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Groupon: 'Technology key to high street retail'

High street retailers must use technology to deliver better value and customer service and emotionally connect with consumers or risk losing out to online rivals, according to a report from Groupon.

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The survey of 2,000 UK consumers found customers are increasingly interested in new innovations such as hologram projections of products, augmented reality and touch screens in stores. Some 31 per cent of respondents say this would improve their shopping experience, making products more compelling and desirable.

Customers also want a personalised shopping experience, with half saying they would like high street businesses to know who they are and what they want. The report suggests that retailers should make use of mobile apps and mobile technologies such as geolocation to “enhance their dialogue” with shoppers by creating personal and targeted communication. This in turn will help them build up an emotional connection with a brand, building loyalty and boosting shopper frequency and basket size in physical stores.

Richard Jones, VP of national accounts at Groupon UK and Ireland, says: “Shoppers, empowered by technology, are increasingly seeking a tailored and personalised service from retailers. By providing such a service, retailers should be able to nullify the low prices and (theoretical) convenience of online retailers.

“Despite the rise in online shopping and self-service technology, it seems that the back to basics approach of having physical stores and specialist staff on hand is critical, as consumers want to emotionally connect with the brand, talk to experts and physically see and touch products.”

The report says this means that rather than cutting back on costs such as staff and new technology, they should instead be investing in the in-store experience. While many are concerned this will lead to increased showrooming, where customers look at a product in store and then buy online, Groupon suggests this trend is more due to high street retailers’ inability to close a deal due to factors such as pricing, poor customer service and a lack of fulfilment options.

Groupon cites the example of Dixons, which it says is seeing growth in sales, profits and market share at a time when other dedicated electrical retailers have faltered. The report claims Dixons has invested heavily in staff training and the in-store environment and partnered with suppliers to enhance interactivity and retail theatre.

Despite these figures, a separate report from retail technology provider Omnico found that retailers in London’s West End are proving slow to adopt new technologies that can improve customer research. Only 14 per cent of stores on Oxford Street and Regent Street offer free Wi-Fi, just 8 per cent have touch screens in store and less than 3 per cent have mobile point of sale.

 

Readers' comments (2)

  • I'd like to see the socio-demographic breakdown of customers who can't wait for holograms and augmented reality. Were these 31 per cent all early adopters, or high income, or 18-35?

    For some retailers, such technology will make sense, but for many, it will detract from their proposition. For instance, I've watched the frustration and take-up of Tesco touchscreens, from those that are queuing behind children playing with them, to those who love the system, but then cannot find where the products are located in the store.

    Unless technology is implemented in a practical way, aimed at complementing the core pillars of retailing (compelling products, value-for-money, helpful staff, easy to access), it risks being more gimmick than guarantee.

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  • The most important task for any retailer is to get the basics right first. For example customers want to be able to easily see the price of every product in the store and understand every offer. They also want helpful staff, good product availability and no queues. When the basics are done well new technology can significantly improve the customer experience, if customers want it. The best way to find out is short trials where a concept is killed quickly if it doesn't work or rolled out quickly if it does. Personally I expect at least 50% of the technologies being promoted today as "game changers" to be virtually dead within a year. The challenge as always is knowing which 50%.

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