Like fashion trends, customers can change quickly. The last few turbulent years have triggered huge shifts in customer buying behavior and preferences across the retail landscape. This is especially so in the fashion sector, where physical stores play such a pivotal role.
After embracing online shopping in record numbers, consumers’ expectations and requirements of in-store fashion experiences have been reframed.
E-commerce brings choice, convenience and a wealth of information at their fingertips. Fashion brands have been adapting to changing and challenging conditions, but the transformation is still just beginning. What is the future of in-store engagement?
Fashion brick and mortar stores can still provide something that e-commerce can’t offer: a blended experience that combines the traditional benefits of physical retail (i.e. the ability to touch and try on items), the human touch of interactions with associates, with digital technology that brings the best of online, in-store.
When considering what a store is for and the future of in-store engagement, fashion retailers are challenged to:
- Understand new behaviors and meet evolving expectations to attract and retain customers
- Rethink store experiences and engagement in an increasingly digital, omnichannel world
- Empower store associates to deliver differentiated experiences and assistance
- Digitally transform in-store technology and operations at pace to support all of the above – and the understand the cost of not doing so
To dig into the current and future state of in-store engagement, we surveyed executives at 73 of the largest fashion brands and over 3500 consumers across Europe and the Middle East.
This report shares our key findings, including insights into the challenges, opportunities and outcomes of in-store engagement, the use of technology underpinning it, specifically smart devices and mobile apps, and retailers future investment priorities.
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In-Store Engagement: Trends, Challenges & Opportunities
To understand the status quo today, we asked retailers their views on what works and what doesn’t in physical stores. What are their current pain points and what technologies they deploy in stores today to assist shoppers. To explore the state of in-store engagement, we asked both retailers and consumers to share what they value most and least from shopping in stores.
The inexorable shift towards experiential retail
of fashion retailers believe becoming more experiential is essential for the future of physical retail.
Retailers were almost unanimous in their view. With the surging popularity of e-commerce expected to hit record highs in 2022, fashion retailers are clearly looking to incorporate more immersive, interactive and shareable experiences into brick and mortar stores to attract footfall, engage customers and differentiate themselves from both online and physical rivals.
The value of the physical store in the digital age
When it comes to the in-store experience, there is a consensus between both fashion brands and consumers that the tactile nature of fashion, with the ability to touch and try on products is still the main reason to visit a physical store.
This immediacy and touch is something that simply can’t be replicated online. Similarly both groups agreed that the ability to make an instant purchase was a highly valued reason to visit a fashion store in person. No need to wait or pay for delivery.
75% of retailers listed the ability to interact with store associates to receive personalized information and advice as a close second when it comes to the value of visiting a store.
However, for consumers this wasn’t a top three consideration. They placed more emphasis on enjoying an innovative and experiential store environment, such as in-store events, demos and virtual fitting rooms. This is another factor that online shopping can’t fully replicate today, despite the potential of the metaverse.
This disconnect in the value of speaking to associates may be due to the fact that in-store service levels often don’t match the speed and ease of online shopping. Or that potentially associates aren’t equipped with the right information and tools to offer the enhanced level of personalization that would make it a real draw.
What puts customers off shopping in-stores or making return visits?
When it comes to the factors that actively deter consumers from shopping in stores (or re-visiting them), convenience was a common factor in their responses. We asked consumers to share factors which they find off putting, and asked retailers what they thought consumers would answer.
And the good news is that there was broad agreement between the two groups.
The prospect of long queues to make a purchase was the biggest turn off for almost half of the consumers questioned (47%). 43% listed the lack of stock and availability (for example, no products in the right size or a preferred color) as a reason they wouldn’t return to that store.
Both of these factors can be attributed to this desire for convenience and ease in the store shopping experience. Increased expectations and demands driven by e-commerce experiences, with features such as one-click ordering or instant access to real-time stock information have raised the bar.
In our stores customers don’t wait very long – we aim to keep them waiting no longer than 1 minute. – Middle Eastern-Based Shoe Brand
Although as one retailer pointed out, queues aren’t always a bad sign:
When it comes to long queues, it depends, this is just one aspect of their experience e.g. in some of our shops, people choose to queue outside just to get in. – Italian High-end Fashion Brand
This is borne out by the data, while just 41% of luxury fashion retailers felt queuing was a major deterrent for shoppers, this jumped up to 78% for non-luxury brands.
The role of store associates in customer engagement
36% of consumers and the majority of retailers (83%) felt store associates who can’t help or answer questions were a top 3 major detractor of in-store experiences. And almost a third of consumers (29%) said having to wait for help or answers would put them off returning to that store.
Retailers felt it was the number one factor contributing to negative shopping experiences. It can also be exacerbated by extensive product lines or frequent product refreshes, making it hard for store associates to always have the answers.
We sell lots of products – when customers look for a specific product it can be challenging. And we have customers coming from all over the world, often looking for limited edition products, who need help. – Middle Eastern Footwear Brand
We change our stuff very frequently. There is a fast product turnover rate, which means a lot of training and retraining is needed. – Eastern European Fashion Brand
It’s clear that retail associates play a key role in creating the frictionless, convenient, differentiated shopping experience consumers demand from fashion stores.
As a result, fashion brands place a high priority on employee performance. And almost half (48%) of retailers listed recruitment and retention of high quality associates as their biggest challenge, which has been a well documented challenge to the wider retail industry over the past few years.
Consumer Self-service Apps vs Associate Assistance
Customer mobile shopping apps are playing an increasingly important role in customer engagement in the store. Effective apps can tie together online, mobile and in-store experiences for consumers.
We asked consumers their preferences for using apps or speaking to associates when shopping in-stores, and what things they would be willing to use an app to do.
of consumers prefer to interact with associates rather than using mobile apps when shopping in-store.
Although the majority of consumers do still prefer to seek help from associates, there is also a large contingent who are increasingly willing to use mobile apps in stores for a range of different purposes.
One of the keys to effective customer engagement is to provide the choice to customers. To empower associates to deliver a differentiated service, with the option for self-service and direct access to information and offers for those who want it.
But what about the technology used to support in-store assisted selling and customer engagement?
Assisted Selling Technology & Outcomes
Technology is an enabler of smart store experiences
We wanted to understand how fashion retailers currently deploy mobile technology and applications to support store associates with customer assistance, engagement and checkout. Specifically:
- Clienteling Apps – mobile apps which enable associates to access product, stock and customer data on preferences, behavior and purchases to provide a more personal, informed service.
- Mobile Point of Sale (POS) – an mPOS system which allows associates to use a portable smart device, with POS software to process sales transactions anywhere in store.
Currently the majority (71%) of fashion retailers use smart devices with clienteling apps, mobile point of sale (mPOS) apps or both in stores. But how are smart devices and applications performing as customer assistance tools in these areas and are retailers seeing measurable outcomes?
For those retailers who haven’t yet embraced these digital tools, we wanted to know how they are assisting customers today, and what their future plans and priorities are.
Clienteling that Counts: Impact on Satisfaction and Sales
When it comes to clienteling apps on smart devices, what are the main features the 56% of retailers deploying them use? What do retailers perceive as the biggest benefits and crucially how is it affecting the bottom line?
In terms of empowering associates to help customers, the most commonly cited feature of a clienteling smartphone app was the ability to scan barcodes to lookup product information (73%).
The ability to have rapid, on-the-spot access to real-time information by scanning barcode on labels or shelves enables associates to help overcome some of the consumers’ biggest turnoffs, namely:
- 43% – Stock outs and limited availability
- 36% – Associates who can’t help or answer questions
Any associate can have the confidence to accurately access product information, with a device that they can carry on them everywhere, all day. Almost half of retailers also stated their apps offered the ability to scan loyalty cards to access customer information.
Of course, barcode scanning performance and reliability is essential in delivering effective engagement and up-to-date information. Any mis-scans or errors might result in a customer walking away. Retailers are turning to smart data capture technology to assure scanning performance on any smart device model, in real store conditions (where light, shadows, glare, angles or distance can affect speed and reliability).
Putting this ability to access customer account information into associates’ hands, anywhere in store, during interactions with shoppers, is clearly viewed as critical in delivering enhanced, bespoke customer engagement and boosting store sales.
And the fashion retailers we surveyed say it’s working.
The measurable benefits of clienteling on smart devices
Overwhelmingly, retailers believe greater customer satisfaction is the main benefit of using clienteling apps on smart devices.
Over half of retailers believe the positive impact on their customers’ in-store shopping experience is the main benefit.
In addition to increasing satisfaction, 84% of retailers also state that since deploying clienteling apps to store associates they have seen an increase in the average order size of store transactions.
In fact, almost half (49%) say the average transaction size has increased by up to 25%, while 8% have seen an increase of 26-49% in order size.
This boost to basket size was even more prevalent amongst the luxury and high-end fashion brands surveyed, where 14% of retailers saw an increase of 26-49% in order size.
Those without smart devices depend on store associates
For those retailers who don’t use smart devices in store, 71% stated that they rely on store associates as their primary method of answering customer questions. This places a heavy burden on ensuring associates have the relevant skills, training and knowledge to assist customers – likely why retailers surveyed cited getting high quality associates as their biggest challenges.
It also leaves the problem of needing to leave the customer’s side to access specific product information (such as stock availability) from backend systems, where consumers can easily wander off and frustrate the potential sale.
Changing Checkout: Mobile Point of Sale
When it comes to completing the purchase, and with long queues (47%) topping the list of consumer deterrents, fashion brands are understandably looking for solutions for queue-busting.
48% of retailers we surveyed have deployed mPOS technology on smart devices to handle transactions from anywhere in the store. So what were the main drivers?
21% of retailers did cite reducing queues and customer walkouts as the trigger behind deploying mPOS on smart devices. However, the most popular answer given by almost one-third of retailers was that deploying mPOS would enable them to make their employees more mobile.
We want to reduce waiting time in stores that are smaller and are really busy, so we can free up staff to help more customers. – UK Outdoors Fashion Brand
Currently investing in mobile devices – but not for transactions specifically – however this may end up being for sales as a by-product (as the technology will be there). – UK High-end Fashion Retailer
Freeing certain employees from manning fixed POS tills and empowering them with the ability to be available to handle any operational task, answer questions or take payments, from anywhere in the store, was cited as a highly prized outcome for retailers.
Other triggers for deploying mPOS includes:
- 9% to add an additional payment option
- 9% to free up more floor space by eliminating fixed POS
While eliminating fixed POS tills entirely is a priority for some retailers, for most it’s about mobilizing employees, cutting down on walkouts and also offering additional payment options to demanding customers.
mPOS is delivering results and reducing walkouts
Encouragingly, 91% of retailers agreed that since being deployed, their mPOS solution has achieved their desired outcome.
It (mPOS) just gives an easier and faster service to the customer – they can pay directly sitting on the couch. – Italian Fashion & Beauty Retailer
Almost half of retailers (46%) have seen walkout rates – when customers abandon the purchase and leave the store empty handed – decrease by over 10% since deploying mPOS on smart devices.
mPOS not a priority for all fashion brands
Of the retailers surveyed who haven’t deployed mPOS on smart devices, the biggest reason given was that they had other investment priorities for their budget (50%).
Interestingly, no one selected the answer option that they weren’t convinced mPOS could deliver quantifiable benefits – so clearly the perceived benefits of the technology are known and accepted. As existing POS technologies come up for replacement or reach end-of-life, mPOS seems set for further growth.
This is backed up by the fact that over half (56%) of those who don’t currently use mPOS on smart devices do plan to invest in the technology within the next 12 months.
Future Consumer Demands & Technology Investment Priorities
So what’s next for physical fashion stores and customer engagement? Here we asked consumers to share what types of experiences would motivate them to visit stores during 2022. We also asked retailers to share their technology investment priorities and plans when it comes to how they aim to differentiate their in-store experiences.
Engaging and attracting consumers into stores
One area where retailers and consumers are in lockstep in terms of the need to make fashion store visits more experiential and less transactional.
Overall, the consumers we surveyed can be motivated to set foot in physical fashion stores by a range of factors.
Almost half (46%) agreed that the chance to enjoy new in-store experiences is a big draw for them – and this was consistent across all age groups.
Other factors driving potential future store visits included:
- 43% say the ability to return goods bought online
- 41% say the ability to pick up goods bought online
- 28% say more digital shopping experiences (mobile shopping apps, virtual assistants)
- 26% say personal shopping appointments
- 25% say offering augmented reality experiences in stores
The ability to enjoy more digital experiences, personal shopping appointments and augmented reality were also popular across all generations – although slightly higher amongst Generation Z (respondents born after 1995). The future of store engagement will be underpinned by digital experiences and technologies.
Blurring the physical and digital boundaries
However, it’s clear that for customers the boundaries between online and offline are becoming increasingly blurred. The ability to return (43%) and pick up (41%) goods purchased from the retail online in the physical store were very popular among consumers surveyed.
For retailers, the ability to offer seamless omnichannel experiences is critical and the opportunity to upsell once customers are in-store seems too good to miss.
It’s vital for us to migrate all online and offline experiences into one unified channel / strategy. – Turkey-Based Retail Group Incorporating Multiple Luxury Brands
It’s clear from these trends that digital technology underpins the future of customer engagement in brick and mortar stores. So how does this map to retailers’ plans?
Fashion technology investment plans for 2022
When it comes to investing in technologies that can elevate and differentiate the in-store experience, we saw a few notable trends emerge in the priorities for 2022.
Delivering this more blended ‘phygital’ experience that consumers demand is clearly a priority, with 73% of fashion retailers stating that they will invest in new omnichannel options for customers (including pick ups & returns) in 2022.
47% were also prioritizing more payment options for customers in-store, which also supports the need to boost ease and convenience for shoppers, while not missing any potential sales opportunities.
Deliver digital in-store experiences
Secondly, retailers are also aware of consumer interest in experiential digital technologies to drive engagement in stores, such as augmented reality (AR). Whether in a customer shopping app or an employee clienteling app, AR can deliver wow experiences using smartphones already in place in consumer or associates’ hands.
Over a third (38%) stated that AR experiences that combine digital and physical shopping are a priority investment.
For me, augmented reality is the most important of the lot. – Turkish Fashion Brand
AR is being trialed now – and with significant success. – UK Footwear Brand
Empowered employees and connected retail
The role and increasing importance of store associates in delivering differentiated experiences is also key – whether it’s matching the levels of information, ease and convenience of online shopping or delivering personal shopping experiences with a real human touch that can’t be replicated.
Over half of fashion retailers (54%) said that empowering employees to become consultants/concierges with digital tools and capabilities should be a tech investment priority in the next 12 months.
Integration between existing systems is the priority for us. – Italian Beauty Brand
Delivering all of the above is far from simple. 60% of retailers listed the need to invest in backend solutions to integrate all existing inventory and PoS systems as an urgent need.
Effective in-store engagement and omnichannel retail is powered by fast, accurate and intelligent use of data.
The function of fashion stores, store associates and how consumers want to engage are all evolving at pace. It’s clear there is work to do to keep up, but fashion brands who are already advanced on their digital journey, who understand their customers and empower workers are already seeing positive results in satisfaction, operational efficiency and profitability.
- The need for the physical store is still essential in fashion due to the tactile nature of the product. But the shift towards becoming an experience center to attract consumers with new digital experiences, and the need to offer seamless omnichannel relationships between your brand and its customers, will both impact future success.
- Clienteling apps on smart devices are helping to boost customer satisfaction levels and increase average order size. The shift towards empowering associates to become consultants with digital tools looks set to continue.
- Queues are still a major deterrent for consumers – especially if they are wavering about a purchase or need further information. Mobilizing employees with mPOS on smart devices helps prevent walkouts with in-aisle transactions, while untethering staff to help shoppers and tackle other tasks too.
- Retailers are investing in digital transformation and innovation, but also are focused on ensuring seamless integration of their devices, apps and backend systems to ensure real-time data is available and actionable.
73 leading fashion retailers across EMEA surveyed in November 2021.
- Respondents from 12 countries: Andorra, Denmark, Italy, Netherlands, Poland, Portugal, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom.
- 18 luxury fashion brands and 55 non-luxury fashion brands.
- Conducted via telephone interviews and online surveys by ITTS on behalf of Scandit.
3523 consumers across EMEA surveyed in November 2021.
- Criteria: consumers who purchased goods from a fashion store within the last 3 months across the UK, Italy, Spain, Turkey, Germany, Sweden, Norway and the UAE.
- Online surveys by Sapio on behalf of Scandit.
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