3 Puzzles of In-Store Vs. Online Retail Analytics

Ask what is the biggest challenge in retail today, and the common answer is analytics. In particular, the big challenge is how to create end-to-end customer analytics.  To overcome this, we need to be more precise in what we are searching for. When we look at the differences between online and in-store customer experience, we find three puzzles.

1. Online Linear Vs. In-Store Parallel Journey

The first puzzle relates to the Customer’s Journey. The shopping paths inside the web store and the physical store are, at their essence, different.

Visiting the online store is a linear journey. A customer lands on a specific webpage, and then moves around in yes/no steps. This is a straight workflow. In a sense, people visit a website in the same manners computers operate. Shopping is a binary process of either staying on a page, or moving to another page.

As a result, we have much power to control the online journey. We can design a better Call to Action. We can have a better workflow. The User Experience disciple is based on how to better entice customers to do what we want. In short, we manage the online path to purchase.

This kind of linear thinking does not work in physical stores.

We cannot control the individual journey. By its nature, the physical store is not designed for a single person. Moreover, one of the interesting aspects of tracking data is how many surprises we find in the data. We may assume that people behave in the store in a certain way, but many times the “unexpected” is what happens in reality.

Think about a supermarket. Most people enter the store and go directly to the dairy, meat, or produce sections at the corners of the store. This is not coincidence. The design of a store takes into consideration what people tend to buy. The idea is to “push” the customers to go through the center isles. In reality, most people ignore the main aisles and stick to the perimeter of the store.

Optimization of physical stores is complex but feasible. New concept stores shed away traditional thinking. New layouts emphasis the circular customer flow, and open views. This is why you see wider low-rise aisles and stations (i.e. salad bar). This design changes the nature of the Customer’s Journey.

The question is why these concept stores work better. And the answer lies in behaviors. People have the opportunity to move in parallel, and browse segmented stations. It’s no longer about a linear workflow, rather a design of elements.

The success of such concept stores comes from watching people. The competitive landscape does not allow us to build a store and expect people to adapt to our wishes. Thriving brands start from Behaviors First. They build stores by learning what customers want.

2. Digital World’s 1 Sense vs. Physical Store’s 5 Senses

The second puzzle we need to solve is the human attention to the senses.

In the digital world, we deal with only one sense – vision. That is changing with sound. Think about Amazon’s Alexa. Still, most of websites, even mobile applications, focus on visual design.

Yet in physical stores, you have no option but to deal with all 5 senses. You design the complete sensual experience. Vision and sound join smell, sense and taste.

Online, much of the optimization work is done by focusing on eye movements. For example, Google tests how humans gaze at ads, and how to display pricing. We test for eye movements to design Call to Actions. Testing how we see, scroll, and move in pages is a critical component in designing profitable online store.

Some of that technology is also used in the physical store. We can capture images of shelves and see which products are out of stock. Yes we cannot control people behaviors. And working with static rules tends to backfire.

Take, for example, planograms for the apparel store. If you worked in a store, you know that everything moves. Cloths get sold and shifted around. The displays (unless fixed to the wall or floor) are flexible. Retailers have a corporate function that designs virtual planograms. But the floor associates do what they want in their local store. It is the endless debate between top-down management and reality.

The five senses have a huge influence on the physical store, even if we are not aware of them. Think about Starbucks and the strong smell of coffee. When you walk into a grocery store, your sense of smell attunes to the stronger smells such as fresh baked bread. Brands such as Whole Foods cater to such sensual design.

Music is also a powerful tool to entice shopping. Teen fashion retailers play different tunes than department stores. And if there is no music, than all you hear are the sounds of the store itself.

Atmosphere is a big part of the physical store. If you are in New York, visit Columbus Circle, Greene Street in Soho, and flagships of Apple and Samsung. Each store has a distinct flavor, and each plays havoc with our senses.

In the physical store you must think about all the components of the experience. In that sense, the online store has a much easier time. How people react to a local environment is a key component in the physical store.

3. Personal Journey vs. Social In-Store Experience

The third puzzle comes from the trend of Personalization. While customization is big, and should be big, in the online world, personalization does not work in the physical world. The bricks-and-mortar store is, by nature, social.

Pushing for Personalization in physical stores, in many ways, does not make sense.

You can customize digital screens, but you should not design the physical store for individuals. You should design for customer segments.

One example is Buying Groups. There is a difference in behaviors if a mother shops for kids clothes, with or without her children. The shopping path, and the experience, is very different. Segmentation has to take into account not only the products, but also the way people shop.

Another example is Demographics. Americans are likely to impulse buying. Asians tend to pre-plan. A London store is for the single urban shopper. A store in Wales caters to families.

Personalization plays a huge role in online marketing. But in the physical store, segmentation dominates.

Conversion Optimization for physical stores has similar elements to Online CRO, but there significant differences. Pricing is an example among many optimization points. By focusing on customer journeys, event points, and social metrics, we let data paint a picture of the store. With the frameworks of behavior analytics, we optimize the physical store.

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