Many U.S. retailers may have taken a wait-and-see approach to it, but those who already launched click and collect services are benefiting from more in-store traffic, more chances for cross selling and better customer experience.
Reports of physical retail’s demise may have been greatly exaggerated: 90 percent of global retail spending is still in-store (eMarketer, 2017). But, even so, the sector needs to adapt – quickly – to increased digital competition spearheaded by Amazon as well as the new habits the firm has forged with consumers. Thanks to online shopping, customers now have instantaneous information, immediate service (a website never closes for business) and more choices at their disposal.
This is why retailers are putting their faith in a “Phygital” approach that combines the best elements of the physical, offline world with the digital, online world to create new types of shopping experiences and add more value for customers.
“The barrier between e-tail and retail is gradually breaking down beneath the weight of technological innovation and changing consumer behavior,” explains Mike Small, Chief Client Officer, Sitel Group. “It’s why every company is trying to strike the right balance between physical contact, emotional experience and online presence.”
Phygital can mean an approach that can be as innovative and immersive as that taken by Club Med. To get a genuine sense of what it will be like to vacation on one of its resorts, you can drop into one of its branches and via a VR headset take a virtual tour of any of its resorts – before booking your trip.
Likewise, at Sephora’s flagship New York City store, you’ll find tablets for sorting through the brand’s entire range of products, full size virtual mirrors for testing makeup looks and even social media screens where loyal customers are sharing their photos via Instagram.
The best of both worlds
Both concepts look to how digital can improve a shortfall in the physical store experience and are both proving hugely successful. However, looking at the situation form the opposite angle – how the physical can improve the digital experience – can be just as impactful for customers and just as good for companies’ bottom line.
Hence the growing popularity of click and collect services. Because, no matter how good web retailers get, until they have their own physical stores, they’ll never be able to deliver the same instant gratification that comes from not having to wait days for an order to arrive.
“Shoppers may have fallen for everything that is different about e-commerce, from round-the-clock information and service, to speed of use and size of product choice,” says Small. “Yet it doesn’t mean they have fallen out of love with the simplicity and emotion of purchasing a product in the real world. If anything, greater use of online retailers intensifies this connection when they experience it.”
Online doesn’t always deliver
Indeed, having to be at home in order to sign for a delivery is a major pain point in the online path to purchase. The latest PwC Global Consumer Insights report finds that 88 percent of consumers would be willing to pay extra for guaranteed same-day delivery. Little wonder that after testing deliveries by drone, Amazon has just announced a partnership with GM and Volvo in the U.S. that enables couriers to leave parcels in customers’ cars as a means of addressing this pain point.
Against this backdrop click and collect could well seem the obvious solution, especially when one considers that over 60 percent of consumers globally start the path to purchase online, researching products and influencer opinions.
Offering click and collect drives traffic to both digital and physical storefronts, as well as removes the delivery time pain point. While, in the case of apparel, consumers can also order in confidence knowing that they can try on the items in question in-store during pick up.
Click with confidence
UPS noted in a 2017 study that consumers are heavily influenced by how easy it is to return a product when it comes to choosing an online retailer – 82 percent of respondents said they’d buy from an online retailer if they could return an unsuitable item in-store.
And, when in store, it’s easy to entice shoppers to keep shopping. According to the International Council of Shopping Centers, 61 percent of consumers that use click and collect also made additional purchases when arriving in store.
The final benefit is that it significantly reduces a retailer’s delivery and logistics costs. Last-mile shipping is the most expensive and complex element of the delivery process and is why Walmart, a retailer that is betting heavily on click and collect, is offering its customers discounts for items they buy online and pick up in store rather than have delivered to their home.
However, properly implementing click and collect into your business strategy calls for an omnichannel approach. You need a single view of your customer, whether they’re online or in-store.
A seamless experience
“Customers travel back and forth between the digital and physical spheres and in doing so expect the brand relationship to be consistent in-store, online or when calling after-sales service,” explains Small. “Crucially they also expect this brand relationship to feel exclusive, personal and to incorporate all previous interactions; therefore, it’s no longer good enough to simply be ‘present’ across the different channels; brands must be proactive.”
Recasting the role of in-store advisors
Without an omnichannel view, in-store sales assistants are at a huge disadvantage. They need a single view of a click and collect customer – including purchase history – to best serve his or her needs.
“There is a whole art to being able to switch from digital to physical, and then back again, when dealing with an in-store customer,” says Small. “Assistants need access to company data and inventory as well as customer history to not just deliver a perfect brand experience, but to seize the opportunity to up- or cross-sell.”
Most customers that experience a fluid click and collect service also buy other products during the same in-store visit.
“That’s why at Sitel Group we are reimagining the role of a sales assistant as an ‘enhanced connected sales advisor’ and have developed the required training methods, through our Learning Tribes ed-tech and training company,” Small concludes.
But as well as helping retailers ensure that their enhanced sales advisors are at the heart of the in-store customer experience, Sitel Group can help brands transition to an omnichannel retail approach and to take full advantage of the opportunities of the Phygital retail era
For more information, download the white paper – Phygital Retail: Fact or Fiction?