How “Live Retail” Transforms the In-Person Shopping Experience

Innovative retailers are using real-time data from their apps — in other words, when customers use in-store mode on retail apps and frontline employees use their companion apps for assistance — to understand, shape, and optimize what’s happening for customers in physical locations.

Key takeaways 

• With live retail experiences, the physical, in-person shopping experience itself becomes more like a website or app. 

• Retailers are augmenting their employee apps with AI to help team members improve their product knowledge and solve problems faster on the spot. 

• Thanks to the data now available through consumer and employee retail apps, retailers have better insight into the in-person retail customer experience than ever before.

One of my favorite books, some might call it the bible of retail, is a book called Why We Buy by Paco Underhill. Before this book came out in 1999, retailers didn’t have much insight into what drove shopper behavior. Executives were curious, and brands conducted research in this area, but Underhill really took our understanding of what shapes consumer activity inside stores to the next level. 

How he did this was simple: He set up a bunch of cameras and observed people in the act of shopping. And then as a follow-up, he conducted interviews to learn not only what consumers were doing, but why. 

His work has been instrumental in delving into the thought process of shoppers as they navigate and make purchases in physical stores. And it has informed store layout, shelving height, product placement, signage, employee engagement, cash wrap efficiency — you name it. But since then, for years, our understanding hasn’t progressed much. Even after ecommerce took off, we learned a lot about digital behavior, but the stores themselves have remained data-poor.

While it’s easy to see where online customers come from — what types of products and brands they view, what they add to their digital carts, what they end up buying, how long their visits are, and when they come back — for the most part, we’ve lacked visibility into the ways in which customers interact with things like products, employees, and signage in a physical store environment.

But that’s changing. 

And the reason that’s changing is because of this concept I like to refer to as “digital in the analog,” “digital in the physical store,” or simply live retail.

The Advent of Live Retail (Digital Experiences in Physical Retail Stores) with App In-Store Mode

Originally, websites and mobile apps enabled consumers to complete transactions online without having to visit physical stores — supercharging the ecommerce side of the business. But with the popularity of buy online / pickup in-store, curbside pickup, and same-day delivery, the lines between digital business and brick and mortar stores have been blurring.

Early mobile innovators within the retail industry saw an opportunity to create a new strategy. They leveraged their mobile apps as companions for the in-store experience to create a new “store plus digital” experience — what some in the industry have dubbed “phygital” (physical plus digital) experience, or what I call live retail experience.

That’s how the in-store mode in retail apps came to be. They offer features that pop up in the app when consumers are in a physical location, such as store navigation, product comparison product reviews, self-checkout, and interactive virtual reality features that allow consumers to take a picture of a product, such as a couch, and see what it would look like in their homes. 

In Star Trek II: The Wrath of Khan and Star Trek II: The Search for Spock, there’s a technology called the Genesis Device that enables planets that were once dead to be brought to life through a process called terraforming, and that’s what’s happening with these kinds of live retail experiences — they’re bringing the once data-poor world of analog retail to life with new data.

What does that mean? That means that the building itself — the physical, in-person shopping experience itself — becomes more like a website or app. 

Retailers now can track when app users visit a store, how long they stay, how they navigate the store, which products they search for, whether they purchase, what items they end up converting on — the in-store mode of mobile apps has truly opened up a wealth of customer signals for retailers. 

And this is only the beginning. 

The Next Wave of Live Retail, with the Rise of Companion Apps for Frontline Employees

The other side of live retail is helping brands upgrade what’s traditionally been an analog employee experience with digital data and AI.

As part of my job as a retail industry executive advisor at Medallia, I’ve had the chance to speak with frontline store employees to learn about their experiences firsthand. 

As part of these discussions over the last several years, what I used to find was that the employees were downloading the consumer version of the retail app on their own and using it to better serve customers at their local stores, turning to the app to answer questions such as where products were located or whether an item was in stock.

Their employers eventually caught on and started introducing employee apps to serve as digital companions for frontline employees, giving them a whole new way to provide customers with better experiences. It was now possible to do things like look up their store’s inventory and ship out-of-stock items available nearby or online to customers’ homes right from their handheld devices.

These days, retailers are augmenting their employee apps with AI to help team members improve their product knowledge and solve problems faster on the spot. 

Take home improvement stores. Now when customers ask a question related to plumbing, any associate with a wearable device and an earpiece can get answers by either asking the employee app that contains a generative AI-powered knowledge base, or by getting connected to an available product support specialist in real time. There’s no need to physically track down an employee with more in-depth knowledge to provide support. 

What Live Retail Means for the Future of Customer Experience

Historically, we’ve seen that when customers engage with employees, they’re more likely to spend more. In other words, employee engagement drives higher average order values. But now the in-store mode of the app can do the same, serving as a silent associate. 

Thanks to the data now available through consumer and employee retail apps, retailers have better insight into the in-person retail customer experience than ever before. With these learnings comes the power to influence and, ultimately, orchestrate the customer experience for the better — driving conversions and higher average order value, the same way retailers have been able to on the ecommerce side of the business. 

If I go to a retailer’s website, my homepage experience is going to look different than yours, based on what the company knows about each of us. That insight drives recommendations to deliver a more curated experience, and now that can start happening in the store as well. For instance, retailers can take digital browsing and engagement data and use that to retarget users, sending notifications about items they’ve seen but not purchased. Or they can recommend related items when they visit a physical location.

Another potential use case: If the average browsing time for a given store visit is typically 10 minutes, retailers could use digital feedback tools to send a message to customers when they’ve been in the store longer than 10 minutes to ask them if they’ve been able to find everything they’re looking for. If the customer responds no, that could trigger an alert to notify an in-person or digital associate to proactively offer help, either in the store or in the app. 

Now there are some exceptions, of course. Luxury retailers, and retailers that benefit from offering a high-touch experience, may not want to lean too heavily on using their apps. These kinds of digital interactions can’t compare to the experience of engaging with highly trained, personable employees.

But for most retailers, the combination of the employee companion app and the consumer retail app will make it possible to augment the experience, scale personalization at the one-to-one level, and lead to an uplift in sales for stores. Going forward, once retailers have the data, they can build out conversion funnels on the in-person side of the business the way they’re able to on the ecommerce side to more accurately forecast demand and revenue. 

On the experience analytics side of things, companies will be able to score a customer’s visit to a store. Similar to the digital experience score, retailers could develop a retail experience score that sheds light on a consumer’s likelihood of conversion. At a macro level, visits could either be rated as green, yellow, or red. And brands could dig into red and yellow trips to uncover the reasons for that rating. 

Let’s say out-of-stock items or navigation issues are driving dissatisfaction. Brands could use these learnings to modify their replenishment models or in-store wayfinding signage. Just as websites offer alternatives when customers can’t find what they’re looking for, retail apps could be leveraged to give customers alternatives, highlighting where the item is available online or at nearby locations or showcasing similar substitute items available in store. 

Live Retail: The New Way of Doing Business

We’re at the early stages of this new era of live retail. Some of the companies we work with are beginning to use their in-store mode data and employee app data to measure, analyze, and influence the customer experience in real time, and it’s only a matter of time before this becomes standard practice and the way business is done. And not just for retailers: all brands with a digital app and physical presence (think hotels, airlines, cruises, and more) have the opportunity to harness their location-based digital experience insights to orchestrate journeys, optimize the in-person experience, and achieve stronger business outcomes. 

Looking to embrace the power of live retail for your in-person shopping experiences? Our customer experience experts can help — let’s get started.