Customers Want Brick-and-Mortar Stores to Be as Efficient as Ecommerce - eMarketer

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Customers Want Brick-and-Mortar Stores to Be as Efficient as Ecommerce

September 7, 2016

Hongwei Liu
Co-Founder and CEO

Omnichannel shoppers value efficiency, and physical retailers can’t outdo ecommerce powerhouses such as Amazon until they make the in-store shopping experience as efficient as online shopping. eMarketer’s Tricia Carr spoke with Hongwei Liu, ‎co-founder and CEO of retail wayfinding software provider Mappedin, about how retailers can make their in-store experience more attractive to today’s time-starved consumers.

eMarketer: Mappedin works with shopping malls in Canada and offers them a platform to create and manage digital, customer-facing store directories that are updated in real time. From your perspective, what is the biggest challenge for the retail industry?

Hongwei Liu: The biggest challenge for them is the rise of ecommerce, which is a symptom of changing consumer demands. People used to have time to browse in-store—it was how they discovered. Now online search and browsing is how they discover. It’s all about efficiency. Stores are not designed to be efficient. They’re not designed to give you exactly what you want as soon as possible, and it’s hard to change that mindset [among retailers].

It’s also amazing how good some of the online players are at understanding needs. They have a profile about me, they know what I like and they know what I’ll need next time I shop. Brick-and-mortar retailers don’t stand a chance unless they try to build that same level of understanding into their business.

“There is a lot of reactionary technology—retailers think, ‘They’re doing that, so let’s do it, too.’”

eMarketer: What consumer behaviors prove that shoppers want efficiency?

Liu: The daily, quick trips to the store have been disrupted. Now it’s more convenient to order a few things and have them shipped to my home. Those Saturday-afternoon shopping trips when you get a carload of stuff will still happen, but for two things I’m not going to leave my couch.

eMarketer: How far along is the retail industry in bringing the benefits of ecommerce into the physical store?

Liu: Everyone in the industry at least acknowledges the problem. No one thinks, “I don’t need to worry about Amazon. I just need to compete with the other stores [around me].” However, the industry hasn’t established best practices for how to make brick-and-mortar better through digital.

There is a lot of reactionary technology—retailers think, “They’re doing that, so let’s do it, too.” Everyone has invested in their ecommerce site. They want to rebuild the Amazon stack, but they don’t have as much efficiency because they’ll never have Amazon’s scale. But they can win by capitalizing on their brick-and-mortar footprint. They still dominate Amazon in store openings, but they need to catch up digitally in the store.

“Most in-store technology is not value-adding, but value-taking.”

eMarketer: Why does in-store technology usually fall short?

Liu: Most in-store technology is not value-adding, but value-taking. How can I blast people with coupons? How can I attract them? How can I make them download this app? It jumps too far and too quickly to, “How can I make money?” before asking, “How can I help people?”

eMarketer: What advice do you have for retailers as they plan for 2017?

Liu: Assign KPIs [key performance indicators] to everything you do. When investing in [new technology], KPIs will show how it helps your business. This way, the retailer’s team and their partners, vendors and agencies are all aligned.

Second, efficiency is the key to driving a growing basket in-store. The pool of people who have opted out—who say “this experience is not efficient enough for me and I would rather shop from home”—is growing. There is comparatively less efficiency when shopping in-store vs. online. Once you accept that, you can start figuring out how to go from there.

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