With electronic shelf labels, magic mirrors, and socially connected screens, physical shops are digitally transforming themselves. During the Adobe Summit at Salt Lake City, Business Today caught up with Jason 'retailgeek' Goldberg, GVP of commerce strategy at interactive digital agency Razorfish, to find out how the retail experience is changing.
Q. You showed us a demo of a connected store - the RZRshop. Can you describe what's behind this initiative?
A. We think there is this missed opportunity in e-commerce. We have been doing digital e-commerce for about 20 years now. Best practices are beginning to emerge and market leaders have started to do a good job. But all that effort is only influencing 9 per cent of sales in North America. The overwhelming majority of purchase is still happening in retail stores.
What's happening is that customers are using all those digital tools to pre-shop. So their expectations have fundamentally changed. Twenty years ago you would choose which TV to buy exclusively through the brand name you trusted. Today we don't need to trust that anymore , because you can do one query on Google and know about products. So consumers have turned to things like ratings and reviews as a very influential shopping tool.
So when I as a store add a rating or one consumer review, I double the likelihood of selling that product, When I add nine reviews I expand the chances again. Ratings and reviews are very powerful. But there are no reviews and ratings in physical stores. RZRshop is all about taking all those digital tools on web stores, and taking all that content, the data and instead of just using them to sell to 9 per cent who shop online, put them in retail stores to target the other 91 per cent.
What we demoed here were a bunch of different in-store technologies that leveraged our digital best practices from our physical stores. We showed early version of our Adobe Screen products in which we have added in Razorfish technology so that when the consumer gets within four feet of the screen, it connects via Bluetooth to the customer's mobile phone and the content on the digital screen changes to be relevant to the shopper.
Q. But you are supposing the consumer's Bluetooth has to be on?
A. We are using a new version of Bluetooth called Bluetooth Low Energy, which is on by default. But there are different requirement such as the shopper needs to have the app of the store running.
Another technology we are using is called ICE, which stands for in-store customer engagement, and is from our sister agency Rosetta. It is an application that runs on a tablet for a sales person to use. The sales person uses his tablet to recommend some outfits to customers. The tablet can also broadcast pictures to a digital screen nearby. If the customer says, "that's a nice outfit but I need to check with my wife", the sales person can send the outfit to the mobile phone of the customer who can send it to his wife. If the wife says it is great, the customer goes to try on product. In the old world, if the size was not right, he had to come out and get another size, but with this technology, he can with one click on his mobile tell the sales person to get another size to the dressing room,
Q. What are the social components to the connected store?
A. We are now moving to "co-shopping" - seeing collaboration between the customer and sales person in the store and the extended person outside the store . Another social component is that when we show the outfit to the customer on the large screen, next to it are ratings and reviews of the outfit from customers who had bought it and rated it on social media or posted pictures on Instagram or Pinterest. As opposed to static content, the screen is pulling out all that rich social proof from the cloud and making it available to the shopper in the store.
Q. Are these technologies still a proof of concept or have you deployed them in stores?
A. Every element of these has been deployed in stores. To give you a couple of examples - we have done some flagship stores for AT&T, the largest wireless carrier in the US. They have used the co-shopping experience where the sales person sends products from their mobile phone to customers on a shared kiosk from where the customers can pick out designs of custom cases and send to some one outside the store to get suggestions. For a lot of people, the mobile phone case is a fashion accessory. At the AT&T store they can customize the product to you in the store. So you can take your own art work or photographs and have a custom case fabricated right there.
At the other end of spectrum, we have done showrooms for Audi. Typically, auto showrooms were in distant suburbs because you needed huge space to display cars. But these were inconvenient places to go to. So they wanted to open really aspirational stores in the heart of the city. The first such Audi store opened in Picadilly Circus in London. They had very few live cars in there but had digital screens that showed cars in actual size, so the customer could see and interact completely with them. They had RFID tags, so the customers could pick paints and change the car colour. Customers could build their own custom car on the screen and share it on social media and amplify it. It has been shocking how many impulse purchases of automobiles that cost over $60 000 has happened from people who did not leave the house to shop for a car. It was an unintended happy outcome.
Q. So has there been a measurable sales growth from these initiatives?
A. It's not consistent. It depends on what the starting circumstance of the store was. We have certainly had environments where we have seen more than 50 per cent lift. If the store was already in a great location but it did not have good feature displays, then we may have quadrupled traffic through these technologies. But sometimes it is not about extra conversion per visit . A lot of times, this technology is used for after sales service. It's about Customer life time value and getting them to stay loyal to the brand more often.
Q. How expensive is this technology?
A. It ranges from cheap to obscenely expensive. Not everything we demoed here is appropriate for every retailer. The giant screens are very expensive. They are not expensive to buy. They are expensive to install in a store and maintain and we found that they are so big that the content that I have on my website seen on a desktop does not look good on them. So I have to have a good budget to have good special content on them. People often budget to deploy these screens, but they do not budget to keep the content fresh and maintain them. So we only do it if there is a sustainable plan, and only advocate it for special purposes. For instance, if it is a big store, then we recommend using mobile technology at the front of the store and putting these giant monitors at the back of the store to make the customers curious and pull them to the back.
But then there are other cheaper technologies like beacons that are just small dollars. They interact with mobile phones and the app on them. Beacons are just $6 to $10. Then there is stuff in between like RFID - the tags are inexpensive, the readers are in the low hundreds of dollars. We also do smaller format digital signs like iPad type signs that are much more affordable.
Q. What about magic mirrors?
A. We do them. But we hate them. There are a number of problems in magic mirrors. For instance, how many dressing rooms do stores have? About 24? A good magic mirror is tens and thousands of dollars. Can you put it in all 24 of your dressing rooms? Most retailers just buy a few to create hype. Now we are adding cameras to the magic mirrors, and that's awkward in dressing rooms. We have just not moved the needle on magic mirrors. There are much higher ROIs (return of investments) from digital in the store than in the dressing room.
Q. What next?
A. I think the experiences are going to get better for the customer using the phone in the store. The phone recognizes that I am in the store and the experience changes based on my context. The social proof, the ratings and reviews allow me to see what I want as I browse through the stores.
Also electronic shelf labels are getting better. The eInk technology is improving. It's crystal clear and available in three colours and affordable. So instead of using 10,000 paper danglers and signs that are static and boring, I can have electronic shelves with dynamic data.