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For EBusiness & Channel Strategy Professionals

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook
by Fiona Swerdlow
December 22, 2016

Why Read This Report

Key Takeaways

Todays customers look for and buy experiences,


not simply products. Digital technology offers a
toolkit for retailers to engage customers with new
and enhanced experiences. At the same time,
digital technologies are transforming retail store
operations, allowing stores and store associates to
operate more efficiently and with greater flexibility.
This playbook instructs eBusiness professionals
how to transform their stores to enhance the digital
customer experience while also driving agility,
efficiency, and cost effectiveness through digital
operational excellence.

Digital Technology Will Enhance The In-Store


Customer Experience
Digital associate devices and consumer selfservice tools will add value in the retail store by
providing personalized assistance to customers in
the context of their shopping journeys.

This is an update of a previously published report;


Forrester reviews and updates it periodically for
continued relevance and accuracy.

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Store Operations Will Be Kicked Up A Notch


Or Two
Digital technologies will augment store
operations, significantly boosting efficiency
and intelligence in areas such as staffing, task
management, omnichannel fulfillment, and loss
prevention.
The Digital Store Playbook Will Show You The
Way
Forresters digital store playbook helps eBusiness
and channel strategy professionals transform the
retail store with digital technologies, enhancing
both the customer experience and in-store
operations.

For eBusiness & Channel Strategy Professionals

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook
by Fiona Swerdlow
with Stephen Powers, Martin Gill, Lily Varon, Sam Wolken, and Sam Bartlett
December 22, 2016

Retailers Must Evolve To Keep Pace With Customer Demand


In an extraordinarily competitive marketplace, eBusiness retail professionals must derive a competitive
advantage from obsessing about their customers and creating rich, meaningful experiences for them.1
Forrester data indicates that online retailers trounce traditional retailers when it comes to providing
superior customer experiences and that online retailers have the superior revenue growth to match.2
Ultimately, retail businesses that survive cutthroat competition and finicky shoppers will be those
that adapt to ever-evolving consumer behaviors and expectations both online and in the physical
store. So how do customers today differ from customers in years past? eBusiness leaders need to
understand that:
Consumers are always connected. Smartphones have empowered customers to research and
complete purchases anywhere. A majority of US smartphone users report accessing the internet
while in a physical store (68%), in the car (67%), and in restaurants (64%).3 Consumers have also
become quicker to see value in new technology. In 2001, the year after the iPods release, only 3%
of US online adults expressed an interest in buying an MP3 player; in 2015, the year that the Apple
Watch was released, 35% of US online adults indicated they were intrigued by the prospect of
purchasing a wearable device.4 The line between physical and digital retail experiences is blurring
for connected consumers.5
Digital has fundamentally altered consumer expectations across all touchpoints. Higher
consumer expectations are no longer limited to just the digital shopping experience. Consumers
expect physical stores to deliver the same product assortment, rapid delivery, and product
information that they get online. Today, shopping online is mainstream: In 2016, an estimated
59% percent of US adults made a purchase online in the past 12 months, up from 46% a decade
earlier.6 But they expect online and offline touchpoints to work together seamlessly: Forty-four
percent of US online adults also are less likely to visit a store if the stores inventory is not available
online, up from 26% just two years ago.7

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distributing is a violation of copyright law. Citations@forrester.com or +1 866-367-7378

For EBusiness & Channel Strategy Professionals

December 22, 2016

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook

Hyper-connected shoppers are rewriting the rules of commerce. Consumers view their
mobile devices as trusted advisors while shopping in-store. They expect to get the information
or services they want in-aisle, especially via their mobile devices whether validating the prices
and information they find in-store or buying from a competitors website (see Figure 1). As Johnna
Marcus, senior director of Sephoras Innovation Lab, observed some years ago at a Shop.org
event, You never want your store associates to have less information than your customers. For
many retailers, the first step is equipping stores and associates with the technologies that will
deliver improved experiences and services.

FIGURE 1 In-Store Shoppers View Their Mobile Devices As Trusted Advisors

In the past three months, what did you do when you researched products/
services on your mobile phone while shopping in a physical store?
48%

Compared prices
41%

Looked up product information

37%

Searched for a coupon

36%

Read customer reviews of a product


29%

Accessed the internet via guest Wi-Fi


Accessed a shopping list
Checked out coupons sent by a
retailer/manufacturer

28%
27%

Checked the stores availability of a product


(in physical store or online)

24%

Located a nearby store or checked store hours

24%

Base: 1,225 US online adults (18+) who researched products online on a smartphone
Note: Not all response options are shown.
Source: Forresters Consumer Technographics North American Retail And Travel Online Benchmark
Recontact Survey 1, Q3 2016 (US)

2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.
Citations@forrester.com or +1 866-367-7378

For EBusiness & Channel Strategy Professionals

December 22, 2016

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook

Digital Technology Creates Value In The Retail Store


Digital store transformation that is, strategically incorporating connected technology in retail
stores is a multipronged pursuit that involves enabling exceptional customer experiences inaisle while also driving beneficial operational improvements such as real-time task management for
associates. Digital in-store technology creates value for both retailers and customers by:
Providing a better in-store customer experience. Digital devices allow store employees to create
more valuable engagements with customers by performing functions such as ordering an out-ofstock item or providing personalized product recommendations. Immersive experiences, such as
connected dressing rooms, are reinventing how technology and digital signage help build baskets
and improve conversion. Self-service tools like in-store apps add value for customers by allowing
them to access relevant content and information such as context-relevant in-store mapping,
product location, and special offers.
Optimizing store productivity and operations. Creating operational efficiencies lifts retailers
bottom lines and frees up associates to focus on their most important responsibility: engaging with
customers. Digital store platforms can connect technology inside and outside the store to improve
where products sit in-aisle, choose more effective inventory assortments, redeploy associates to
more urgent tasks, or selectively match associates with the tasks for which they are best suited.
Additionally, digital technologies produce actionable intelligence for retailers in areas such as
staffing, inventory visibility, and loss prevention.
Enabling real-time actions and insights. Development and deployment are still riddled with
challenges, but retail store analytics promise to meaningfully improve operations and growth.8
Digital store ecosystems will unlock new value by allowing stores to turn real-time data into
actionable insights. Retailers will be able to provide relevant and contextual experiences to
customers and associates in their moments of need by tapping into real-time analytics and
customer data and combining these insights with location, time of day, weather, and advanced
sensor data such as physical activity.

The Digital Store Playbook Guides You Through Transformation


Forresters playbook helps leaders at retail organizations plan effectively for digital store transformation,
identify the tools and technologies necessary to execute on the plan, and measure and improve current
offerings (see Figure 2). The complexity and scale of this transition should not be underestimated, but
the playbook approach will take you through step by step to ensure success. eBusiness professionals
should use these playbook reports to:
Discover the impact of digital store transformation. Forresters digital store playbook examines
the value of using digital technology to enhance the in-store experience for both customers and
associates. It covers the technologies and vendors that power the digital store, and it analyzes the
cost of investing in a digital store strategy.
2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.
Citations@forrester.com or +1 866-367-7378

For EBusiness & Channel Strategy Professionals

December 22, 2016

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook

Plan and evangelize your digital store transformation. Within the playbook, we cover the
process of digital store transformation and map stakeholder responsibilities and objectives. We
also set you up for success in communicating your strategic vision and implementing effective
plans throughout your organization.
Act with agility and test as you go. Digital store transformation requires a visionary leader who
can rally senior executives to support these initiatives. However, this leader must also be able
to execute and prove value to the organization, including making decisions on the technologies
needed for success. Forresters in-depth TechRadar analysis guides retailers on the tools and
technologies that power the digital store, as well as the people and processes needed to use those
tools at their full potential.
Optimize functionality to incorporate evolving customer demand. To successfully embrace the
complexity that store technology presents to the sales and service experience, retailers must have
a deep understanding of its impact on the customer. We provide consumer data and benchmarking
information to help you stay ahead of customers needs and expectations.

FIGURE 2 The Digital Store Playbook

DISCOVER

PLAN

ACT

OPTIMIZE

Vision

Assessment

Organization

Performance
Management

Landscape

Strategic Plan

Processes

Benchmarks

Business Case

Road Map

Tools And
Technology

Continuous
Improvement

2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.
Citations@forrester.com or +1 866-367-7378

For EBusiness & Channel Strategy Professionals

December 22, 2016

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook

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Supplemental Material
Survey Methodology
Forresters Consumer Technographics North American Retail And Travel Online Benchmark
Recontact Survey 1, Q3 2016 (US) was fielded in May and June 2016. This online survey included
4,400 respondents in the US between the ages of 18 and 88. For results based on a randomly chosen
sample of this size, there is 95% confidence that the results have a statistical precision of plus or minus
1.5% of what they would be if the entire population of US online adults (defined as those online weekly
or more often) had been surveyed.
Forrester weighted the data by age, gender, income, and region to demographically represent the US
online adult population. The survey sample size, when weighted, was 4,399. (Note: Weighted sample
sizes can be different from the actual number of respondents to account for individuals generally
underrepresented in online panels.) Lightspeed Research fielded this survey on behalf of Forrester.
Survey respondent incentives include points redeemable for gift certificates.

2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.
Citations@forrester.com or +1 866-367-7378

For EBusiness & Channel Strategy Professionals

December 22, 2016

How To Transform Your Retail Store


Executive Overview: The Digital Store Playbook

Endnotes
The age of the customer is here. Weve entered an era of destabilizing and erratic supply-and-demand imbalances
across the global economy. Empowered by technology, customers have more leverage than ever before. Companies
must respond by becoming customer-obsessed. Transforming customer experience is one of the four market
imperatives necessary to drive the shift to a customer-obsessed company. For the other three market imperatives and
more on the importance of customer experience, see the Forrester report Winning In The Age Of The Customer.

To read more about the relationship between customer experience and business success, please see the Forrester
report Customer Experience Drives Revenue Growth, 2016.

Source: Forrester Data Mobile, Smartphone, And Tablet Forecast 2016 To 2021 (Global) and Forresters Consumer
Technographics North American Online Benchmark Survey (Part 1), 2016.

Source: Forresters Consumer Technographics 2002 North American Benchmark Study and Forresters North
American Consumer Technographics Consumer Technology Survey, 2015.

Customers have changed in measurable ways. To learn more about how evolutions in customer behaviors and
attitudes are manifesting themselves, as well as the level of urgency with which brands must move toward customer
obsession, see the Forrester report The Rise Of The Empowered Customer.

Source: Forrester Data Online Retail Forecast, 2016 To 2021 (US).

Source: Forresters Consumer Technographics North American Retail And Travel Online Benchmark Recontact Survey
1, Q3 2016 (US) and Forresters North American Consumer Technographics Retail Online Benchmark Recontact
Survey, 2014.

eBusiness leaders have a lot to offer retail store executives as they embark on injecting digital commerce technology
into the physical store. Retail stores have been living in the analytical dark ages in comparison to digital channels,
relegated to measurement techniques that rarely take into account customer behavior. However, advances in locationbased analytics technologies are transforming how retailers win, serve, and retain customers within the physical store.
For more on the key metrics that retail store analytics will unleash and the challenges retailers face in transforming
their physical stores, see the Forrester report Analyze This: Web Style Analytics Enters The Retail Store.

2016 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.
Citations@forrester.com or +1 866-367-7378

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