Continuing with the theme of Omni-channel strategy for retailers and brands, let us see how emerging technologies and shoppers’ behavioral changes have created a strong base for Phygital. 
Modern Retail’s rules have changed, and the lines between real-life experiences, human aspiration, and virtual fantasies are blurred. Hyper-connected shoppers are seamlessly traversing across channels and are looking to meet their needs through multiple platforms. By going Phygital, shoppers gain the best of offline and online experience using digital technologies like IoT, AR/VR, and AI.
In my 13 years’ experience handling various leading CPG, Retail clients, I have realized that you have to win all of those seemingly innocuous Moment of Truths.
- When someone does an online search (win on pricing, promotions, availability, benefits, reviews)
- When a shopper enters a store and enters a specific aisle
- When a shopper uses the product and finds a delta between Expectations vs. reality
With a Phygital strategy, we have to factor in the all important Supply Chain equation as well –
- Was the right product in the right aisle available for the shoppers when they were deliberating on a purchase decision?
- How can retailers and brands minimize their Lost Sales?
- What do we do when shoppers’ see a depleted aisle? [Hint: They will go online, buy a substitute or go to a rival retailer]
The cost of Stockouts is Huge and extends to the lifetime value of losing a customer. Retailers are losing more than $1 trillion in in-store sales. As shoppers ourselves, we can understand why we go to the neighborhood store or the big-box retailer. The convenience of trying out the product, avoiding delivery delays or shipping charges, or getting expert help (on categories like electronics, apparel) might be some of the motivators. If there are loyalty offerings for frequent shoppers, it is an added benefit too.
Retailers can fill in the gap by employing an ENDLESS AISLE strategy, which, at its core, uses the same level of customer-centricity that is a hallmark of Phygital. ENDLESS AISLE is about empowering in-store shoppers to use a kiosk to virtually search and fulfil orders for products that are not available in-store. Products could be delivered to the store or drop-shipped to the shopper’s home.
TOP 10 KEY BENEFITS OF ENDLESS AISLE STRATEGY
- Prevent revenue loss due to OOS
- Shopping Convenience and Improving Customer Lifetime Value
- Less pressure on Sales Associates to be available every moment
- Broad and Deep product assortment without having physical inventory
- Better Forecasting of demand using online and in-store data on what shopper’s Needs and Wants are.
- Personalized at-kiosk offer and Promotions improving conversions
- Provide Navigation and in-Store Product search capabilities
- Reduce Shipping costs by consolidating Endless Aisle orders
- Sync online assortment offerings to in-store offerings to offer a seamless experience and overlapping sales
- It equips retailers’ to dropship shoppers’ orders directly to their home- by taking the pain out of dealing with multiple suppliers. Like e-commerce, the suppliers ship items to users, and there is no need to hold physical inventory.
How AI can further augment Endless Aisle moments?
- Computer Vision can constantly monitor products on the shelves and help Brands to fix upcoming inventory issues and
- Vision-enabled Smart Carts can scan, extract Price and Promotional info, and help to checkout. This will eliminate queue time significantly.
- Facial recognition can detect new and returning customers. And using this data gamification based loyalty points can be assigned to customers to encourage customer retention and bigger basket size and product bundling
- AI-based robots and Kiosks can provide navigational (Which Aisle?) and emotional companionship (fun engagements).
An Endless Aisle strategy will play a significant role as retailers embark on their Phygital journey. Winning at the moment of truth can occur only when retailers, and suppliers anticipate demand to the full extent possible. And they have to make their processes aligned to fulfill orders even when they have zero physical inventory!
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I would love to hear from you. Do leave your comments or feedback.
Interesting take on the Aisle strategy. For that matter, Costco has some unique aisle strategy. They keep changing their items designated place . May be to motivate the customer walk through different aisles and hence they end up buying other items while reaching to the destination.
Thank you JDT. In a warehouse club like Costco which sells almost all the products under the Sun a changing store layout is part of the Strategy. They do not want people to just go and buy their staples and tick off their shopping list. They would want you to wander around, and discover products or services and engage with the brands. And sometimes there will be trade promotions going on between suppliers and Costco which makes the aisle move to a more prominent location in-store. Brilliant nonetheless!