Broadly speaking, the physical store experience is dying, said Ashok Narasimhan, CEO of Omnyway. Not so much in terms of sales, he clarified, as the numbers still peg in-store sales volume at around 90 percent of the total.
Rather, the change is something more fundamental.
“When we go out to the big physical store guys,” Narasimhan said, “the guys who have a mix of eCommerce and physical retail, and we ask them in one word what their biggest problem is, they say ‘Amazon.’”
More specifically, it’s the change in consumer expectations as to what a shopping experience should be as the result of Amazon’s eCommerce model. Aside from the increased flexibility of pricing and lack of physical inventory restrictions afforded by a digital presence, consumers have keyed into Amazon’s penchant for personalization and seamless checkout.
“Fundamentally it’s just a few key elements,” Narasimhan said, “that make the experience fundamentally different from walking into a store. The experience is broken from the moment you walk in.”
Enter a big retail store, and no one knows who you are. Sales associates aren’t aware of your interests, personal needs and what you plan to look for. The prices of items are fixed, barring coupons and promotions; and if the store doesn’t have your size, preferred color or style, tough luck.
This brick-and-mortar experience, compared to the ease of eCommerce, leads to in-store shoppers treating physical locations like showrooms, whether or not that’s part of the retailer’s strategy.
“They’ll scan items with the Amazon app,” Narasimhan said. “If the price tag says 52 but Amazon has it for 45, they'll order it on Amazon and walk out. Amazon changes its prices on average four to five times a day on most of their products. In physical retail, forget about it.”
Combating this is, of course, not as simple as closing down shop and shifting operations to an eCommerce model — especially for large brands with major real estate holdings and long-term leases.
The key for brick-and-mortar retailers has become in-store digitization, a movement we’ve covered more than once. But Narasimhan’s conception of it — as ‘augmented commerce’ — puts a new spin on what technology can actually do for physical stores.
“It addresses how to do commerce in the physical world while still getting the complete benefit of the virtual world — that’s true digitization,” he said. “What you have to do in the physical world, where a bulk of the money is spent, is to bring the virtual world in-store and overlay it.”
Omnyway achieves this through the consumer’s mobile device, a retailer’s app and its cloud-based contextual digital commerce platform.
In effect, Omnyway takes the buying journey in complex retail environments and virtualizes it. In the physical store, the consumer’s interaction with the merchandise, coupons and promotions, loyalty payment are handled in the retailer’s mobile app.
As a means to compete with the seamless experience online shopping provides, the retailer’s mobile app running Omnyway’s platform automatically wakes up when the customer enters the store.
“Using geolocation, we know you’re walking into this particular store in this particular city. You walk in, the app activates, greets you and provides you with specials,” Narasimhan said.
The app leveraging Omnyway connects via the cloud to bring up the individual consumer information the retailer has, enabling it to tailor to the individual. The app also has information on the store’s SKUs and functions as an extended aisle solution. If a customer can't find the right size or style of item, they can order it on the app.
“We blur and blend the lines between physical and digital commerce,” Narasimhan said. “If a consumer buys two things physically in the store and orders one on the app, when they check out, they pay for all three and the third is shipped to their home.”
The solution allows in-store retailers to offer ‘frequently bought together’ suggestions and bundle deals a la Amazon and can provide on-the-spot discounts on items for customers based on the store's loyalty programs and promotional offers.
This is capped off by a mobile pay feature that applies rewards and loyalty in a single scan at the store’s point of sale. Narasimhan noted that Omnyway is working with some of its clients to enable self-checkout capabilities to reduce friction at the line.
“It starts to make physical shopping come closer to the online experience,” Narasimhan said, “while still retaining the advantages of the shopper being in the physical world where they can touch, feel, see and try on.”
Last fall, Omnyway deployed its solution on Kohl's mobile app across 1,200 of its stores nationally. As of today, the company is in talks with half a dozen other major retailers. Narasimhan said some of them will be deploying the solution this year.
As for what’s next for Omnyway, Narasimhan said the company is working to further blur the lines between the physical and digital.
“We can make any advertisement a point of commerce,” he said, “a display ad, email, social media ad, a poster, a catalog, whatever. All you do is see the ad, scan it and you buy it. It completely removes friction.”
It’s essentially a one-click purchase solution for the real world. Omnyway launched the product, called ZapBuy, in March.