E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
As smartphone shoppers proliferate, some retailers deploy mobile technology in stores to corral customers.
J.C. Penney Co. Inc. offers brides-to-be a wide variety of engagement and wedding rings to choose from. But there's only so much space in the displays, and it's not easy to keep track of all the features and intricate characteristics of all the rings a woman may set aside as possibilities. Ring buying needs to be an enjoyable experience for a bride—any frustration may lead her out the door.
Enter the iPad. J.C. Penney is using Apple Inc.'s popular tablet computer in the Modern Bride sections of many of its stores' jewelry departments. Through an app built in-house, jewelry associates showcase rings on the iPad accompanied by plenty of useful information on carats, cuts and more. They can show a bride how the silver ring she's looking at in the store looks in gold when there is no gold ring in stock. And they can place all the rings a bride likes in a "notebook" on the iPad for comparison, and for sharing with friends and family through e-mail and social integration.
"It's a device that people are very familiar and comfortable with, and it is pretty darn intuitive," says Tom Nealon, group executive vice president at J.C. Penney. "There are a lot of capabilities that make it a fun experience. And it's pretty cost-effective; you can put a lot of iPad devices out. It gives the customer a more intimate shopping experience with that really important purchase of an engagement ring. And the iPad has a bit of a brand halo to it, where it really lifts the store by incorporating leading-edge technology into the store experience."
A defensive strategy
Retailers that operate bricks-and-mortar stores are thinking more about mobile technology because they see an increasing number of shoppers walking into their stores with smartphones in hand, armed with the full power of the mobile web and all kinds of retail apps. Those consumers are comparison shopping and checking various retailers' prices right there at the store shelves, and there's nothing a retailer can do about it.
Or is there?
In fact, while a retailer can't prevent a consumer from using a smartphone while she shops, merchants can counter with mobile technology of their own to intercept these shoppers and attempt to get them to buy then and there in its store—not via a competitor's mobile commerce site or app, or through a trip to another merchant's shop.
A number of retail chains are experimenting with deploying mobile hardware, primarily iPads, in stores, giving them to employees to enchant shoppers and bring all the information of an e-commerce site or back-end store system into the hands of associates and customers. Pioneering merchants include J.C. Penney Co. Inc., The Disney Store, The Neiman Marcus Group Inc., Nordstrom Inc., Old Navy, Recreational Equipment Inc. and Things Remembered. And that's not the only way mobile technology is showing up in stores. Other retailers are testing apps that customers use on their own hardware, apps designed to make in-store shopping more enjoyable and productive. Magic Beans is an example of a small retail chain trying its hand with this approach.
Nordstrom is testing iPads in numerous stores in its Wedding Suite and designer fashion departments. Associates use the devices to help shoppers comb through the various dresses and find fashion in different styles or items that may be out of stock in-store. The retailer recently rolled out Wi-Fi networks in all of its stores, along with 6,000 handheld mobile checkout devices so associates can ring up customers without walking them over to cash registers, the retailer reports.
Things Remembered crafted special iPad kiosks for some of its stores. The merchant, which specializes in personalized gifts, is using the iPad Kiosk App from Global Bay Mobile Technologies in select stores to streamline a previously paper-based, in-store process for ordering personalized products.
It's critical that retailers create a mobile strategy to help store employees successfully sell to the growing number of consumers carrying web-enabled devices, says Nikki Baird, managing partner at Retail Systems Research.
"Retailers have to face a world where consumers walk into the store with more technology on their person than an employee may have access to all day," Baird says. "Point of sale is expensive hardware, designed to take payments; it's just not designed to cross-sell, up-sell or generally provide pre-sale service. If a retailer has employees on the floor, as opposed to behind a register, then employee-facing mobile has to be seriously considered, even if all it does is provide the employee access to the retailer's web store."
A consumer with a smartphone can access everything from ratings and reviews to product specifications to prices and more—on products a retailer carries and on items carried by competitors. This is a primary reason why chain merchants need to arm store associates with mobile technology, Baird says.
"If a shopper is lucky, she might find that a non-mobile-equipped employee knows where to find a product in-store," she says. "And if it's not on the shelf, that employee wouldn't be able to tell her when it might come in or how to get it at another location in the chain, or much about alternative products. That's just too much of a gap to overcome without providing some kind of mobile device."
Marrying mobile and stores
J.C. Penney decided to incorporate the iPad into selling when it built the Modern Bride boutiques in many of its stores. The idea was to ease ring buying and ensure any question a bride may have could be answered on the spot—even if the question is: I wonder what my friends would think of this ring?
An associate and a customer pass an iPad back and forth, searching together for rings, examining details more closely, obtaining more information, and ultimately narrowing down choices in the app's Notebook section. "There is a strong service orientation with the iPad," Nealon says. "Personal engagement between associates and customers. They are working together on it, collaborative and interactive."