Online retailers hone in on mobile data via bricks-and-mortar stores

Online retailers such as Warby Parker, Gilt and Bonobos are opening up bricks-and-mortar stores to not only expand their physical footprints, but also to glean how consumers shop with mobile and in-store technologies to eventually enhance their Web offerings.

Bricks-and-mortar stores are still a fairly new tactic for online retailers, with brands often only opening up temporary pop-up stores or pilots. Given mobile’s role in bridging the two together, savvy retailers are likely thinking ahead of the curve with how mobile can impact their digital assets with these types of stores.

“Many innovative retailers, like online retailers, believe the future of retail is the intersection of ecommerce and bricks-and-mortar,” said Tom Thomas, vice president of marketing intelligence at Organic, San Francisco. “These showrooms keep little to no on-site inventory while allowing shoppers to try product and provide direct feedback for both product design and consumer behavior.

The mobile implications are more efficient retail operations and the ability to offer a more personalized shopping experience,” he said.

“Online retailers with physical showrooms are best equipped for mobile purchasing since their operations are already highly digital.”

Mobile insight
Warby Parker recently made the jump to bricks-and-mortar stores with a store that lets consumers try on different glasses frames that they can then buy online.

However, the online retailer is also using physical locations for more than sales, and is using in-store data to get a better grasp on its users.

In an interview with Gigaom, Neil Blumenthal, co-founder of Warby Parker, New York, told the publication that it is using Wi-Fi, sensors and other technologies in-store to better understand its shoppers.

Warby Parker declined to comment on any additional specifics with its bricks-and-mortar stores for this article.

Using Wi-Fi and touch sensors will let Warby Parker not only understand how consumers interact with products tangibly but also look at how shoppers use their mobile devices to access information while in a store, which can then be used to influence the retailer’s inventory and merchandising strategies online.

Leveraging in-store QR codes can also help online retailers gather data on their consumers and also eliminate queues.

“Instead of a checkout station, the shopper simply purchases through a QR code on the item, which automatically processes payment, schedules shipping and collects data on the shopper,” Mr. Thomas said.

“These analytics along with a behaviorally adaptive content system could allow the retailer to notify the shopper of products whenever they are within proximity of the showroom,” he said.

In another example of how online retailers are embracing bricks-and-mortar stores, Gilt is opening up a month-long pop-up store later this month in Louisville, KY.

The store will be located nearby to the company’s largest distribution center. The temporary store will offer discounts up to 90 percent off on merchandise.

Given Gilt’s large focus on mobile as an integral part of its online-only business, it is not hard to imagine that the retailer is likely looking to gain some insight into the shopping behavior of in-store shoppers, where they are plugged into their mobile devices, to influence its Web strategy.

“Over time, Gilt has built a number of features that enhance the shopping experience – editorial via GiltMANual and product discovery via the what’s trending feature enhance the ever-present ability to gauge how something will look by seeing it on model whose measurements are provided,” said Steve Smith, partner of planning and insights at Firehouse, Dallas

“Mobile can bring some of this functionality into the bricks-and-mortar environment, enhancing the experience and making it more on-brand,” he said.

Mr. Smith is not affiliated with Gilt. Gilt did not meet press deadline for a comment on this story.

Specifically, Gilt has a strong mobile strategy with applications, which could be leveraged by the retailer to get an even closer look at how mobile is used as part of a multi-device shopping journey.

The retailer could potentially have a trove of data to tailor an in-store experience around, including past purchases, product discussions and social media activity.

Additionally, there could also be an in-store mobile app component to ultimately drive consumers to an online store if a product is out of stock.

“It’s not about establishing a store strategy – mobile is going to enable [online retailers] to understand the behavior between the online and in-store shopper,” said Adam Silverman, principal analyst at Forrester Research, Cambridge, MA.

“And for those retailers that have a larger adoption of mobile apps, they are at an advantage because they can track more people,” he said.

“Measuring across touch points is the hardest challenge and tying back that store shipper to a shopper in your database. They need to deploy a mobile app to create a hook and a single view of the customer.”

Seamless user experience
Although there are many challenges with operating bricks-and-mortar stores, including expensive costs, there is also a big opportunity for online retailers to use physical locations to build brand affinity that can be translated to online sales or through incremental revenue.

Additionally, online brands can use bricks-and-mortar stores to try out location-based tactics that they otherwise would not be able to implement.

“This starts away from the store with enticing content but also includes near the store via geo-fenced offers and in-store with tools and tips like augmented reality,” said Doug Rozen, chief innovation officer at MXM, New York.

This helps fill in the entire customer journey with mobile adding a contextual layer to the shopping experience.

At the same time though, retailers also need to understand the differences between shoppers on each medium, according to Ben Kennedy, group director of mobile marketing at The Integer Group, Denver.

“The biggest challenge online retailers will face is to find an answer to a tough question, what is the role of the store?” Mr. Kennedy said.

“People will enter a store to be inspired, to feel better, see products that they have never seen before, presented in a beautiful way – it’s not going to be for convenience [because] same0day delivery and online platforms provide this value,” he said.

“Today, this doesn’t happen in a lot of stores, which provides both an opportunity and a challenge to an online retailer. Data generated through online and mobile platforms will empower online retailers to offer a very unique and differentiated customer experience through physical outlets.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York