Disclaimer: I got the phrase New Retail from Alibaba.

Every fortnight, Solomon, an upwardly mobile Investment banker in his late 20s will usually stop by at the grocery store not far from his office to pick groceries before heading home.

His routine is fairly straight forward, walk around the shelves, pick items into his basket or cart —In cases where he is making large purchases— then head to the checkout counter. Occasionally, he finds himself wandering the store aisle in search of the new seasoning that he saw in a television commercial.

With some luck most days, he finds these new items fairly quickly. Other times, he has to rely on the help of the store attendants. Then comes the most dreadful part, checking out. He scans the checkout rows and looks for the shortest queue then join one. Three to five person’s later, the cashier is ready to attend to him. With his items scanned and bagged, he reaches for his debit card, depending on the weather, his payment goes through, not before answering the almighty question almost every Nigerian shopper has to answer when paying via a POS; savings or current? That question irks me. Always!

This, for the most part, is a nearly frictionless experience. There also exists a version where after jumping through all these hoops, his payment gets declined at the point of checkout and he is left with two options: a) leave the checkout counter and go get money from an ATM. b) Abandon the whole shopping and go home. Most often than not, he will always opt for the former. I have had to choose the former a few times.

It’s 2019 and brick and mortar retail is still an arduous task. What if things were different? I guess the right question to ask is “Why can’t things be different?”

The scenario above isn’t peculiar to Solomon alone. We’ve all had to deal with this at one point or another. But what if things were different? Brick and mortar retail have some fundamental flaws, especially when stacked against its online counterpart.

Not only is it time-consuming —commute time to and fro the store— and stressful, its limited catalogue assortment leaves a lot to be desired of the entire shopping experience. According to the Food Marketing Institute, the average number of items carried by a supermarket in 2017 was 30,098 items. On one too many occasion, you as a potential shopper has had settle for an alternative as a substitute for another product that ran out of stock. This is after driving long distances in a stressful city like Lagos.

One of the major issue with brick and mortar retail is that it doesn’t give you the sort of flexibility and freedom that is common with online retail. Aside from the near infinite catalogue, you pretty much control your checkout experience and time. No long queues. SKU assortment isn’t the main focus here, the whole shopping experience is.

30,098, Average number of items carried in a supermarket in 2017 - FMI

What will happen if we try to bring some of those online experience offline? Will we still create that near magical experience? I want to believe so.

A few days ago, in what has been top of mind for me for about a year now, I did a Twitter thread on how a mobile application can help make the whole shopping experience in a brick and mortar store a lot better. It’s hybrid retailing; marries the convenience of online retail and the physical store.

Why?

Retail has existed as far back as the days when man bartered, but it seems the instrument of retail, especially brick and mortar is stuck in the stone age. Shopping should be fun, but shopping in the physical store most times can be frustrating.

With Saturdays being the prime time for most shoppers, people with anxiety disorders like agoraphobia have a hard time shopping on these days. This doesn’t only create a problem for the shopper, it leads to a potential loss of revenue for the stores.

The App

With the proliferation of smartphones, it’s only responsible to build a mobile application for a solution of this nature and in the next few paragraphs, I will try to outline my thoughts on what the app could look like. For the sake of this article, we will call the application Urua (Urua means market in the Efik language) and the store will be SPAR. It might as well be Shoprite.

Urua is an in-store application that allows potential shoppers to check the closest branch of their favourite store, shop for items from this one branch, pay for it and pick the item up at that branch, thereby skipping the queues during checkout.

Discoverability

While you’re in the physical store, you can look up an item location by just searching for it on the app. The item, if in-stock is presented to you with a full description, ratings, reviews and shelf location. In the case where the item isn’t in stock, you’re shown nearby stores that have the item in-stock. This reduces the multiple wondering along the store aisle.

Shopping & Self-Checkout

Just before dropping items you intend to buy into your physical cart, you scan the barcode of the item them from the app, this process allows you to build your virtual cart. If for any reason you change your mind, you pull them off the physical cart and delete them from your virtual cart too. When shopping is done, you hit a checkout button on the app, enter your card details —if this is a first-time shopper— or select a card from the list of saved cards, hit pay and you’re done. A receipt, backed with an OTP encoded as QR code, is generated for you right on the app. This QR code will be used for security clearance just before leaving the store.

A security man waits at the door with a mobile device, before exiting the store, you show him your receipt and he scans it and if everything checks out, you are let out of the store. The downside to this is that people may try to shoplift. One way to combat this, assuming this is technically possible,will be to make the barcode of the product trigger an alarm when a person tries to exit the store.

This advantage here is that cashiers become experience consultant and product advisor, offering product knowledge and human-powered recommendations.

Customers who are not interested in going around the store aisle can shop straight from the comfort of their homes or offices and pick up from the store. If they value further convenience, they can use a delivery company like Metro African Xpress and have their orders delivered right to their doorsteps.

Engagement

Based on your shopping history, the store can now begin to show you a product recommendation, something that isn’t possible today in brick and mortar stores. Product deals also are sent out as push notification. This can be mass push notification or ones targeted to specific customers based on their shopping history. This channel not only becomes a revenue stream via paid product announcement, but it can also be used to push out near dead inventories.

Technologies like this open up opportunities for things like referral programs, upsell and cross-sell, feedback gathering based on the shopping experience.

Data

During the app onboarding, stores can collect information like gender and date of birth in exchange for a discount code. This information can now allow the store to do fine-grained recommendation even when the customer has no shopping history, I mean, it’s only logical to recommend sanitary towels to ladies.

Product stock-up reminders for customers become super easy here. For instance, if a customer bought a box of diapers containing about 100 pieces of diapers, assuming his/her baby uses 3 diapers per day, it makes sense reminding that customer to stock up on diapers every 30 days. Brands and FMCG will find this information useful, as it will allow them to better understand what the last mile looks like here.

New products looking to break into the market can leverage in-app advertisement for customer acquisition. This, in turn, becomes a potential revenue stream for the store.

Loyalty

Most retail stores today have physical loyalty cards. While this is nice, it creates another layer of burden to the customer. They have to remember to bring their loyalty card every time the shop or forfeit the loyalty points. If they don’t remember to give their card to the cashier during checkout, they lose the points too.

Building brand loyalty becomes super simple and thus improve customer retention.

With an app like the one described here, the points are awarded automatically. Less stress and much more convenient. This also removes the hassle of point reconciliation should the customer lose their loyalty card. Overall, they stop issuing physical cards and help the carbon footprint on Mother Earth.

Metrics

Metrics that was rather exclusive to e-commerce becomes widely available. Very quickly, the ability to determine the average order value of individual customers becomes a walk in the park. Other metrics like those listed below becomes possible:

• Net Promoter Score - A survey that measures a customer's satisfaction with a brand or product.
• Shopping cart abandonment rate - Percentage of customer who added items to their cart but didn't make a purchase
• Customer Lifetime Value - Total revenue earned from a customer over the course of their lifetime
• Customer churn Rate - Percentage of customer who don't make repeat purchases
• Early Repeat Rate - Percentage of first time customers who make a second purchase within a short timeframe
• Repeat Customer Rate - Percentage of customer who have made a repeat purchase
• Average Referral Rate - Percentage of purchase made through a referral
• Referral Conversion Rate - Percentage referred individual who made a purchase

Conclusion.

While the solution offered above isn’t foolproof, it has many flaws, just like many things in life, it’s my belief that it will greatly enhance the overall shopping experience of the average user today. The physical retail space can be a lot more utilised and optimised.

If executed well, I can see brick and mortar stores becoming more of warehouses and display space. Stores having better relationships with their customers; imagine getting a surprise hamper from your favourite store just because you were the shopper of the week all thanks to the newfound insights gleaned from the readily available data.

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