The Adobe Immersive Retail Experience is a merger of hardware, software and services Adobe has created in collaboration with industry partners. In this interview with Michael Klein, Director Industry Strategy - Retail, Travel & Hospitality at Adobe Systems we discuss in depth what the new retail experience is all about and many insightful points from what Adobe is seeing in the marketplace working with retailers.
5/16/2016, Las Vegas, Shoptalk retail conference
DV: this is Darius from Retail Tech Podcast here at shoptalk speaking with Michael Klein from Adobe. Michael thank you so much for taking the time to meet, can you give me a quick overview of what Adobe is doing with retailers, specifically omni-channel retailers?
MK: Adobe is well entrenched in retail space, we’ve been well entrenched in the desktop and mobile space for quite some time, not only with our creative products but also with our legacy from the Omniture acquisition of data where we’re measuring 7.5 c of every 10 c (75%) going thru the Internet Retailer IR 500.
We recognize though that retail is still taking place in the physical brick and mortar store. Folks like Marc Andreessen said the store would go away and would become a dinosaur and all the data indicates to us that the store is here to stay, and it’s a very important part of the consumer journey. So what we’ve been able to do and what we’re going after with our partners and with our own professional services and agencies internally and externally is to build what we call a Retail Immersive Experience, and that’s giving the ability to bring the best of digital into the digital space, sometimes this is called Figital, bringing physical and digital together and being able to offer a different type of experience to elevate the experience in a store because we do know that store traffic is down, the comps, the comparable store sales for physical stores is also being challenged by ecommerce, as ecommerce is growing at double digit rates.
So there is this balance that multi-channel retailers are trying to find because they still need to have folks go into the store so driving these digital experiences in store is going to become more and more commonplace for the retail industry and we’re helping enable that with our Retail Immersive Store experience program.
DV: this is really like an existential challenge for local retailers, to be able to connect and engage with local shoppers and they have to have really innovative ways of doing this because as you know today’s shopper is mobile and they probably have a million things on their mind and they need to be served when and where they are. So, how does this immersive experience help bring traffic into a retail store?
MK: we have information from one of Canadian partners, FGL sports and Sport check branch (a division of Canadian Tire) which have invested heavily in hundreds of these large touchscreen display screens in their stores. As they mentioned in the Adobe Summit last year the store comps were double digit for those stores with the immersive experience because they were providing what I call Merchantainment because we can go online and we can prove compare but being able to touch, feel and really experience product has to take place in the physical space. Also the experience of shopping is not going to completely go away. Again, we do love the idea of great pricing and price comparison but that gratification, the ability to touch the fabric, to smell the leather is still going to be very important and we need to make sure that’s enhanced and digital is going to be a way to bring that to life.
DV: what is the overall solution that a retailer would use, including what Adobe provides. There is hardware, software and the Adobe Marketing Cloud, can you go into that a little?
MK: sure, the experience that we’re featuring here at shoptalk which is the Retail Immersive Experience begins with an anonymous shopper walking into the store. they are going to encounter first with a hardware device, we do work very closely with the likes of Samsung, so there definitely need to be an investment in the hardware, weather that be the screen for the consumer, the tablet for the store associate, and we work closely with partners and agencies like Razorfish or Sapient Nitro, Accenture, Deloite Digital, that are working very closely with the retailers in convert with our own professional services that then start to build out the platform of data and content and that is coming from the Adobe Marketing Cloud, primarily from our Experience Management solution, our analytic solution, our Adobe Target solution which provides recommendations for upset and cross sell and also our campaign solution for CRM and campaign management solution. So those solution from the cloud and working with partners that are helping enable and install the hardware in the physical location and then putting the parts in place because that what you really need to do. Many of our clients already have the foundation of data and content coming to them from the Marketing cloud coming to them from their Web experience and their mobile experience. Now we’re able to take that and create the pipes and the conduit to bring those experiences into the physical store as well and that’s the mechanism that brings all of the solution together.
DV: so typically the retail would work with the agency to design the overall experience and as a result of that the retailer would utilize the Adobe technologies with any other pieces that they need to bring in together.
MK: right, and they will also leverage our subject matter expertise. we find that the best implementations are when there is hardware, there’s technology and software, the System integrator (SI) and there is Adobe subject matter expertise from our product group to make sure that we’re going in the right direction specially from the point of view of the roadmap.
DV: great, we talked about the pull to the store from using this kind of technology. what about any type of conversion aspects when the customer is in the store. How does the technology help convert more?
MK: first of all there’s typically deeper product information, we know that when consumers walk into the store they’ve typically done some research. they are more armed and more powerful than ever before. The ability to add more information or the more engaging information like video. Last year retail touchpoint put out a study that indicated that consumers that interfaced with digital technology in the store were 20% more likely to convert, while in the store when they engaged with that technology. So it’s an added benefit and and experience and there is also a trust factor because now if i have more information about the product it looks like there was an investment in the product and the experience and that creates authenticity for the consumer and gives them that much more confidence to buy.
DV: so as we’re talking about the retail landscape including the actual store, and a lot of store are in shopping malls. Is there something different from this experience that a shopping mall can actually use?
MK: what we’ve already seen at display in terms of the draw to the store is that many shopping malls, and Westfield is here at the show, they themselves are adding beacons into their space and into their public spaces so depending on the relationship that retailers have with the mall owner there is now the ability thru both NFC and GPS to start to communicate with shoppers in the mall to then direct them to the brands and particular experience that may be in that physical location. We see that quite often in airports as well and we work also very closely with the MGM brand group that own this hotel (Aria) and they’re also experiencing with beacon technology in public spaces to engage with guests and travelers as they go thru the public space knowing that i might have booked my trip earlier, i may be interested in food or i may be going to a show and maybe these will be the other types of activities that given that information would be of interest to me as I’m in that property.
DV: it’s amazing the amount of opportunity available to the stores, mall operators and entertainment groups as well as the shoppers and that’s what excites me for the next 5-10 years.
MK: we also have to be careful about the creepy factor. i was on a panel today about personalization. we have a lot of great data and we can offer great experiences to consumers but we have to deliver value at the same time and we can’t be creepy about it. So that’s the conversation that’s also happening a lot right now that yes consumers are asking for personalization but they want it to be valuable, authentic and they don’t want it to be creepy.
DV: definitely, that’s on the minds of many consumers and shoppers when they’re even trying to authenticate when they’re going to a store and the movies have helped with that with eye tracking and things like that so people are concerned, what kind of access am i giving to my life when i’m using this type of technology. Ok so if you were a retailer how would you actually plan staying on top of what’s going on in technology right now and retail tech specifically?
MK: we see quite a bit of the idea of building the innovation lab or some type of think tank or petrie dish in the SF Bay area, we have brands like Target, Walmart, American Eagle, and all these brands are elsewhere in the united states but they’ve built these small incubators in the Bay area to begin to develop and think about what is innovation, what works for their brand and I think that’s another very important piece that what works for one brand may not work for another so we always need to remember to keep the customer in the center of this and also the idea of efficiency and time savings because consumers are not going to engage with technology for technology’s sake. they’re going to engage with technology if it makes their lives better, if it allowed them to get in and out of that store faster, more enjoyable and the idea of delight and surprise but not just for technology’s sake.
So we see a lot of the incubators and there’s also a fine line between going after the bright and shiny but at the same time we want retailers to start doing something, have that conversation - what is important for the consumer and your brand and try something, because if you don’t try something everybody is going to pass you eventually.
DV: that obviously is more viable for very large retailers, what about retailers that can not afford to setup innovation labs, how should they approach this problem?
MK: we se brands such as Rebecca Minkoff which is the poster child for many of these brands because of what they’ve done in their store with their dressing rooms and their magic mirrors. They are a small outfit, they don’t have hundreds of stores and corporate offices like Target and Walmat so they’re doing it with a small group within their corporate office and weather it the head of ecommerce or the head of stores somebody is owning that and taking responsibility for innovation and bringing this to the store. it is not a requirement to build that lab or innovation but it’s it is important to have that concept within the greater organization so that there’s this group of people weather they’re in a conference room or weather they’re in a different state no matter where they may be they’re responsible for bringing to the table these concepts for the physical store.
DV: and of course that probably even becomes more of an important factor to have relationships with the right agencies that know retail and can put them in touch with, not the shiny objects, but with realistic products that can add value to them. I heard someone on a panel say that ROI is not as important as it used to be but if you’re a retailer ROI is probably on top of your mind so you can’t say that.
MK: so that’s where you see no matter if you’re big or small, if you have 10 stores or 10,000 stores all of these programs need to start in one and no more than 5 stores, test pilot. Somewhere along the line a CEO or CFO will allow some of this to happen, specially if it’s driven by marketing and the idea of the press and eyeballs coming to the business that will only go so far. Eventually if you want to put that technology in every store you will have to definitely drive an ROI. The one piece that I think it’s quite interesting when we think about the enterprise and small-medium businesses is the idea of agility and while the smaller outlet, the smaller chain may not have many resources they typically have more agility. they’re not tied down by large corporate legacy processes and systems that may prevent them from trying some of this stuff. For some of the smaller organizations because they’re smaller and perhaps more agile they can say and they could be private cars and their VP or CEO may say we’re going to try this, we’ll put this out there. maybe we’ll work with a smaller agency and not one of the bigger agencies and we’ll put this in our store in NY and our store in Chicago or in San francisco and we’re going to see how this works.
DV: going back to the ROI comment from the speaker I’d like to qualify that it should be taken in the context of his/her complete discussion but at some point of time all of the technologies need to start contributing to the bottom line for the retailer one way or another, quantified easily or even indirectly. some people have said there is no way to quantify the tech and in those cases I think the vendor needs to help the retailer understand way to try and quantify it, you can’t just throw it out in the air and say let’s see what happens, at least long term.
MK: one of the things you’re going to start seeing specially on the large format touch screens is many of them will have cameras in them and they also will be able to understand things like dwell time, how long is that customer engaging and as you saw thru the demonstration as i begin to engage and touch and maybe put products in my basket i have the ability to capture that information and start to make correlations in my data based on perhaps time of day, frequencies within the store that i can start to connect the engagement in technology to an uplift in sales potentially. this is possible and it does take some time in correlating this set of data with that set of data but it’s there and it will take a bit more time and effort to bring all that together.
the other piece is when we think about customer surveys and customer satisfaction and net promoter stores (NPS) we’ll see more of that coming into play because many brands are using NPS to understand what customer satisfaction is and retailers are seeing that digital technology in their store is raising their net promoter and their CSAT scores.
DV: very interesting, this discussion could probably go on for hours because there is no end but I really want to appreciate and thank you for the time that you gave me and if anyone wants to learn more about what Adobe is doing in retail how do you recommend they find the information?
MK: they can go to https://www.adobe.com/industries/retail.html and that’s where we have our retail industry pages and explaining more of how the marketing cloud and the creative cloud and the document cloud are helping retailers move their business and differentiate themselves in this disruptive business of omni-channel business.
Download pdf of The Future is Today
And a link to a YouTube video on the Adobe Immersive Retail Experience.