Recent Posts

Posts by Topic

see all

Attn. Retail Marketers: In-Store Shoppers are Changing. Are You?

by AirTightTeam on May 16, 2013

To say that mobile technology is impacting brick-and-mortar retail is akin to proclaiming at the turn of the last century that the motorcar just might change the horse-drawn carriage business. Shoppers today are empowered by technology to gain the advantage at every turn, whether it’s using a smartphone to find the best price for the same product online, locate out-of-stock sizes or colors in the store next door, or learn what their friends or other customers had to say about a product before they buy.

Retailers have two choices.

They can pretend this isn’t happening and actively try to discourage these new consumer behaviors, like not offering in-store Wi-Fi for fear of increased showrooming (see Free Wi-Fi is a Win-Win for Retail Marketers and Customers ). Or, they can listen to their customers and do everything in their power to meet their changing needs and expectations.

IBM Retail Study: From Transactions to RelationshipsSo what do these empowered consumers want?

According to the recent IBM study, From Transactions to Relationships: connecting with a transitioning shopper, what they want is a personalized in-store experience that not only mirrors the experience they get with online shopping, but is seamlessly integrated with their on- and offline shopping habits, preferences and history.

“Consumers are increasingly gravitating toward shopping experiences that allow them to be served according to their individual preferences,” states the report written by Kali Klena and Kill Puleri.

They then go on to outline the three key factors that retailers must address in order to capitalize on the changing behavior of the transitional consumer:

1. Store dominance decreases in an omnichannel world

“The long-standing center of retail commerce, the brick and mortar store, is rapidly losing its appeal as customers turn to convenient online channels for their purchases.” This is not to say that the physical store will soon be going the way of the horse and buggy. While e-commerce is a legitimate threat to physical retail, it still represents only a tiny fraction of the overall retail market -- 5.4% of total revenue to be exact.

No, the real threat to brick and mortar is decreasing customer loyalty in a world rich with choices, literally at the consumers’ fingertips. According to the IBM study, while 84 percent of respondents made their most recent non-grocery purchase in-store, only 56 percent said they were sure to return to the store for their next purchase.

2. The impact of showrooming

Showroomers—those who use mobile devices in-store to research and often purchase lower-priced items online—may be a small (but growing) segment of the consumer population, according to the IBM study, but they have a grievous impact on in-store revenue. Showroomers made nearly half of all online purchases in the retail categories covered by the IBM study. Most chilling: twenty-five percent said they initially planned to buy in-store, and 65 percent plan to buy online for their next purchase.

showrooming figure 4 from IBM Retail Report

3. Consumers desire more meaningful retail connection points


In this burgeoning world of location tracking, web, retail and social Wi-Fi analytics, one might think that consumers would be overly sensitive to a loss of privacy. On the contrary, they want retailers to know even more about them and their buying preferences. In fact, the IBM study states that

“the majority of shoppers were willing to contribute 20 minutes on average to help a retailer better understand their desires in order to provide them with more meaningful offers based on their past purchases.”

The key is to make sure you are using the data you collect to treat customers like individuals, not as a market segment, by providing personalized offers, tips and information.


What to do about it

The IBM study provides many more insights and next steps for retailers, and we highly recommend you read it. One tip that we at Airtight Networks agree with wholeheartedly:

AirTight Networks on-demand webinar“Technology will play a key role in helping retailers use this trend to boost loyalty and sales. As retailers start to offer customers free Wi-Fi access in their stores, they will have the opportunity to engage with customers while they are browsing the displays, by branding their Wi-Fi to drive shoppers to their own websites and services. And if customers give permission for their location to be tracked via their smartphone as they sign on to the Wi-Fi network, retailers can use analytics to make sense of this data and provide shoppers with personalized deals to drive conversion.”

Parting Thought

horse-drawn buggies riding into the sunsetIf you’re still worried about embracing the very technology that is threatening your business, I leave you with the story of William Durant, co-founder of General Motors and Chevrolet. Initially, he was highly skeptical of the gas-powered “horseless carriage,” thinking them so dangerous he wouldn’t allow his daughter to ride in one. He wasn’t alone. By 1900, there was an enormous public outcry for safety regulations. Rather than wait for the government to intercede, Durant embarked on a mission to build the safer machines consumers were demanding. He succeeded by listening to transitioning consumer expectations and embraced technical innovation head on. (For the record, prior to the revolution he helped bring about, his Durant-Dort Carriage company was the leading producer of horse-drawn buggies in the world.)

Additional Information

  • AirTight Retail Leadership
    • AirTight Launches Retail Wi-Fi Analytics Engine for In-Store Business Intelligence and Customer Engagement
    • AirTight Launches Social Wi-Fi; Integration of Social Channels & Customized Captive Portals Merges Social & In-Store Engagement

Topics: WiFi, Analytics, Compliance, Social, Cloud, Managed Service, Privacy, 802.11ac, WiFi Access, Retail