Blurred Lines: Retail's Shrinking Divide Between Digital and Physical

Posted by Anna Keagy on July 28, 2015


Imagine taking the subway home from work and simultaneously getting your grocery shopping done. This is a reality in South Korea, where Tesco supermarkets created virtual grocery stores that project on subway station walls. Customers use an app to scan the projected items’ QR codes, and their purchases are delivered shortly after they arrive home from work.

This is just one example of the many ways the digital and physical worlds are increasingly converging. Retailers are continually searching for innovative ways to embrace technology to create convenience for customers and increase sales. Gigaom defines digital-physical innovation as “the increasingly seamless merging of traditional offerings with new information technology capabilities to enhance the customer experience.”

"an estimated 90 percent of all purchases still happen in a physical store."

In summer 2014, 55 percent of all time spent with online retail occurred on a mobile device. However, while mobile is of great importance for retailers, the in-store experience and online customers using a laptop or desktop cannot be ignored. In fact, an estimated 90 percent of all purchases still happen in a physical store.

Beacon technology is a great example of the intersection of digital and physical. Beacons are a low-cost piece of hardware that uses low-energy Bluetooth connections to send messages or prompts to a smartphone or tablet. They are currently most commonly used as push technology, which a consumer must opt into by downloading an app or turning on Bluetooth on their device. Beacons have the potential to determine exactly where a customer is in a store and what products he or she is near. Retailers can use this intelligence to target specific mobile communications to this customer.

Beacons are not the only technology innovations that are affecting the digital-physical landscape. New apps and technologies are popping up every day. For example, deep-linking company Button is trying to find a way to implement the linked nature of the internet on smartphone apps. Another startup, SpotItBuyIt, gives clients a webpage where they can add Instagram posts with a buy button, making it easier to convert views into actual sales.

It is more important than ever for retailers to stay innovative and find ways to use top notch technology while still keeping the in-store experience relevant. According to one IBM study, only 36 percent of CMOs believe that their organization has a digital strategy that delivers results today. This is a realm of a huge amount of untapped potential, and smart businesses are trying to stay ahead of the curve.

In summary, we recommend retailers consider the following approaches in light of the ever-increasing trend toward digital and physical convergence:

  • USE BUT DON’T OVERUSE – While beacons have potential, retailers need to be wise with how they use this technology. Overuse can be disruptive and can even be seen as creepy. Beacon technology’s greatest potential may be in using a combination of monitoring customer’s actions but also receiving input from the customer (through use of digital signage that a customer can use to get more info on his or her phone, etc.)
  • ENSURE SECURITY – Many users are hesitant to actually use their smartphones to make purchases, and, according to an Econsultancy research study, 39 percent of people are concerned about security. Wise retailers should go the extra mile to ensure that customers can have confidence in the security of the system and privacy of their personal information.
  • CONTINUALLY IMPROVE – Consumers are always looking for more – faster, better, more interesting, etc. For example, according to Jumio, 82.4 percent would be more likely to shop using mobile if the checkout process only took five seconds to complete. Retailers must be continually finding ways to improve both the in-store and the online experience – as well as find ways to increasingly integrate the two merging worlds.

Topics: Retail