Guest post written by Hil Davis
Hil Davis is co-founder of the online men's retailer J. Hilburn.
E-commerce and mobile commerce have dramatically changed the way brands reach customers, making it faster and easier for consumers to make purchases on the fly while avoiding the hassles of going to the store. This offers tremendous gains in convenience, but something crucial is lost when you remove the human element from the shopping experience. The mainstreaming of e-commerce has caused many of us to grow accustomed to sacrificing the physical benefits of traditional retail in pursuit of simplicity - but this is not the ultimate solution.
With more and more people seeking alternatives to bricks-and-mortar retail, now is the time for development of new technologies to enhance the online experience. Here are a couple of reasons why brands should be paying attention:
- A recent study from Internet Retailer projects a doubling of mobile commerce sales in 2013
- eMarketer predicts that in the apparel and accessories category alone, e-commerce sales in the U.S. will grow to $224.2 Billion by the end of 2012, up 15.4% since 2011
- Brick and mortar retail giants like Macy’s and Nordstrom are ramping up their efforts to integrate digital technologies with in-store operations in response to significant losses of in-store sales to online shopping platforms.
We’re now living in a time when competition is driving brands to innovate, giving their customers better products, customizable options and more purchasing channels to choose from. As an alternative to bricks-and-mortar retail, e-commerce has ample benefits, but it is still an impersonal channel for buying products. To take the online shopping experience to the next level, human engagement must be added back into the equation.
How is this possible? By using technology to harness the advantages of person-to-person contact.
To escalate the impact of e-commerce, there are multiple ways that businesses can integrate personal interactions with digital technologies. One strategy is to create mobile points of sale within retail stores by equipping sales associates on the sales floor with tablets for easy online purchasing. This is a viable solution for stores losing sales to potential customers who browse in-store but end up researching products and eventually buying through online-only retailers such as Amazon. By investing in mobile app development and employee training, it becomes possible for retailers to ensure that the physical benefits of stores are not lost to the convenience of instant, no hassle online shopping.
At the next level, businesses can bypass offline retail altogether by selling direct to the consumer. The costs of establishing and maintaining stores or alternatively selling through third-party distributors create inefficiencies and ultimately cut into a company’s bottom line. Until now retail stores have been essential for customer acquisition, but as consumers are spending more and more time browsing online and becoming increasingly open to alternative modes of purchasing, there is a real opportunity for innovation through e-commerce and direct sales.
The place where there is perhaps the highest potential for innovation is in the apparel industry, where the barriers to online shopping tend to be particularly high. Technologies are making it possible for businesses to track purchases at the individual level, virtually bringing a customer’s closet online. Once you can understand consumer preferences, record purchases, and keep track of sizing and fit profiles, it becomes possible to better predict what someone will be most likely to buy in the future. This alone has the potential to drive sales, but the challenge of replacing the physical experience of trying out a garment still remains. The ability to try clothing on, feel fabrics and examine details up close simply can’t be replicated through an online-only model, without the burden of dealing with returns.
Here is where adding a human element can be most beneficial. Beyond tracking consumer habits digitally and using data generated recommendations, brands can target sales even more effectively by offering a stylist or sales associate to provide advice and make one-on-one personal connections with the customer. By arming employees with data-informed tools to help customers find what they’re looking for, you can add value on top of the personal service that has been the cornerstone of retail sales for longer than most of us can remember. This strategy can be applied through in-store mobile points of sales, and also through a direct to consumer model that bypasses retail stores altogether.
In some cases direct sales has earned a weak reputation, while on the flip side Warren Buffett has called his stake in direct sales company The Pampered Chef one of the best investments he ever made. Regardless of what you think about the history of direct sales, this model now has potential to tap into customer demand for alternative shopping channels and drive sales more efficiently than traditional retailers. In fact, with the technologies described above, it is becoming possible to offer customers a more convenient, personalized and affordable shopping experience than ever before.
The benefits to the consumer are clear but the potential gains for companies are equally if not more profound. In addition to keeping distribution costs for the company relatively low in large markets, this model makes it possible to open sales channels in small to mid-sized markets where the costs of opening and running physical stores may not be economically justified. The direct sales model also lends itself to fostering personal relationships between sales associates and their clients, creating brand loyalty and opening up opportunities for expansion through networking and word of mouth. Add to the equation mobile sales devices and applications to manage individual accounts, and a direct sales force can be empowered to help customers choose items that suit their wants and needs, make references to past purchases, experience products first hand while visually browsing alternatives online, and make purchases in real time at the click of a button.
There may be countless other ways that companies can creatively tie technology to personalized shopping experiences, and as the demand for new and better purchasing options continues to grow, the worst choice may be stick with what has worked in the past. All things considered, brands that either fail to tap into digital tools or rely too heavily on them stand to fall behind the next wave of innovative retailers.
