How digital marketing is changing retail

Digital marketing is increasingly being used in retail. AR and Digital Signage is preparing Retailers for the New Shopping

February 08 2022Björn Radde

Right on trend: digitalization in retail

Retailers are being challenged and should make even greater use of digital potential, whether for addressing customers, the shopping experience or the technical equipment of the store. Because demands are rising: According to a Bitkom study, what consumers want most is free in-store Wi-Fi, followed by real-time information about products in stock, special offers via app and navigation apps.

Five stars for location-based marketing

One hand holds a smartphone showing a shopping cart, in the background are supermarket shelves

A well-thought-out local SEO and platform strategy definitely delivers rewards to brick-and-mortar retailers. The shift to mobile, as well as the analysis of desktop PC dial-in data, has given online search queries local relevance. The 18 to 24 generation is the future consumer blueprint according to a new PwC study. Not only is it internet-savvy, it is also more focused on regional products, a general trend that we are currently seeing across all age groups.

Location-based marketing allows organizations to target consumers with online or offline messaging based on their physical location. Information such as opening hours or discounts, that is accessible online, is automatically sent to apps, search engines or navigation systems. In the future, in-vehicle voice assistants, such as those based on Amazon Alexa or Telekom’s Hallo Magenta, will be used as advertising, customer navigation or direct ordering tools, paving the way for new automotive business models and brand-new cooperation opportunities.

Across all channels

Omnichannel strategies allow customers to switch between high street store, web shop and social media, as well as giving them greater flexibility when it comes to delivery options, payments or click & collect models. For example, IKEA offers customers the opportunity to order online (click) and pick up the furniture at the store (collect). German supermarket chain Rewe has a similar system in place. These systems also guarantee the safety of customers and staff.

For retailers, it is important to create real experiences. Selling food or beverages online is difficult because their aromas can only be described, not experienced. Digital coffee doesn’t have that signature aroma because it’s impossible to recreate real-world consumer experiences online. Sandwich chain Pret a Manger’s multichannel coffee subscription service has driven up foot traffic at its British stores. Social shopping is another emerging trend. ShopShops’ scene scouts visit selected retail outlets in major US cities to livestream US fashions to Chinese shoppers in real time. Pinduoduo is a Chinese e-commerce platform that combines gaming with group buying. It has turned shopping into a genuine social media experience because the more people who buy a product, the lower the price gets.

Trendbook: Smart Retail

A smart digital strategy is the basis for strong customer loyalty. Optimize the e-commerce of your business!

Inspiring Technology

Technological progress has broadened the range of options available for engaging with consumers in both supermarkets and other retail outlets. (Interactive) digital signage – electronic displays showing texts, animations or videos – isn’t just a substitute for static advertisements; it can also be used to interact with customers, who can order additional services or home deliveries at the terminals. E-posters can display personalized content in real time thanks to logistics data and smartphone data. Other examples are electronic menus for high-profile promotions in food areas, or magic mirrors that also provide live information in virtual changing rooms.

Smart fridges use RFID chips to automatically create shopping lists and guide the customer to the products in the store, where virtual assistants can show explanatory videos and recommend additional products. Mobile payments are not a new technology, but the test labs at the German Research Center for Artificial Intelligence (DFKI) have simplified the process for retailers by making it possible for products to be charged via RFID without even having to take them out of the smart cart. German consumers would like to be able to scan their purchases themselves. German supermarket chain Edeka is testing self-scanning in the shopping cart. Rewe also allows customers to scan products themselves, using either a handheld scanner or a smartphone app. These technologies can be integrated into marketing strategies to create new customer experiences that increase traffic.

Customized products via smartphone

Augmented reality (AR) is also popular with consumers. New Apple devices are equipped with LiDAR (Light Detection and Ranging) sensors for more precision in AR experiences. This technology can be used to provide visually impactful product information, or to alter the color of a garment being tried on in front of an AR mirror without the customer having to change.

Personalized products are another key trend. Customers can personalize products via smartphone or tablet and 3D printer. Some years ago DFKI demonstrated how customers could choose the color and design the label of liquid soap themselves. Another popular app is the product magnifier. It allows customers to look at the package content in 3D or display product videos. Retailers can use these trends to encourage customers to visit their stores as many of the technologies become more affordable.

Fortified for the future

A woman stands in front of a refrigerator with virtual button

High street retailers can find a new lease of life in the digital age by creating points of experience. Although customers who have been shopping online since the outbreak of the coronavirus pandemic will continue to shop online, the current situation is also making people more aware of their local shopping options – and offering retailers location-based marketing opportunities. Competitive advantages can also be gained by networking omnichannel services such as click & collect, and many retailers are in the process of upgrading their IT for optimum digital connectivity. 

Special ICT solutions for Retail 4.0 combine network, data analysis and IT security technology for failsafe system operation and to get local retailers ready for the digital shopping world. Marketing organizations also have to become more responsive. Google offers them a new trend tool to understand fast-rising retail categories. Lastly, the results of a Trend Study on shopping in the year 2036 provides retailers with another ray of hope because it reveals that over three-quarters of German consumers believe real-life experiences will become all the more valuable as digital technology progresses.

About the author
Björn Radde, Vice President Digital Experience

Björn Radde

VP Digital Marketing & Innovation, T-Systems International GmbH

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