Effective with technology in the store: Focus on the purchase process

An abundance of technologies is entering the physical retail. Digital displays, interactive screens, beacons, apps, virtual reality and augmented reality; they all promise the retailer success. But how do you determine whether these technological innovations really add value? The customer's purchase process seems to offer handles

An abundance of technologies is entering the physical retail. Digital displays, interactive screens, beacons, apps, virtual reality and augmented reality; they all promise the retailer success. But how do you determine whether these technological innovations really add value? The customer's purchase process seems to offer handles.

The purchasing process is often described in marketing as a series of four steps: emergence of a need - search for information - evaluation - purchase. For every company that sells products, it is important that the customer is helped as well as possible by these steps. This means in practice that you get into the skin of the customer and you wonder what he / she needs to make a decision. This is not so much a sales-driven approach with actions and offers (push), but much more about the use of a palette of elements that provide a customer-oriented service (pull).

Consider matters such as extensive product information, a wide range, being able to fit / try out products (clothing), product personalization, advice, and sufficient possibilities to pay. The fact that such a service is working is proving online. With a wide range of website features, functions and applications, webshops guide their visitors through the purchasing process as well as possible. This leads to a higher degree of customer satisfaction and thus stimulates the conversion ratio. Now physical stores are not the same as webshops. But it does seem that stores with innovative technology are going to guide their customers in a similar way through the purchasing process.

The store as a decision support system

The idea of ​​using technology to support customer decision-making has its origins in information science (Ives and Learmonth, 1984; O'Keefe and McEachern, 1998). This involves talking about a customer decision support system (CDSS) where the essence is that technology is used in such a way that optimum support is created during the phases of the purchase process. This support aims to give the customer both the right information and knowledge about the products (cognitive) and let him experience products in such a way that he feels good (affective). The idea is that thanks to this support the customer can make a good purchasing decision. If we apply the CDSS principle to the physical store on the basis of a number of emerging technologies, the following overview is created:

PhaseTechnologyIllustration
Genesis needDigital screen

Beacons (icm app)

Lighting systems / LED technology

Show products and offers (shop window, inside shop).

Send message / offer to customers in (near) the store.

Attract and generate need attention of visitors and passers-by.

Search for informationInteractive screen / tablet

Augmented reality app

Shopping app

Give store visitors the option to search for products and to consult information.

Show enriched product information

Unlock additional product information

EvaluationInteractive screen / tablet

Virtual full length mirror

In-store assessment system

Select and compare products

Passes and similar products (clothing and fashion)

Customers can consult product ratings and reviews (eg Trylikes)

PurchaseContactless payment methods

Self-scanner

Order column / order hub

Customers can pay quickly and contactlessly

Customers can pay for products themselves

Customers can place an order online at the store

The table shows that the store can provide support with innovative technology during every phase of the purchasing process. This support has many of the advantages that the customer is accustomed to online (a lot of information, interactive, immediately available, visually strong) and on the shop floor also has the advantage that it does not depend on the effort and expertise of the staff. This way customers can be effectively guided towards the purchasing decision. That this can actually work is shown by a recent study that we carried out at the Eye Wish in the Beethovenstraat in Amsterdam. In the summer of 2017, an interactive mirror was installed with which customers could try out and compare eyeglasses. Through a survey among 105 users of the interactive mirror, we measured the extent to which this technology contributes to making a purchasing decision. The results showed that thanks to the mirror, customers gained more knowledge about the products (cognitive) and get a better feeling with the products (affective). The result was that customers could evaluate the products much better. The knowledge and cheerful feelings provided by the interactive mirror turned out to be no less than 41.6% of the evaluation level, with the evaluation convenience in turn influencing 16% of the purchase decision to be taken. These outcomes underline the potential of the store as a decision support system.

More focussed on technology

A challenge that many retailers have to deal with is the choice for the technology itself. Because how do you choose from the ever-growing range of innovative solutions? A cost-effective calculation is obvious, but is not always possible due to the innovative nature of the technology. Yet there are a number of things that retailers can take into account. Firstly, this is the extent to which the store currently leaves opportunities unused to help customers through the buying process. Are the products of the retailer insufficiently brought to the attention of passers-by and customers? Is there a shortage of information about the products and how to use them? Or do visitors have sufficient information but should they be helped a lot better when making a final choice? Depending on the situation, the focus can be on specific types of technology that provide the necessary support.

Secondly, we call the type of product. This makes us not so much interested in the product itself, but more so in the way the customer goes through the buying process to purchase the product. This differs substantially between products and has major implications for the need for purchase support. For example, the need for information, advice and personalization is greater during the purchase of services than during the purchase of tangible goods. And when purchasing hedonic (fun, enjoyable) products, the need for a large and unique range is greater than with the purchase of utilitarian (useful, necessary) products (Verhagen, Boter, and Adelaar, 2010). The retailer can take this into account by giving priority to technologies that meet these needs, depending on the type of product he sells.

Third and last we call the competition. More and more retailers are adopting innovative technology to support purchasing processes and it is often these retailers that show a rising sales trend (Verhagen and Weltevreden 2016). This does not mean, however, that a retailer must by definition be an early adopter when it comes to the use of innovative technology. This is often expensive and is too early for many customers. However, it is wise to keep a close eye on which types of technology are increasingly used by other retailers. Customers will gradually become accustomed to the usefulness and ease of use of this technology and will reach the retailer with the same expectations. By taking a targeted approach to this, not only the support of the buying process will be further improved, but the retailer will also remain more competitive.

*) Resources used

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Verhagen, T. & Weltevreden, J. (2016), Retail & Innovation: The effect of technology in your store, Frankwatching, 14 October 2016, https://www.frankwatching.com/archive/2016/10/14/retail -innovation-the-effect-of-technology-in-your-store-research /

This article was written with Anne Moes

Thanks

The authors thank the Shopping Street Innovation Lab, Eye Wish in the Beethovenstraat, MemoryMirror, and Q & A for their support of the research.