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Retail Storytelling: The Digital Edition

interactive retail, in-store shopping, brick and mortar

You’re standing in the health and beauty aisle, a potential product in your hand—and dozens more almost, but not quite, exactly like it on the shelves before you. How do you answer the question: “Is this the right one for me?” What if the product told you? What if you knew you were really getting all the options in the showroom of your local store?

Trevor Sumner, CEO of Perch, a leader in interactive retail displays, believes that the in-store shopping experience of the future could look something like this. We discuss the balancing act between in-store and e-commerce shopping; how retailers can personalize the shopping experience; and the future of brick-and-mortar retail.

How have the changes of the past few years affected your business?

COVID has been a technology accelerant in so many different ways. We had focused a lot of our technology on grocery and mass retail, so those investments really paid off because they were effectively essential businesses. And those customers were investing even more in the in-store experience—COVID meant that people needed more insight into what was happening in-store in real time.

For example, they needed ways to connect to their shoppers without a sales associate, because there are a lot fewer sales associates now. And we’re seeing a lot of our customers thinking about how to use our technology to unify commerce and convert in-store shoppers into omnichannel shoppers.

There’s been a shift in balance toward e-commerce during the pandemic. Where do you see that trajectory going now?

I think there’s this narrative that brick and mortar is dead, which is absolute lunacy. Brick and mortar has been increasing 1.5% to 2% year over year. Last year we had a deadly pandemic, which meant that people were literally risking their lives to go into stores. And yet it was a flat year for physical retail. Last year was a boon to e-commerce, but I think this year it will be harder to maintain and extend those gains. Amazon lost e-commerce share, even though they grew.

“I see the future of in-store experience about bringing the same #digital tools into the store, to combine the best of physical and digital #shopping.” —@TrevorSumner, CEO of @Perchexperience via @insightdottech

They didn’t grow as fast as the brick-and-mortar stores that had an e-commerce presence. And part of that is because the physical stores themselves delivered about 40% of e-commerce orders for the first time. There are certain industries where the store has to be a key part of customer acquisition, ordering, and fulfillment. And so it becomes less and less helpful to think about e-commerce as separate from brick and mortar.

What do you see as the role of the physical store going forward?

We crave shopping to connect with products; this connection between people and products is fundamental to shopping. I think increasingly we’re seeing people think about the store—the back of the house—for fulfillment. But the front of house isn’t going away; it’s just going to be optimized in all these new and exciting ways, in part powered by IoT.

Having a local Walmart everywhere so that they can more optimally ship to you is really incredibly interesting on a business level—for margins and for costs and optimizing profits. But it’s definitely not about optimizing the shopping experience.

What can stores do to really enhance connectivity with their products?

The way you connect with products or learn about products online is you click on them. And when you click on them, you go to what’s called a product detail page—or PDP in the industry. And you get videos, ratings, and reviews—and all this stuff that you’re looking at for research. We keep telling ourselves that the reason that we go into stores is because it’s better for product discovery, but, ironically, it’s also the only place where you don’t get that PDP, or product-level, detailed information.

So I see the future of in-store experience about bringing the same digital tools into the store, to combine the best of physical and digital shopping. So I can touch the product—I can get the joy of holding it in my hands. I can look at multiple different products at once in a physical and real way.

If you look at the brands that you really feel that emotional connection to, fundamentally that’s because of the stories that are being told. In a recent study, you are 50% more likely to have an emotional connection with a brand in-store than online, if you just do e-commerce.

Fundamentally, what we’re doing at Perch is we use computer vision to detect which products you pick up at the shelf. And the moment you pick it up, it wakes up and starts telling you about the product. It could be videos, ratings reviews, other complementary products—maybe comparing products in a product family—providing all the tools you need to understand whether you really want that product and that product’s right for you. And so, to me, that product pickup is the same as clicking online.

Now those clicks at the shelf that you do when you pick up a product and look at it—that’s an expression of interest. And now we can provide the right message at the right time, and help brands connect on a meaningful basis with the shoppers that are considering it.

How does this concept apply to something like a refrigerator?

I think of what we do as product-level marketing. Say you just bought a house, and you go to Home Depot to buy a fridge, and there are over 300 different fridges. They can’t fit 300 fridges on the showroom floor, so how do you pick a fridge? But if you go online, you can actually visualize the different configurations of the fridge. Are you doing a double door? What type of shelving configuration can you have? Is this one efficient? Does it have different finishes that can match your kitchen? There are so many different questions that you can answer online that would be very hard to do with physical retail on its own.

But think about that for every product set. We’re working with Johnson & Johnson to bring out their Skin360 tool. It’s a front-facing camera that looks at your face and says, “Okay, based on your skin type, based upon your wrinkles or your sun spots or dry spots. . .” It does an analysis of many different points of your face and asks you a couple questions about what you care about most, and says, “Here are the products that we would recommend.”

Whether it’s finding the right refrigerator, the right electronics, the right computers, the right TV, the right deodorant—all of these things require some digital content. And we’re trying to bring that to the shelf, where 85% of transactions actually occur.

And so one of the things that’s really remarkable about what we’re seeing right now is that about 1% of digital media spent is happening in-store—where those 85% of transactions occur. So, there’s a multibillion-dollar shift to driving digital in-store, and it’s going to be done in a couple of different, interesting ways.

I think there are going to be digital signage networks that are on the walls, that are basically banner ads. There’s going to be digital at the shelf that’s contextual, reacting to what products you touch. Or it’ll do front-facing cameras that do demographic segmentation. So me as a 45-year-old male will get a different message than a Gen Z woman.

It’ll be exciting, it’ll be personalized, it will be contextual. That’s the other area that’s really driving this expansion—is to start understanding how shoppers shop in-store. And now that we’re shining a light on that with sensors and IoT data, it turns out some of the things that we’ve always thought to be true aren’t really true. And it’s going to lead to a revolution in the way we think about the in-store experience.

What’s an example of an assumption that people have been using for years that’s being debunked now?

If you ask anybody in retail what is the most valuable area to place a product on an endcap—that is, the short end of an aisle—they will say, “Eye level.” In fact, they might say, “Eye level is buy level.”

And so I asked them, “Is it true?” All of a sudden they’re like, “I don’t know. That’s what I’ve always been told.” And the answer is, while it is true that being at eye level is beneficial—it shows about a 25% engagement and sales lift to be at eye level versus at middle or lower level—it turns out that the edges of the endcap are more valuable. They show about 35% to 50% sales and engagement lift. And nobody knew that, in part because earlier studies just looked at the main aisle itself.

And with front-facing cameras we can start testing these things, and actually provide you a report that says, “Here’s the content that influences women and men by age, demographic, etc.” And it’s all anonymous; it doesn’t record your identity. So it can do this in a way that doesn’t sacrifice privacy, but helps the brands get all this data to this black box where most of their sales occur.

So stores continue to be the center of where it’s at; but we’ve got to merge some of these new behaviors, new desires, new demands for information. There’s a lot of social shopping that happens in-store, where people text their friends or take pictures of products. How do we enable social shopping as fundamental to the physical shopping experience? There are fascinating ways that you can do this using digital and screens and mobile, and integrating them all together.

What do you see as the path forward in bringing all of this rich data together?

I think it’s the reliance on the mobile phone. Once you send people onto their mobile phones, you are sending them out of the shopping experience that you own, and onto the World Wide Web—this is why all the major retailers are launching loyalty programs. I think the question is really more about how the data gets put together in a way that can make these experiences more cohesive.

How do we determine context so that we give you relevant things? The shoppers are saying: “Tell me about the thing that I’m interested in.” We think that the most important signals—the products are you interested in right now—are the ones that you’re touching. To me, there’s a balance between not taking people out of the physical shopping experience and just throwing them onto the mobile phone. It has to be blended together.

How does the messaging work?

All the real content that you need to help sell a product is already there. Ratings and reviews—already there. Product-comparison sheets, already there. If you just provide the basic levels of information that we can find online, the in-store experience gets enhanced fivefold. The question is, how do we bring it in-store?

A lot of people just try and put their website in-store, and it’s just super frustrating to a shopper because, if I wanted to go to your website, I would have gone to your website. The shopping behaviors and interaction modes are much different. You’re not going to click six, seven levels deep into a website in-store; the most important information has to be bubbled up immediately.

In the short term, this is going to be driven a lot by brands; but long term, it’s going to be driven by retailers. If you look at it, many of the major retailers are investing very deeply in these types of digital networks.

So, right now, I’m an arms dealer to individual brands and some retailers—I’m helping all brands to deliver their digital messages and connect with their customers. Long term, I think retailers are going to be the arms dealers, and provide this platform for interaction, meaningful engagement, and data to each of the brands.

We’re collecting all this data that is going to be extraordinarily valuable. I think that’s why, in part, I’m so excited about stores. Stores now are the dominant form and channel—what are they going to be when we make them more profitable, more efficient, more engaging, more educational, more integrated into personalization? All those things—how much better are stores going to be? When you paint that picture, I couldn’t be more bullish on the bright future of brick-and-mortar retail.

Related Content

To learn more about the future of retail, listen to our podcast In-Store Shopping Matters More Than You Think.

About the Author

Kenton Williston is the Editor-in-Chief of insight.tech and served as the editor of its predecessor publication, the Embedded Innovator magazine. Kenton received his B.S. in Electrical Engineering in 2000 and has been writing about embedded computing and IoT ever since.

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