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Tablets and Smartphones Transform the In-Store Customer Experience
Retailers hope to give consumers new incentives to shop at brick-and-mortar stores
For the rest of the January 2012 issue of CRM magazine please click here
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It's no secret that lower prices and fast deliveries have made online shopping an increasingly attractive option for consumers. With the advent of advanced mobile devices, such as smartphones and tablets, shopping online has become even more convenient.

Brick-and-mortar stores, especially department stores, specialty clothing retailers, and quick-service restaurants, are fighting back.

Apple's iPad and the Amazon Kindle Fire, with their lower price points and smaller form factors, are making it possible for retailers to arm their employees with tools like these to transform the in-store experience, according to a recent study by research firm IHL Group.

"A complete transformation of the customer experience is happening at stores and restaurants," says Greg Buzek, president of IHL Group. "With a tablet, sales associates can pull up your purchase history, help you compare options, and check out items, while customers can place their orders on tablets as soon as they sit down in a restaurant."

In the quick-service restaurant industry, mobile devices will lead to more efficient turnover; restaurants that have deployed mobile devices have seen a 25 percent increase in the number of times they can turn the table, thus serving more customers every shift, the IHL study found.

The study reports that by 2015, more than 2.7 million tablets a year will be shipped for use in North American retail and hospitality centers, representing an increase of 450 percent over the next four years. Specialty retailers will deploy nearly half of all of the tablets shipped to retail.

Handheld devices are also expected to reduce the shipments of traditional point-of-sale devices by 11 percent in 2015 and by as much as 20 percent in some segments. By 2015, annual shipments of mobile devices will be four times that of traditional POS terminals.

Buzek notes that the most popular tablet by far is the Apple iPad, which he says "got an early lead in adoption and development plans among retailers." Despite this, he maintains that it remains "a big unknown if the Windows tablet will make a dent."

Apple's influence is being felt in other ways, as well. Buzek notes that many retailers have a strong desire to replicate the Apple Store experience. "The desire to imitate Apple's efficiency is undeniable," he says. "Retailers are always looking for ways to better assist customers when they walk in the door."

Being able to duplicate the ease with which Apple store employees can look up information, bring up items, and process credit card payments will not be easy for everyone, notes Aaron Shapiro, CEO of digital agency HUGE and author of Users Not Customers: Who Really Determines the Success of Your Business.

"Apple's products are self-contained, and they have bags attached to them. Some environments, like clothing stores, may have a harder time," Shapiro says. "Using mobile devices could be a huge win for retailers, but it's still a significant investment that will require training. Retailers need to think carefully about how they're going to apply these digital devices to their stores."

Leslie Hand, research director at IDC Retail Insights, warns against allowing mobile devices to serve as the new form of customer service.

"Tablets and smartphones should not replace great service, but rather complement great service," Hand says. "Business enterprises also need to seriously consider how they will support and maintain these devices in the field. Mobile enterprise management capabilities should be employed to keep applications in sync, monitor device health, and manage security."

Another concern is consumer privacy and security. "Store associates should not be privy to all of the detailed transaction data that is protected via privacy regulations—only the information that helps them better understand how to help the customer," Hand says. "Security is a concern—making sure data is secure, but also making sure devices are secure."

There is also no guarantee that equipping sales associates with mobile devices will deter consumers from whipping out their smartphones or tablets and making an online purchase from another retailer.

"Retailers need to accept the fact that more and more consumers have smartphones," Shapiro says. "They can either fight this uphill battle or embrace it by being the consumer's advocate. Retailers have to make that in-store experience so compelling people will want to come in. It's the only weapon they have against the Amazon.coms of the world."

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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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