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[column] How 4 types of innovative technologies contribute to store visits

More than a third of the Dutch indicate that they intend to visit physical stores less often, according to recent research by ABN AMRO. Consumers have become increasingly used to shopping online, especially during the corona crisis, and this therefore seems to have a negative influence on the intention to go to physical stores.[i] This raises the question of what retailers can do to attract more visitors to their store. In this blog article, Tibert Verhagen, Jesse Weltevreden and Anne Moes of the AUAS compare the possibilities of a mobile savings program, an interactive screen in the shop window, location-specific messages, and augmented reality in the shop window.

For three years, the Hogeschool van Amsterdam (HvA), together with Amsterdam retailers, conducted research into the influence of four types of innovative technology on store visits. The studies have provided much new practical knowledge on how retailers can use the above technologies. However, the knowledge acquired has mainly been validated for specific stores in the city of Amsterdam. In order to gain more insight into the influence of the four technologies on store visits in general, a nationally representative survey was conducted among more than 2,000 consumers at the end of the project.

The research
Each respondent was first asked, via an online survey, to name an existing store where he / she sometimes shops. A situation was then outlined for the store mentioned in which the consumer was asked to imagine using one of the following technological applications:
a) a mobile savings program (app),
b) an interactive screen in the shop window with which products can be viewed, c) an app to receive location-specific messages as soon as one comes close to the store (promotions, offers), or d) an augmented reality app with which in the shop window can see how the store’s products are made. Which of the four applications was central in the situation sketch was determined arbitrarily. When describing the application, sufficient information about the technology was provided so that consumers could form a good picture of it.

After the consumers had thoroughly absorbed the situation outlined, they filled in a questionnaire. This included questions about the following impressions of the technology: innovation, curiosity, usefulness, ease of use, fun, and privacy concerns. The following behavioral variables were also measured with the questionnaire: attitude to visit the store, the intention to visit the store and the frequency that people actually visit the store. With the exception of the shop visit frequency (single item), all measurements were performed with validated multi-item measuring scales. In line with previous studies [ii] [iii] Subsequently, per technology, the effect of the impressions of the technology on the attitude and intention to visit the store was investigated. Subsequently, it was investigated how this affects the shopping frequency. The figure below shows the research model schematically.

Figure 1: The influence of technology on store visits

All four technologies contribute to store traffic
To calculate the results of the research model, we used the data obtained via the questionnaire with statistical software [iv] analyzed. The results show that impressions from all four technologies significantly influence attitude and intention to visit the store. This influence is greatest for location-specific messages, followed by the mobile savings program, the interactive screen, and the augmented reality application. An additional analysis that we conducted shows that the effect found is really important for practice. This shows that the intention to visit the store for all four technologies has a significant effect on the frequency in which people indicate that they visit the store (beta values ​​between 0.28 and 0.42). From this we can conclude that the impressions consumers have of the technologies through the attitude and intention to visit the store have an impact on the store visit frequency.

Each technology continues in its own way
When we look at which impressions of the technologies have a (significant) effect on the shopping frequency, it appears that there are clear differences between the four technologies. These differences can be translated into four points of interest that can help retailers to increase their store traffic with technology.

Point of attention 1: A mobile savings program must above all be user-friendly

For the mobile savings program, only the ease of use was found to have a significant effect on the attitude (beta = 0.23) and intention (beta = 0.21) to visit the store. Apparently it is very important for users of these types of programs that saving, viewing the savings balance and redeeming loyalty points is easy. An app-based program seems like the right platform for this, but it requires that the user-friendliness (navigation, speed, etc.) of the app is in order. Interestingly enough, and contrary to our previous research [v], pleasure in using the mobile savings program did not appear to have a positive effect on attitude, intention and shopping frequency. This may be because this time we conducted a survey with a panel, whereby it was not possible to zoom in at store level for exactly what people would save. It is often the kind of rewards that people save for that are fun.[vi]

Point of attention 2: An interactive screen is innovative, but pay attention to its usefulness and privacy

The innovativeness of an interactive screen in the shop window contributes positively to the attitude of consumers to visit the store (beta = 0.17). At the same time, we see that the usefulness of the screen has a noticeable negative influence on the visitor’s intention (beta = – 0.21). This is probably due to the fact that thanks to the interactive screen consumers can get an impression of the range of the store without having to enter the store. This will only be done when the screen use triggers an immediate need that can be satisfied in the store (experienced product, make purchase). From experiences with previous research [vii] however, we know that this is unlikely for most screen users and that, as it turns out, the screen tends to reduce the likelihood of a store visit. In addition to the negative influence of usefulness, there also appears to be a negative influence of privacy concerns when using interactive screens. Privacy concerns have a negative effect on both the attitude (beta = -0.10) and the intention (beta = – 0.12) to visit the store. One explanation for this is that consumers reveal their personal preferences for products by using the screen on the street. Every passer-by of the store can watch, which does not benefit the privacy of shopping. Retailers who use an interactive screen could prevent the mentioned negative effects by showing content that directly entices the user to enter (promotions, specials, surprises, games) and not so much as a substitute for browsing through the range and viewing products that one is personally interested in.

Consideration 3: Send useful location-specific messages

Only the impression one has of the usefulness of location-specific messages contributes significantly to the attitude one has to visit the store (beta = 0.25). Apparently consumers who receive a message in the vicinity of the store only appreciate it when this message is of direct added value to them.[viii] For retailers, this means that they have to think carefully about the content of the message to be sent, so that it fits well with their store and the wishes of their target group. It is also striking that privacy concerns do not have any significant effect on the attitude and intention to visit. Although the use of location data can (rightly) lead to objections, in this case it does not hinder consumer behavior.

Point of attention 4: Make augmented reality in the shop window easy, but not too fun

As with the mobile savings program, the ease of use of the augmented reality app also contributes significantly to the attitude (beta = 0.16) and intention (beta = 0.11) to visit the store. Using the app easily and without problems while standing in front of the shop window apparently gives consumers a favorable mood, which means they enter the store earlier. On the other hand, the pleasure of the augmented reality experience has a strikingly negative effect on visitor intention (beta = – 0.20). Experiencing the manufacturing process of the products in the shop window could then be a very nice experience, apparently distracting consumers from visiting the store rather than prompting them. Retailers could respond to this knowledge by making augmented reality applications in the shop window, in addition to user-friendly, more action-oriented. For example, instead of experiences that are so fun that they distract consumers from entering the store, the focus could be more on experiencing the products to be bought.[ix]

Final word
The research done has shown the potential of four different technologies to stimulate the frequency of store visits. Retailers have also been given a number of points for attention when they want to get started with one of the technologies. However, the retailer has not yet made a choice for a technology. When making a choice, it is wise to take a number of things into account. For example, a cost-benefit estimate, the involvement of the store staff, and the inclusion of the preferences of the customer group to be served increase the chance that a chosen technology really contributes to the sales process. [x] [xi] But there’s more. Since the outbreak of the corona crisis, the shopping streets have become significantly emptier. The question is whether technologies with which passers-by can be seduced (interactive screen and augmented reality in the shop window) are now the best choice, or whether technologies that can be used for existing customers (mobile savings system; app to receive location-specific messages ) will yield more results. All in all, the context of technology use seems to have become much more important. Is the shop window still the right place to use augmented reality or is it much better for retailers to tempt the consumer to visit the store at home via a folder or an online message with augmented? More insights are needed here. At the same time, we note that it is especially important for retailers at this time that they also use their online channels for sales. Retailers would therefore be wise not only to bet on technology for their physical store, but also to seriously consider (continue to) consider their online options.

Tibert Verhagen, Jesse Weltevreden and Anne Moes
Store Innovation Lab – Amsterdam University of Applied Sciences

Thanks
We thank the National Governing Body for Practice-oriented Research SIA (RAAK-mkb) for making the research possible. Picture: Pexels.

Source credit:
[1] Emerce, 2020. Obtained on October 29, 2020 from https://www.emerce.nl/nieuws/vijf-nederlanders-geeft-voorkeur-online-shoppen-consumentenproducten

[2] Taherdoost, H. (2017), A review of technology acceptance and adoption models and theories, Procedia Manufacturing 22, 960-967.

[3] Lai, P.C., The literature review of technology adoption models and theories for the novelty technology, Journal of Information Systems and Technology Management 14 (1), 21-38.

[4] Ringle, C. M., Wende, S., & Becker, J.-M. (2015). SmartPLS Release: 3. SmartPLS GmbH, Boenningstedt, Germany.

[5] Verhagen, T., Van Keimpema, K. & Ritoe, S. (2020), How do you use a mobile savings program for more store visits? Blog article MarketingTribune, 21 February 2020, https://www.marketingtribune.nl/food-en-retail/weblog/2020/02/hoe-zet-je-een-mobiel-spaarprogramma-in-voor-meer-winkelbezoek/index .xml

[6] Verhagen, T., Van Keimpema, K. & Ritoe, S. (2020), A mobile savings program for your store: five lessons learned. Blog article RetailTrends, 7 April 2020, https://retailtrends.nl/item/60067/een-mobiel-spaarprogramma-voor-je-winkel-vijf-geleerde-lessen

[7] Moes, A., Ritoe, S. & Verhagen, T. (2020), Conversion of interactive shop windows examined. Blog article MarketingTribune, 15 May 2020, https://www.marketingtribune.nl/food-en-retail/nieuws/2020/05/onderzoek-interACT-etalageschermen/index.xml

[8] Van Keimpema, K., Verhagen, T. & Ritoe, S. (2020), Geofencing for the store: Four points for attention for the use of location-specific messages, Blog article Retail Insiders, https://www.retailinsiders.nl/updates/bericht / geofencing-for-the-store-four-points-of-interest-for-the-deployment-of-location-specific-messages

[9] Verhagen, T & Moes, A. (2020), Try before you visit and buy: The effects of AR in the shop window, Blog article Twinkle, 1 July 2020, https://twinklemagazine.nl/2020/07/de-effecten- van-ar-in-the-shop-window / index.xml

[10] Weltatisfied, J., Verhagen, T. & Steeman, M. (eds.) (2019), The Added Value of Innovative Technology in Retail, Expert Group Innovative Retail Technology, ShoppingTomorrow, pp. 72.

[11] Verhagen, T & Weltevreden, J. (2020), How Innovative Technology Serves the Retailer: A Store Sales Cycle Model, in: Pantano, e. (Ed.), Retail Futures, Emerald Publishing Limited, 3-14.

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