Public Relations & Social Marketing Insight

Transforming bricks-and-mortar shopping is a high-stakes endeavor for retailers given Americans still do over 90% of our shopping in physical stores. In fact, one of the latest trends in retail is the launch of physical stores by online e-commerce companies, including Amazon, Warby Parker, and Birchbox.

Dozens of startups have taken on the challenge of helping retailers bridge the gap between digital and physical commerce through features ranging from shelf-stocking robots, to augmented reality displays, to Wi-Fi based beacons that collect data on shopper behavior.

Using CB Insights data, we identified startups enhancing the in-store experience with digital tools. The startups in our list have racked up partnerships with many big name brands — including Maybelline, Lancome, Kiehl’s, Cabela’s, Foot Locker, Home Depot, Express — and department stores, from Lord & Taylor to Target....

Most retail outlets — whether conventional brick-and-mortar shops, digitally enhanced stores like Macy’s in the U.S. or Burberry in the UK, or online stores — assume a traditional three-stage consumption model. The customer experiences a need, shops to satisfy the need, and then consumes or uses the product purchased (I need shoes, I buy shoes, I wear them).

TThe vocabulary of retailing reflects this model, assuming in particular that shopping is the central component of this model. Marketers will talk about shopping trips, shopping missions, shopping baskets, shopping lists, and destination trips. What’s more, current practice for the most part still rests on the idea that many decisions on which particular product to buy are made in the store — whether physical or online.

Hence, brands engage in an arms race of persuasion and hard-sell tactics (prices, promos, presence) at the point-of-sale order to sway the customer when she is ready to transact.

But winning in retailing today is less and less about control of the shopping experience because there is no longer a clearly defined shopping stage. The model is changing as new technologies allow people to bring the purchase of the product that satisfies their need closer to their first perception of it. And this makes the perception of the need — rather than the shop — the stage that marketers need to control.

This paradigm shift — and it really is that — is apparent in three ways....