Vantiv Omnicommerce Tracker™ July 2017
How Lowe’s is building a better omnichannel experience
Every month, Vantiv and PYMNTS.com team up to deliver the latest news in omnicommerce. Here's an overview of the Omnicommerce TrackerTM published in July 2017.
2017 has been a record-setting year for brick-and-mortar retailers. So far, more retail stores have declared bankruptcy than over the entire course of 2016 – and the year isn’t over yet. There are different forces behind this sea change, the most notable being the seemingly endless growth of shopping online and via mobile devices. As traditional brick-and-mortar retailers continue to feel the pressure of meeting consumers’ expectations in an omnichannel world, many are rethinking the role of physical retail and reinventing how they do business along the way.
Take home improvement stores for example. In the home improvement and DIY category alone, Americans are expected to spend nearly half a trillion dollars this year. The question for these retailers is how to harness as much spending as possible through all of their shopping channels – online, in-store and via mobile devices. This may include everything from changing the layout of brick-and-mortar locations, to bridging the gap between all available shopping channels.
Home improvement companies like Lowe’s are learning to adapt to this quickly changing omnichannel retail environment. July’s Omnicommerce Tracker, presented by Vantiv and PYMNTS.com, features an interview with Scott Ross, Lowe’s senior vice president for information and technology. In the interview, Ross explains that while the company is seeing massive growth on its digital platform, it hasn’t forgotten its roots. Even in this omnichannel era, brick-and-mortar stores remain crucial to the company’s expansion strategy, and it’s increasingly learning from other industries to stay agile and relevant to its customers.
“It’s an exciting time to be in the sector of home improvement retail and technology because our digital channel is growing like crazy, but the stores are still critical to our strategy,” Ross says. “We certainly can learn from other industries. So we looked to our friends in banks and insurance (to see) what they’ve done in the digital channel,” Ross says. “If you think back in those industries, five or seven years ago, the only leverage for the digital channel was sort of account maintenance and viewing, and there were not a lot of service offerings. That really contrasts with the services they have become known for offering today.”
With that in mind, Ross’s team at Lowe’s first set out to build an account page that would allow customers to do some of the things they would go to stores for – such as opening new customer loyalty accounts, getting quotes or having questions answered. Then the company added new services and products to its digital channels to build on the existing account-based features already offered.
More recently, the Morrisville, N.C. based company took a cue from mobile banking solutions offered by financial institutions and invested in building mobile apps, which offer many in-store services. The company’s consumer-focused app includes interactive store maps, allows application of digital coupons, extends location-based offers and facilitates access to product reviews. The employee app, on the other hand, enables retail store associates to access product locations, stock data and other information from an iPod.
And the efforts seem to be paying off. “Our digital channel has really started to grow quickly. We’ve grown tenfold over the past five years, and just this year alone we’re growing 30%-40% online,” Ross says.
In an effort to draw more mobile-savvy customers to its stores, the company has recently added scheduling features to the app, which allow customers to plan for delivery, installation, repairs or even get quotes on a repair or renovation from a professional. The company is also looking to offer customers the same advice or instruction they can get from associates in-store via live online chats.
Ross said that the improvements were designed to give customers the ability to complete more complicated tasks and experiences online instead of in the store. “We want to bring capabilities online that allow customers to handle these more complex journeys and projects entirely online. And our omnichannel journey to do that seamlessly and efficiently is never-ending.”
It isn’t just banks that have inspired Ross and his team at Lowe’s. The company is now in the process of adding new sections to physical stores, which look more like drive-through lanes at fast-food restaurants.“Customers can make the purchase online, identify the store closest to them, pick it up and do it all without ever getting out of the car,” he explains. “They ride through specially marked lanes, we notify associates that the customer is here and make it easy for associates to find the purchase, put it aside for the customer and bring it out to the car when they arrive to complete the purchase.”
Read the full interview in July’s Omnicommerce Tracker, along with other news and updates in seamless shopping. Here’s a sampling:
Ikea products now available on Amazon
Ikea furniture can now be ordered online via Amazon. Amazon is making it possible to order select items from the Swedish furniture giant’s large catalog without having to venture into its massive stores. Hundreds of Ikea items are already available on Amazon in Europe and the U.S.
Amazon to offer home try-on for clothes
Amazon is also venturing into the try-before-you-buy game. Customers in the Prime program can order up to 15 items at a time, try them on and return the ones they don’t want to keep. The items can be returned via a re-sealable box with a preprinted shipping label.
Best Buy to allow home trials of gadgets
Best Buy is partnering with Lumoid, a San Francisco startup, to let customers rent cameras, audio gear and other gadgets before committing to buy. If customers do decide to buy, the amount paid to rent the items can be applied to the purchase.
Sephora offers home try-on from the convenience of a smartphone
Beauty product supplier Sephora has enhanced the augmented reality feature on its app to enable to users to “try on” more than a 1,000 shades of blush, bronzer and highlighter. The app is even employing artificial intelligence (AI) that can decipher an image and estimate the shade in a photo. From there, the app can find a matching lip, cheek or eye product, which can also be tried on. All items can be purchased within the app.
Are digital tools “creepy” or “cool”?
A new survey by RichRelevance warns retailers to tread carefully in adopting certain digital tools. In the eyes of consumers, such innovations can walk a fine line between creepy and cool. Atop the creepy list is facial recognition technology that could identify a shopper as a loyal customer and relay his or her preferences to an in-store salesperson. U.S. consumers ranked this 69 percent creepy to 18 percent cool. On the flip side, 46 percent of U.S. consumers liked the potential to search and order products verbally using voice recognition technology — just 22 percent found this creepy.
Report: Airport retailers post $38 billion in sales in 2016
Not all brick-and-mortar retailers are suffering — at least not the ones with storefronts at busy airports. Airport shops posted $38 billion in global sales in 2016, according to a recent report by GlobalData. The group projects that sales will grow to $49 billion by 2021, a 27 percent increase.