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Retailing: Changing Customer Purchase Experience in the digital era

Dr. S. Shyam Prasad
In the early days of human existence, man hunted and gathered things on his own. He met his ‘needs’ on his own. With the emergence of agriculture around 8000 BC, the society became more efficient and developed the ability to produce more than their own requirements for exchange. Trading developed in the then developing world and much of it was conducted by the barter system.  As the trade grew with greater variety of goods, the concept of ‘money’ evolved.  And it is money, with its power as a universal medium of exchange, which has come to stay as the back bone of the retail business. It was not until the industrial revolution in 18th and 19thcenturies that retailing saw a big leap in its stride. The mass production enabled the products to be available to the majority and opened up the market. This ushered in different types of shops. As the process of evolution, better-organised retail formats emerged steadily replacing the informal market traders; these new ‘shopkeepers’ as they became known, employed shop fronts with their proprietor’s name above the door – trust and brand identity had been born (The Store, WPP, 2013). However, it was the appearance of departmental store in 20th century with huge number of disparate goods available for shopping in a single place with some forms of entertainment and hospitality changed the concept of retailing. It has changed the shopping experience from one that of drudgery and serious business to one that is of leisure and fun. The other difference is that earlier we were conscious of the outflow of money and now probably it is subliminal. Online and digital shopping enabled by the internet will utterly transform the retail landscape and dramatically change the citizen consumers role within it (The Store, WPP, 2013).
Internet Marketing
Internet has changed the traditional business such as retailing prodigiously. A decade ago, online stores or e-marketing was an augmented part of marketing. It is all changed now. E-marketing is expected of all businesses. It has modified the way the things are marketed. The impact of technology on business is steadily increasing with the increase in online stores. We have moved from fantasizing arm chair shopping to real online experience. Let us see how exactly the technology is changing the way we do business.
There are still a very few companies that are not got into the technology stride. However, most of the businesses have understood the enormous business potential of using technology and the digital presence. 
McKinsey Center for Business Technology researched on the evolution of technology – driven business performance and listed out 75 different examples of innovation and enablement. (Brown, Schuler, & Sikes, January 2012). The five areas that stood out are

1. Customer Experience,
2. Process Effectiveness,
3. Business Integration,
4. Data and Information and
5. New Products and Services.

The Internet is all pervasive, from professionals to amateurs, old to young and urban to rural. More than two billion people are connected to Internet. It has ushered in new models of businesses not thought of earlier. Nearly $8 trillion exchange hands each year through e-commerce. (Rausas & Others, January 2012)
The Internet has changed the way we live and work. With the advent of social sites, it has also changed the way we interact with others and has further impacted the language. What was once a network for scientists has now emerged as an essential tool for business and common man.  Online retailing, the main commercial application for the Internet is a powerful driver for globalization of business. Internet marketing has now provided the customers with endless online and off-line options for searching and buying any products or services. By 2016, the web will influence more than half of all retail transactions, representing a potential sales opportunity of almost $2 trillion[1]
Customer Experience
Of the five areas identified above where the technology is being increasingly used, our focus in this article is confined to customer experience. Customer experience considered in this article is the aggregate of all experiences a customer has during the purchase process with the seller of goods and/or services. This article does not look in the customer experience upon using the products and /or services purchased by the customer.
How companies engage customers in the digital channels matters profoundly—not just because of the immediate opportunities to convert interest to sales but because two-thirds of the decisions customers make are informed by the quality of their experiences all along their journey, according to a research.[2] “Mobile is accelerating the pace of change and presenting the retail industry with game changing challenges. Widespread availability of price and product information requires retailers to rethink what distinguishes and defines their brands.”  Hugh Owen, VP of Mobile Products at MicroStrategy. 
“The ‘wall-less’ metaphor is one that has conceptual appeal for framing the 2020 retail marketplace. More and more retail volume is expected to come from non-store-based retail and stores will come under increased productivity and competitive pressures.” (PwC/Kantar Retail, 2012)
Let’s consider what an optimized cross-channel experience could look like when companies acquire the improved capabilities in near future.
Imagine that a couple has just bought its first home and is now looking to purchase a washer and a dryer. Dev and Leena start their journey by visiting several big-box retailers’ websites. At one store’s site, they identify three models they are interested in and save them to a “wish list.” Because space in their starter home is limited—and because it is a relatively big purchase in their eyes—they decide they need to see the items in person.
Under an optimized cross-channel experience, the couple could find the nearest physical outlet on the retailer’s website, get directions using Google Maps, and drive over to view the desired products. Even before they walk through the doors, a transmitter mounted at the retailer’s entrance identifies Dev and Leena and sends a push alert to their cell phones welcoming them and providing them with personalized offers and recommendations based on their history with the store. In this case, they receive quick links to the wish list they created, as well as updated specs and prices for the washers and dryers that they had shown interest in (captured in their click trails on the store’s website). Additionally, they receive notification of a sale—“15 percent off selected brand appliances, today only”—that applies to two of the items they had added to thei
r wish list. When they tap on the wish list, the app provides a store map directing them to the appliances section and a “call button” to speak with an expert. They meet with the salesperson, ask some questions, take some measurements, and close in on a particular model and brand of washer and dryer. Because the store employs sophisticated tagging technologies, information about the washer and dryer has automatically been synced with other applications on the couple’s mobile phones—they can scan reviews using their Consumer Reports app, text their parents for advice, ask Facebook friends to weigh in on the purchase, and compare the retailer’s prices against others. They can also take advantage of a “virtual designer” function on the retailer’s mobile app that, with the entry of just a few key pieces of information about room size and decor, allows them to preview how the washer and dryer might look in their home.
All the input is favorable, so the couple decides to take advantage of the 15 percent offer and buy the appliances. They use Dev’s “smartwatch” to authenticate payment. They walk out of the store with a date and time for delivery; a week later, on the designated day, they receive confirmation that a truck is in their area and that they will be texted within a half hour of arrival time—no need to cancel other plans just to wait for the washer and dryer to arrive. Three weeks after that, the couple gets a message from the retailer with offers for other appliances and home-improvement services tailored toward first-year home owners. And the cycle begins again.[3]
This article has discussed how the retail business is transforming from a mom and pop shop to a completely high-tech e-shop where one could shop with just a mobile in hand. The customer can buy anything from anywhere at any time right from wherever he or she is. The above narrative of the couple brings out the future customer experience and the potential of technology.  The successful retailers will be those who possess superior understanding of their customers, their buying behaviour etc. They are also likely to have better grasp of different market segments and their potential. Further, the successful retailer will be the one who has integrated all the above knowledge to build a true omnichannel operation that  would provide a seam less buying process on a 24/7 basis, anywhere at any time.
As a sequel to this, it is proposed to study the present consumer experience in India.
Brown, B., Schuler, S., & Sikes, J. (January 2012). How CEOs can shift the focus on technology from a backroom cost to a business model enabler. In M. C. Technology, Perspective on Digital Business(pp. 10-11). McKinsey & Company.
PwC/Kantar Retail. (2012). Retailing 2020: Winning in a polarized world. PwC and Kantar Retail.
Rausas, M. P., & Others. (January 2012). Internet matters: The Net’s sweeping impact on growth, jobs and prosperity. In M. C. Technology, Perspectives on Digital Business(p. 20). McKinsey & Company.
The Store, WPP. (2013). The History of Retail in 100 Objects. (D. Roth, Ed.) The Store, WPP.

[1]Sucharita Mulpuru, US Cross-Channel Retail Forecast, 2011to 2016, Forrester Research, July 2012,
[2]See Peter Dahlström and David Edelman, “The coming era of ‘on-demand’ marketing,” McKinsey Quarterly, April 2013,
[3]The story has been taken from Digitizing the consumer decision journey by Edwin van Bommel, David Edelman, and Kelly Ungerman, McKinsey&Company, June 2014.

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