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The Future of Retail: Hybrid Models

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Alex Selwitz | April 6, 2023

“Discover how to implement hybrid experiences in retail for a seamless omnichannel customer experience.”
6 min read
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    A typical retail shopping journey today has multiple physical, digital, and mobile touchpoints. This hybrid and omnichannel retail model has steadily grown since the beginning of eCommerce stores and has skyrocketed during and after the pandemic.

    According to a 2022 IBM consumer study, 27% of all consumers say that hybrid shopping is their primary buying method. In the case of Gen-Z, this number goes up to 36%. Knowing that Gen-Z consumers are born from 1997 onward, they hold plenty of purchasing power and will continue to do so even more.

    So, if your retail business isn’t ready for an influx of Gen-Z shoppers, you better do it soon. Here are some practical ways to help you adjust to this hybrid omnichannel retail model and provide an amazing experience to your customers:

    Benefits of hybrid experiences in retail

    Retail stores have yet to understand and experience all the benefits of hybrid shopping. There are so many benefits and reasons to have an online presence. To name a few:

    • A more personalized shopping experience
    • Better customer satisfaction and loyalty
    • Greater customer reach through multiple online and offline channels
    • Increased engagement and multiple touchpoints for customers to interact with your brand
    • Increased foot traffic thanks to in-store pickup or returns for online purchases
    • A competitive advantage among other retailers
    • Better operational efficiency, reduced waste, and reduced costs

    And, of course, perhaps the biggest benefit of providing hybrid experiences as a retailer is the possibility to analyze consumer behavior with unique sales data. Leveraging these insights you canand optimize every aspect of your store, especially things like inventory management, marketing, or customer service.

    Strategies for implementing hybrid experiences in retail

    When switching from a brick-and-mortar to a hybrid business, there are four main areas you need to examine and adjust if necessary:

    • Consumers (buyers)
    • Products
    • Employees
    • Operations

    All of these key elements have to be ready for this digital transformation. Let’s see how:

    1. Creating a unified brand across all online and offline channels

    To deliver a seamless omnichannel customer experience, you need to ensure complete consistency and transparency across all channels.

    This can be achieved through a dynamic CRM platform that gathers and records all customer interactions across various digital and in-person channels. With this data, the platform will create a single customer view to predict needs and streamline every contact.

    With a detailed view of the customer's journey and relationship, retailers can react instantly and choose personalized actions based on the customer's profile, including lifetime value, preferences, sentiment, patterns, and their most recent interaction history. The result will be a more personalized and consistent service.

    Your branding and appearance also matter, so ensure you use consistent logos, brand colors, and values throughout all channels to stay recognizable.

    2. Integrating inventory and fulfillment operations

    In terms of inventory, a hybrid approach often requires having one centralized view of your inventory. This means that all locations, whether brick-and-mortar or online, should have access to the same inventory information.

    One effective way to improve inventory management in a hybrid store is to use technology and data to help you analyze trends and spikes in demand.

    The following key area of focus should be order fulfillment, especially if you’re implementing an online store and eCommerce fulfillment to a previously physical-only store.

    As a hybrid store, you should aim to use different fulfillment and pick-up options that would provide flexibility and convenience to your customers. One such option is Buy Online, Pick Up In-Store (BOPIS), which allows customers to purchase products online and pick them up at the brick-and-mortar location. This option saves time and eliminates shipping fees. Another option is Curbside Pickup, where customers can place an order online and have it delivered to their vehicle outside the store.

    These fulfillment and pick-up options provide customers with various choices that fit their needs and preferences, making their shopping experience more convenient and enjoyable.

    3. Designing ultra-personalized shopping experiences

    According to a recent McKinsey study, customers will expect hyper-personalized experiences by 2025. Luckily, thanks to data analysis and AI tools, retailers today can offer incredibly personalized experiences to their customers, both online and in-store.

    Some great personalization activities are:

    • Showing relevant product recommendations
    • Tailored messages and targeted promotions
    • Triggers based on customer behavior
    • Communicating timely at key touchpoints
    • Curate content based on the customer’s specific interest

    Perhaps the best example of a successful personalized shopping experience is the retail giant Sephora.

    In March 2020 when the pandemic hit, Sephora closed its physical stores. But, instead of seeing it as a setback, they embraced the situation and pivoted to appointment-based personal shopping and VR demos and tutorials.

    As they saw their efforts paid off, they introduced their AR fitting room and Color IQ technology that scans a customer's skin to recommend matching foundations.

    As the cherry on top, they provided free shipping, same-day delivery, and flexible in-store or curbside pickup options.

    Sephora's successful implementation of these personalized shopping experiences led to increased market share even after the pandemic's impact diminished.

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    4. Implementing the right tools and technologies

    At this stage, you should start implementing the right software and tools to help you offer a unified hybrid experience to your buyers.

    First, make a plan for the type of technology you need to implement based on customer needs. For instance, maybe you’ve realized that your customers want contactless payments to speed up the line.

    In the case of brick-and-mortar stores transitioning to hybrid stores, finding the right store builder and ways to accept online payments could be the priorities in terms of new technologies.

    Here are some more examples of hybrid workplace technology you might want to consider:

    • Internal collaboration and communication tools
    • AI-trained chatbots for customer interaction
    • PoS systems for checkout
    • Data and analytics tools to predict seasonal demand changes
    • Flexible payment options online and in-store
    • Digital marketing and automation tools for reaching out and engaging with consumers
    • AR and VR technologies that allow customers to get in touch with the product virtually
    • CRM tools that will allow you to see a unified view of a customer’s profile across all channels

    5. Training your employees to work in a hybrid environment

    Although people analytics largely rely on tools in hybrid stores, customer service representatives will remain an important factor in providing an impeccable experience.

    To do this, you need to ensure that your retail employees, especially those with customer-facing roles, are properly trained and educated. Having the right tools means nothing if you don’t use them to their full potential.

    There are many ways to transfer this technical knowledge to your staff, such as:

    • Mobile learning on the go
    • Job shadowing or mentoring
    • In-person training sessions and workshops
    • Online training modules, courses, and quizzes
    • Knowledge-sharing platforms and internal social networks
    • Gamification and interactive training programs
    • Cross-functional training and job rotations

    Lastly, teaching your employees to work in a hybrid environment involves not only technical knowledge but also soft skills such as communication, adaptability, and problem-solving. Employees need to be able to communicate effectively across different channels, understand and adapt to new technologies and processes, and solve customer issues quickly and efficiently.

    Wrapping up

    Hybrid experiences are undoubtedly transforming the retail industry, providing customers with the best of both worlds - online convenience and in-person engagement.

    So, to remain competitive as a retailer, you need to adapt to this changing landscape and invest in technology allowing online and offline channels integration. You should prioritize the creation of unique, personalized, and immersive experiences that offer real value to your customers.

    By embracing the power of hybrid shopping experiences, you can scale your business but also strengthen customer relationships. It’s definitely an exciting time for retail, and those who embrace change will reap the rewards.

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