Hard times for physical stores
The progress in digitalization is playing hard on many traditional retailers. The growing share of e-commerce is leading to an erosion of customer loyalty and an ongoing drop in footfall and revenues in physical stores. Consumers follow a different path in making and carrying out their shopping decisions and online retailers are taking their share. They are able to offer alternative and attractive value propositions with wide and deep assortments, convenient shopping processes and personalized and customized solutions. Instead of presenting an “average” offer to an “average” target group they have consumer access in the moment of decision taking. Even within a physical store environment, customers can go online anytime and visit an online retailer’s site. To remain competitive, offline retailers have responded with integrating digital in-store technologies into their physical servicescapes. Often, the introduction of multichannel connecting services like click & collect or order from or return to store are first steps. Nowadays, upgraded technology solutions allow a cohesive shopping experience and can leverage both the benefits of e-commerce and in-person, physical store shopping. The overall attempt of brick and mortar retailers is to digitally engage physical shoppers on their journey with a personalized shopping experience, thus creating a kind of 4.0 multichannel experience. The range and number of available shopper-facing technologies is growing constantly but they are not yet widely implemented. But do shoppers respond positively and does the investment pay off for retailers?
Bundles of hardware and software are developed to change or enhance the interface between retailers and customers within the physical retail setting. Retailers are faced with dizzying options of technologies that require a multitude of IoT devices and related connectivity solutions (Figure 1).