plans to convert 700 of its 1,100 stores into collections of 100 boutiques.

“The rest of the retail industry is watching to see if this actually works,” Perkins said.

So far, sales at boutique shops, which have been added in some of J.C. Penney’s Nashville locations, are 20 percent higher than sales in the rest of the stores, according to the company.

Creating a better in-store experience
At a time when steep discounts can be found almost anywhere, coupons and specials can go only so far in differentiating a brand, said Roger Beahm, director of the Wake Forest Center for Retail Innovation. Thus, retailers are inventing ways to make the in-store experience convenient, enjoyable and distinctive.

At the high end of things, a few stores have begun offering “augmented reality,” which uses a computer screen to let users experience a product virtually, such as trying on clothes — without the actual clothes.

For example, at The Lego Store at Opry Mills, a box containing hundreds of blocks used for building a spaceship can be held in front of an augmented reality screen, which shows a constructed version of the spaceship taking off from the top of the box.

Bringing an online feature to a brick-and-mortar environment, department stores including Macy’s and Nordstrom have installed touchscreens that show where products are located and make recommendations based on customer selections.

And to lessen the odds of long lines sending impatient buyers to the Web, some retailers are equipping employees with smartphones and tablets to scan items and swipe credit cards, allowing customers to check out in the aisle.

When it comes to checking out, even something as simple as offering shoppers the option of emailing a receipt, which more retailers are doing, can be significant, Beahm said. “It demonstrates the progressiveness of the retailers.”

Apps, social media
Knowing that consumers will use their phones to look for online deals while visiting a store, retailers including Target are installing Wi-Fi and trying to steer shoppers to their own mobile apps, rather than to a competitor’s app or site.

Those apps have grown far beyond being mobile-friendly versions of a store’s website. Through Target’s app, customers can check to see what specific stores have in stock. Once in the store, they can scan QR codes placed on the 20 most popular toys of the season and buy them directly with their phones.

Not to be outdone, Wal-Mart is launching store-specific Facebookpages to let people know about products and deals at the closest store. Through the retail giant’s shopping app, consumers can select a store and create a shopping list at home by scanning, typing or speaking items they want to purchase. The app locates the price for the items from that specific store. Once shoppers are in the store, the app tells them where items on their list can be found.

Games and contests
Retailers always are looking for ways to one-up themselves when finding creative ways to cut through the clutter and build enthusiasm.

One way of doing that is through contests and games. At Kohl’s on Black Friday, Facebook fans of the department store chain can access flash sales — where certain products are available only for short periods of time. And from Nov. 23 to Dec. 24, Kohl’s will pick up the tab for a lucky customer every day in each of the company’s stores.

J.C. Penney, which is experimenting with myriad strategies after seeing a 26 percent drop in third- quarter sales, is handing out 80 million buttons to shoppers during the holidays. Each button comes with a code that, when entered online, reveals whether the customer won a prize, such as a gift card or a trip to Disneyland.

“The key here is to create excitement, Beahm said. “The more unique, the more impactful, the more events themselves will produce results.”