The following is synthesized from a talk by VELVET and Carlipa, a technology company, about in-store digital luxury experiences. The talk took place in Shanghai on March 31, 2016 and is part of a bi-monthly morning series in partnership with our strategic partner, XNode Co-working Space and Startup Accelerator.
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One of the biggest challenges in a digital age is recreating the in-store experience online and delivering brand value across a fragmented experience.
The digital experience is important because it is about business.
While a lot of the projects are linked to improving customer experience in store and to providing an interesting and outstanding experience, one of the big subjects is also to solve retail issues. Digital in-store experiences are not limited to communication, they also have a direct impact on sales.
Digital in-store experiences contribute to sales value, greater frequency of purchase, and customer loyalty. The digital customer experience is about business.
So what constitutes good customer experience? It’s not something you can measure, it’s not a metric-–it’s a perception. The only way to know is to ask the customer.
According to Forrester Research, there are three elements that are crucial for building customer experience. A brand should deliver value by bringing something useful that meets the needs of customers. A brand should delivery it in an easy way, and here technology factors a great deal. These two elements are very rational. The third element is extremely irrational and many people forget-–the experience needs to be enjoyable. So these are the three: useful and easy (rational) plus enjoyable (irrational).
The next idea I would like to share with you before starting is the fact that when we interact with clients through different channels and touch points, the interaction will set the expectation. Particularly with luxury, the promise and expectation is that customers will have an incredible experience. So you have all the traditional channels–-TV, ads, print, radio, email, web, digital–-that will set the expectation. But you need to deliver the promise. The higher you set the bar, the greater your deliverable becomes.
Some channels will deliver the value. The in-store experience, the way the manager welcomes you–-all of this delivers value. Furthermore, customer perception will be hard to shift once expectations have been set. The more you meet these expectations, the more you create incredible customer service.
Lastly, let’s take a look at the role of technology within all of that. So we return to the store, because this is the topic of today. We have drafted a value chain and there are three elements technology contributes at the point of sale. First is foot traffic. More traffic means more business. The second element of value is the experience at the point of sale, be it product information, engaging the manager, browsing the catalogue, etc. The third element is the sales conversion, to help conclude sales more efficiently. For example through mobile payment, so a customer doesn’t have to line up to make a purchase. Of course all the tools that lead to loyalty are also here.
That’s one layer. There are actually three layers.
The second layer is capturing foot traffic, which is usually very qualitative. The technology will help to capture the data and to target new customers to deliver personalized offerings.
The third layer involves how technology has the potential to empower staff. At the end of the day, most of the experience will be delivered by the staff, by the beauty adviser, the store manager, so it’s not just about technology for the customers, it’s also about how it will help the sales deliver better service. Technology delivers value to all three layers.
In conclusion, digital in-store experiences can improve overall customer experience and help resolve customer frictions. It is also important to remember that brands should deliver unique messages tailored for local market specificities while remaining true to the brand DNA. Lastly, content is critical to the success of in-store digital experiences. Content must be consistent, useful, qualitative and updated on a regular basis.
A PDF of the presentation containing case studies is available upon request.