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Did digital kill the retail store?

If you assume bricks-and-mortar retail is on the way out in favour of ecommerce and digital experience, you’d be mistaken.

Retail is definitely evolving fast, especially since the pandemic, and digital innovation has a role to play. But it’s not usurping traditional in-store retail. Just ‘augmenting’ it.

According to the 2022 KPMG retail report, there’s an “inextricable link between operational digitization, customer experience, and growth”.

But the figures also suggest that, while customers would like online and bricks-and-mortar retail to be integrated for ease and flexibility, the physical retail experience is far from dead.

  • 73% of Aussies prefer to do their shopping in bricks-and-mortar stores
  • Since the pandemic, 34% of consumers have a new appreciation for touching, feeling or trying products in store before they buy
  • 48% go in store for customer service or help with a product they couldn’t get online
  • 51% are more loyal to retailers with both physical and online options
  • 94% of businesses surveyed plan to invest further in digital transformation

So what does ‘digital transformation’ look like now?

Here are a few of the ways digital and tech has been used to improve, rather than replace, the in-person retail experience.

1. Smart checkouts and self service

This one’s a no-brainer. Flexible payments and self-service with digital integration was picked out in the retail report as a key feature of better customer experience post-pandemic.

From offering enhanced payment options, including contactless and buy-now-pay-later, to using the digital POS to get customer feedback and even giving online customers the option of returning in-store (and bringing them into the brick-and-mortar venue), there are ways of integrating digital into the ‘smart checkout’ to create a smoother customer experience.

In fact, ‘smart checkouts’ and in-store tech were a key feature of our design for Keells’ premium Iconic stores. Setting the standard for customer experience in Sri Lanka, the design incorporated their slick self-service checkouts and scan-and-go units, as well as refill machines and self-weighing scales. It all helps maintain the Keells reputation as the retail innovation leader in Sri Lanka.

2. QR codes

One thing the pandemic has done is upskill a large number of consumers in the use of QR codes in their everyday lives.

So what does that mean for retail?

Well, they can be a tool for customer retention and sales. Let’s say a product has run out on the shelves. Using QR codes to prompt customers to search your online catalogue or the inventory at other store locations means customers can still buy from you rather than seeing an empty shelf, shrugging and heading to a competitor who has stock to-hand.

They can also be used to advertise a promotion or discount to entice people in or provide a bit of extra info around a new product. Placed on the shelf with the product and price tag, a QR code can be used as a ‘Learn More’ CTA for curious customers. It can provide detailed info, without cluttering the retail signage.

But it’s not just on the retail signage itself that QR codes can be useful. When used on packaging, they can direct customers to the brand website, social media, or anywhere that creates a customer connection to the brand story or product. The QR codes on our Nosferatu distillery labels lead consumers straight to the website, so they can dive deeper into the process and story behind the product – important selling points for a craft spirit.

3. Augmented reality (AR)

At its best, it’s a kind of digital ‘try before you buy’.

IKEA has been on the AR bandwagon for a few years now, with their IKEA Place app. This gives customers the opportunity to position virtual IKEA furnishings in their home before purchasing.

Makeup companies like L’Oreal offer shoppers the chance to try on cosmetics using an AR filter. No more covid-unsafe colour swatches smeared on the hand from tester products. Beauty retailers, including some Priceline stores, have been using this feature to add to the customer experience.

While the phenomenon of ‘Virtual changing rooms’ for clothing is mainly an area for online retailers right now, this could be leveraged for brick-and-mortar stores where stock is not available to try on, supporting customer retention.

Where to next?

A recent TikTok of a helpful robot called Tory cruising through Kmart aisles has garnered a bit of online attention. This self-navigating stock-taking bot uses RFID (radio frequency identification) technology to address the customer pain point about product availability.

It’s a cool example of how tech can add to the retail experience – rather than complicating it.

But there are limits. For example, despite optimistic talk of using facial recognition for personalising an in-store experience – like browser cookies in online shopping – in practice, this throws up public concerns around privacy and information-handling.

It all comes back to what the customer really wants from your store – and whether you really need an app for that.

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