Why We’re Tracking Digital and Physical Integration

11-08-2017

Shopping in physical stores offers consumers something unique and valuable compared to the digital domain: a social experience and a tactile experience. But, a bevy of academic and industry research shows that shoppers are now seeing less value and pleasure in this core element of the physical retail experience.

A key reason for this declining value is that consumers now expect a physical user experience that rivals what they find online, from expecting goods to be in stock to being able to choose from multiple delivery options. Consumers wish to use technology to help them engage with the store at every step of the shopping journey.

Unfortunately, these new expectations are not being met, and as a result, consumer satisfaction for retailers is worryingly low. Nearly one in two retailers in a survey conducted by CapGemini Consulting was given a negative NPS by consumers. While many retailers are taking steps to remedy this through combining the virtues of physical stores with new technologies, over half of retail executives in the survey felt that the digitization of their stores is moving too slowly as they struggle with a range of challenges, from adequate training for store associates to difficulties in measuring the ROI of digital investments.

More concerning, many retailers are not implementing the digital initiatives that consumers want, achieving significant scale, or delivering a return. Only a minority of digital leaders who have implemented relevant digital initiatives in the majority of their stores and realized significant benefits.

Customers now interact with firms through myriad touch points in multiple channels and media, and customer experiences are more social in nature. These changes require firms to integrate multiple business functions, and even external partners, in creating and delivering positive customer experiences. In an article by Katherine N. Lemon & Peter C. Verhoef, the authors aim to develop a stronger understanding of customer experience and the customer journey in this era of increasingly complex customer behavior. They attempt to bring together what is currently known about customer experience, customer journeys, and customer experience management. Finally, they identify critical areas for future research on this important topic.

What is clear from all of the research being done in this area is that the winners of the future will be those that are transforming the customer experience through new technologies, digitizing operations, and putting in place the right people capabilities. Here at the Journal of Shopper Research we’ll be tracking insights around Digital and Physical Integration, providing a framework for retailers to diagnose where they are in terms of becoming a digital leader and the strategic priorities for ensuring they do not just match fast-changing consumer expectations, but have the agility and vision to stay ahead of what consumers want from the physical store.

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