Digital Retail – Perspectives for the Future

Digitalization is on everyone’s lips

Retailers have been dealing with this topic at the point of sale for many years. One is proactive, the other reactive. At the end of the day, however, the entire stationary retail sector is repeatedly faced with the challenge of being more than just an alternative to online shopping. The ever new innovations and possibilities of digital development are driving retailers and retail brands ahead. Although most people are aware of the need to act, they often fail to select the right technology and implement it. Why?

If a technology has just been implemented, it is already outdated, no longer compatible or capable of expansion. There is a lack of holistic concepts that can be integrated to ensure a self-contained customer journey both online and offline.

In order to master this complex challenge, extensive expertise from a wide variety of fields is required. Analysis, strategy, project management, design, technology – each discipline brings its own specific challenges. It is not easy for retailers and marketers to keep up to date with the latest developments and to keep an overview. What are meaningful perspectives for the future and what are only temporary trends? This is where experts are needed who keep a constant eye on current developments. Holistic systems are created in networks with professional and specialized agencies and partners, from strategic conception to operative implementation and maintenance. Syndicate, wedo sales and SonoBeacon have made this challenge their task in order to jointly make retail brands fit for the future.

Connecting technologies

“Within the next three to five years the shopping world will change radically again”, says Philipp Hennig, founder and CEO of wedo sales GmbH. “Experience plays a central role here. The inner cities will change, stores will become meeting places”.

The young entrepreneur has specialized in digital signage and offers his customers extensive support. From the concept to the helpdesk, Hennig and his team look after their customers during the digital transformation.

“It is important to approach projects purposefully and with a view to the big picture right from the start. It’s about linking the right technologies and using them sensibly for the customer,” explains Hennig. “With our experience and affinity for merchandising, measurability, performance on the ground and project management, we can identify our customers’ weak points and develop individual solutions. Communication, for example, is a problematic factor. If people prefer to communicate via WhatsApp or Social Media Messenger instead of going to a café or restaurant, completely different levels and paths are created”.

As customers’ lives move more and more into the digital realm, it becomes more and more difficult to reach them offline. Understanding online and offline behavior and the respective needs of customers from both worlds and bringing them together seamlessly is therefore a major challenge for retailers.

Repositioning brands

The case TOYS ´R´ US, for example, shows how fatal the consequences can be for retailers if they do not act correctly. A 70-year-old traditional brand, formerly the world’s largest toy retailer, is insolvent and is closing all 880 stores in the USA. It was not acted in time and not purposefully invested, which led to the fact that on-line trade made the enterprise redundant. Of course, TOYS ´R´ US also has an online shop, but that alone is not enough. Nobody associates the brand with online shopping. Who hears TOYS ´R´ US, thinks of gigantic halls with meter-high shelves full of toys – and exactly there lies the serious error.

In order to master the digital transformation as a retailer, the brand must be realigned. If you want to be digital, you also need a digital image. If customers look at products in the store, then go home and buy online, then retailers should not complain about it, but rather ensure that customers end up in their own online shop and not at Amazon, through strategic brand positioning and intelligent linking of e-commerce and retail.

A bridge between online and offline

Technologies play a central role in this linkage. E-commerce has and will continue to change customers’ expectations of stationary retail considerably. Extensive product ranges are available to them on the Internet. In addition, online shops are no longer just used for shopping, but also serve as information platforms. Users are usually provided with extensive content relating to products and brands.

So far, e-commerce has been ahead of stationary retail in providing such additional services – this has to change. “We want every product to be able to speak,” says Thoralf Nehls, founder and managing director of SonoBeacon GmbH. Together with the Fraunhofer Institute for Secure Information Technology, Nehls and its partners have developed a new beacon technology.

SonoBeacon are transmitters placed in the store. They connect to the mobile devices of customers moving around the store, localize them and thus enable personalized communication. For example, customers can receive information about a product they are currently looking at or individual offers can be made.

SonoBeacon send an inaudible acoustic signal that is detected by the microphone in a smartphone. An app then translates the transmitted signals into the desired content: video, audio, image or text.

Seamless Customer Journey

In digital retail, the customer journey must be rethought. It does not end with the product purchase in the store, but leads the customer there again and again. The store is the central touchpoint for the brand experience.

In order to lead the customer there, attention and curiosity must be aroused through targeted communication and relevant content. The selection of the right channels and content is particularly important. Brands must know exactly how their target groups behave on the individual channels, because if the content does not meet the expectations of the target group, communication is ineffective.

Real and virtual brand experiences meet in the store itself. Emotionalisation is the key to success. Retail concepts that use customer-oriented technologies can create both real and digital emotional experiences in the store itself.

These experiences lead to a high level of involvement. Even after visiting the store, the customer remains in touch with the brand, develops a high level of brand loyalty and will shop in the store again.

The customer remains king

“There are countless technologies and trends, but not all of them always make sense. Customer Centric Thinking is the key word here. Digitization at the POS is not an end in itself, but a service for the customer and must always create added value,” explains Heiko Hinrichs, member of the board of Syndicate Design AG, which has been implementing cross-industry branding and design projects with a focus on CI/CD, retail and packaging for its customers for over 25 years.

“With our projects and especially in retail, we see that there are still many inhibitions and uncertainties for customers. They all know that they have to act. But digital transformation is a long road that costs a lot of money and can lead to a lot of mistakes.”

Customers have ever higher expectations and demands on brands and trade. Brands and retailers need to focus and position themselves more strongly on becoming part of their target groups’ communication and everyday life.

Information, interaction, surprise, involvement – in order to create and share individual shopping experiences, the target groups and their behavior must be precisely analyzed. Digitization must always be oriented towards the customer and the customer journey must be designed according to the customer’s personal requirements.

The fact that this is not an easy task shows that even a technology giant like Apple is failing in its implementation. If customers with products bought online in the store are completely on their own, because the responsibility and know-how of the employees is limited to the store space, one cannot speak of customer-oriented retail. This separate consideration of online and offline leads sooner or later to negative associations with the brand and this must be prevented at all costs.

Shaping the future together

“By cooperating with partners such as SonoBeacon and wedo sales, we can offer integrated overall concepts and thus optimally accompany our customers through the digital transformation. The goal must be to no longer view online and offline separately. The customer does not want to have to make a decision. We want to combine the advantages of both worlds – the diversity, comparability and information from the online world and the experience factor and proximity to the customer from the offline world,” explains Heiko Hinrichs.

To achieve this, retailers must be relieved of their fears of change and loss of control. Retailers have to be aware of the fact that bringing competencies together is the right approach. Those who are able to offer complete packages from strategy to conception, design, technology and project management are also able to successfully guide their customers through the digital transformation.