September 20, 2018

The days when we regarded bricks-and-mortar shops and digital commerce as diametric opposites now seem very long ago. After a decade during which the digital economy has penetrated ever-deeper into our lives, it is clear that physical retail has not disappeared but is very much still with us.From supermarkets to shopping malls, from local shops to in-store pick-up of online orders, retail businesses are constantly re-aligning to suit the latest modes of consumption driven by the new technologies and the new ways of doing things which they engender. Moving from one new paradigm to another, the retail sector has proved over time to be extremely adaptable. And still today, bricks-and-mortar stores are undergoing a further metamorphosis, developing a new ‘Smart Phygital’approach that places the Customer Experience at the centre of everything.

Gamification and optimisation of space: focus on CX

Having been badly shaken for a while by the advent of e-commerce and Internet shopping sites, bricks-and-mortar retailers have now managed to incorporate the best aspects of the digital approach so as to create an attractive new in-store experience, optimising the shopping journey and giving a whole new feel to the purchasing act. Most high-street chains have now grasped the fact that it makes no sense to set the physical retail process against online shopping because the two types of sales are in fact complementary. They have therefore largely opted for a multichannel strategy which enables them to offer a 360° service to customers – at the store, via e-commerce sites or on a smartphone. This is certainly the case with the two French retail giants: Monoprix recently linked up with Amazon; while Carrefour has just taken over FoodTech firm Quitoque, which specialises in delivering baskets of food for cooking to a particular recipe. Moreover, these digital channels have become progressively integrated into bricks-and-mortar outlets in a ‘smart’ way, offering innovative new services and providing a more engaging Customer Experience. The ‘phygital’ empire has definitely arrived.

In addition, high-street chains are now increasingly looking to create personalised in-store customer journeys by gamifying the spaces with spectacular Augmented Reality or Virtual Reality functionality or interacting directly with the customer via his/her smartphone. This enables the retailer to expand the sales surface, raise the profile of the product and engage more closely with the customer, turning product discovery and purchasing act into a form of entertainment. At the same time, storytelling around the product image and brand image is becoming an essential element.

In 2017 BNP Paribas Cardif and Cardif Romania have joined their forces to create a serious game on Theft&Damage insurance. This initiative was launched with our partner Carrefour in Romania. Thanks to Virtual Reality, the player finds him/herself in a virtual park where he/she has to protect his/her phone from breakdown, damages and theft dangers. In the end, customers were invited to speak with commercial teams to get more information and subscribe. More than 3000 players had the chance to test the serious game in only 3 months. This win-win project with our partner Carrefour is a good example of how technology can enhance customers’s journey.

In addition to creating a fun aspect that helps brands to engage with the customer, this approach also enables retailers to optimise the available space at their sales outlets. However, while numerous experiments of this kind are currently being carried out, Matthieu Soulé, Deputy CEO of L’Atelier BNP Paribas Americas, underlines nevertheless that “these mechanisms haven’t yet really become a regular habit. We’re just at the very start of the phenomenon. Today we mainly use smartphones because all these connected objects and other digital devices that are now being tried out are rather complicated and are more about marketing and in-store demonstration than indicative of a real revolution in the way a bricks-and-mortar store operates.”

A new CX that gives added meaning to consumption

In fact, more important than the experimentation aspect, sales outlets most of all need to rediscover their social side, becoming a meeting point with the emphasis on fun as much as business. Above all, it is vital not to reduce the Customer Experience to a simple purchasing act. Shopping ought to be a pleasure. Accordingly, digital tools can help to orchestrate these different aspects of the retail world by organising different types of activities around the products. In a nutshell, the retail store of the future is likely to be a cross between sales outlet, fablab, coffee shop, amusement park and interactive museum. Matthieu Soulé points out: “Pop-up stores have shown that while this type of physical experience works well for certain concepts or certain brands, it’s ephemeral rather than really sustainable.” The experience will therefore need to go beyond the actual product and directly touch the customer and his/her ever-more-complex needs and expectations.

Today the customer has become a powerful player in his/her own consumption and is now much more demanding in terms of the management of his time and money. The customer-centric shop must therefore be able to respond in a personalised way to these demands by offering a range of activities that go beyond mere sales. US giant Target has grasped this. The Target Open Houseis an innovation venue where customers can test out new products and also attend a range of events and workshops, thus creating a commercial venue which sets out to augment the products and the overall offering from a customer point of view. Rather than merely piling up an array of digital tools at a store, the idea here is to turn the sales point into a versatile, customised, connected services hub.

A low-profile payment process

Meanwhile, the bricks-and-mortar shop can still learn a lot from online commerce, especially when it comes to financial services. By digitalising both the shopping basket and the payment and linking them directly with the services and activities on offer, the shop of the future will minimise or ‘hide’ the less pleasant aspects of shopping, such as the moment when you have to line up at the checkout. Which makes us think immediately of the checkout-free stores, a cross between the physical and digital worlds, introduced earlier this year by Amazon Go. Says Matthieu Soulé: “Clearly, this Amazon approach pushes the concept to the extreme, but it’s not unreasonable to imagine intermediate models where the financial services might not disappear entirely but will nevertheless melt into the overall customer experience.” It is precisely with this kind of thing in mind that US bank Capital One launched its own chain of snack restaurants, called Capital One Café, where customers can meet up, chat and obtain all kinds of information about the bank’s services. This tech-based, low-profile approach is intended to help streamline the provision of products and services and make the customer journey as natural and easy as possible.

All these new ideas serve to reorient and redefine the consumer experience. By emphasising the moment rather than the actual product or service, these players are reintroducing a new element that is absolutely indispensable to commercial relations: the human touch. After all, whether we are talking about financial or commercial transactions or inter-personal communication, it is basically interaction between people that underpins our society. Matthieu Soulé stresses that “one of the great benefits of bricks-and-mortar shops resides in the human touch – and the advice – we get from the salespeople. Their personal remarks are just as good as, or even better than, those we obtain from the algorithms developed by online platforms. And it will always be much nicer to receive face-to-face recommendations from a human being than by scrolling down a screen.” It is this type of human interaction, which is more profound and perhaps more rewarding than the actual business transaction, which it is so vital to re-establish. Let’s hope that ‘smart phygital’ will enable us to move in this direction!

Written in partnership with l'Atelier.