March 3, 2014, 11:20 AM

The digital future of stores

(Page 2 of 5)

Bon-Ton has 270 stores in 25 states doing business under several retail brand names, including Bergner's and Carson Pirie Scott & Co. Fernandez says nearly all of them are now Wi-Fi-enabled so consumers can tap into the web while shopping in stores, and the chain over the last two years has worked to integrate its business systems to more tightly align web and store operations.

"Right now we are in the process of making the integration between web and retail inventory much tighter than it has been in the past, and much more real time," Fernandez says. Those will include allowing online shoppers to see what products are available in nearby stores and to pick up web orders in stores.

As chief omnichannel officer since October, Fernandez is helping steer that transition, overseeing marketing, e-commerce and information technology for the retailer. The chief omnichannel officer title is a new one for Bon-Ton; Fernandez was hired as its chief marketing officer in 2012 with oversight of marketing and e-commerce. The new position added information technology to his responsibilities. "The job is really about linking the customer data and experiences between the web sites and the stores and making sure we have the right marketing and e-commerce experience to support and promote that," he says.

Bon-Ton is currently testing the use of radio frequency tags (see photo, page 26) in its shoe department in 30 of its largest stores. A consumer with a smartphone enabled with chips that support a wireless technology known as Near Field Communication (most newer Android smartphones have them) can tap his phone on a display shoe's tag and immediately connect to the web—through the store Wi-Fi network if he chooses—for more information on that shoe, such as consumer reviews, and what sizes or additional colors are available in the store he is in, in nearby Bon-Ton stores and online. He can place an order online right away or e-mail himself the product information.

If a shopper does not have an NFC-enabled phone or doesn't want to use it, each shoe department has a tablet mounted where he or a clerk can reach the same information with the tags. The NFC tagging system, from technology company Thinaire, has been in place since late last summer. "Customers are pleasantly surprised at how easy it is," Fernandez says, noting that while some consumers have placed orders, more often they use it to check for sizes and colors. At this point the retailer can't track how consumers interact with the technology and link that to purchase behavior on that store visit or later, in the case of a shopper who e-mails information to himself and eventually buys. Fernandez says Bon-Ton and Thinaire are working to refine those capabilities.

Consumers are starting to see some of Belk Inc.'s so-named "future of store" initiatives when they shop at the retailer's department stores, such as signs that declare "Yes! We have it!" and show consumers in stores how they can order products from Belk.com. Internally, Belk calls it the "saving a sale" program, says executive vice president of omnichannel Dorlisa Flur, who joined the company to fill that newly created role early last year. Many more programs are in the works, but before they can proceed, Belk needs to replace and upgrade a lot of its core technology systems.

"The customer is ahead of our technology foundation right now," Flur says, noting that most Belk stores don't have Wi-Fi hotspots that'll let consumers with smartphones go online or in-store communication systems that could alert workers that a shopper wants assistance.

The retailer's point-of-sale system also limits how it can use customer and inventory data. But that will soon change. Belk plans to swap out a key legacy platform to bring it up to date and ahead of consumers' technology expectations. Without naming vendors or systems, she characterizes the move as the "omnichannel equivalent of open-heart surgery."

The retailer is also overhauling and linking together other systems so it can make better use of the data it has to offer shoppers merchandise they're likely to want. The marketing department's customer history and analytics systems will be connected to the bigger systems to help personalize shopping, Flur says. For example, the retailer has a wealth of data tied to its private-brand credit card, and Flur says through that data it can identify more than 80% of its sales back to the household level. "We are not today using that data in the most effective way possible, but marketing is working on how we can apply that knowledge of who she is and what she is buying to do segmented offers," she says. "The information behind that is enormous and will inform other strategies."

But that isn't easy. Getting the data, interpreting it and using it in a way that will really help customers are the keys to bricks-and-mortar retailers' transformation, RSR's Baird says. "We have a couple years of serious, hard-core data analysis ahead of us before we'll start to see the good ideas from retailers," she says. "Collectively, all the technologies I've seen so far have been cool, but I don't know if they will enhance the customer's shopping experience. They don't make it easier for the consumer to shop, save her time or money or make shopping more fun."

Meanwhile, web-only retailers should keep watch on what store retailers are doing and get smarter about when and how customers are shopping with them. "The next level [for e-retailers] is going to be about context and making themselves more location-aware," she says. For example, smartphone shopping apps like ShopSavvy can collect location data from app users' phones. If a consumer is checking for information on a product while in a store, an e-retailer can refine a listing or ad on ShopSavvy to appeal to the consumer who is about to make a purchase, such as showing her the price and shipping information. If the app pinpoints the location as a residence, the consumer is probably further from making a purchase and an e-retailer's listing or ad can take a different approach.

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