Virtual StoresThe Future of Retail

ByBharat Bharadwaj

Contents

Virtual Store Concept

How different is it from Online Shopping and Regular Physical Shopping?

How does this really work?

How does a Retailer benefit from a Virtual Store?

Some of the Retail Giants who have successfully implemented its Virtual Stores

Virtual Stores in India

Are Virtual Stores the future?

3

Virtual Store Concept

Products are displayed on large touch-screens which can be viewed in much the same

way as they are in shops. But the items’ barcodes are scanned via your mobile phone

rather than by a cashier, and added to an online basket which is then delivered to your

home.

A Retail Store A Virtual Store

4

How different is it from Online Shopping and Regular Physical Shopping?

The virtual stores are set up in public spaces, most often in subways and bus stops

with high foot traffic and frequented daily by tech-savvy commuters.

The posters in the virtual stores are designed to resemble the actual aisles and

shelves of a regular store giving user the same look and feel of actual store.

Shoppers benefit from Virtual Stores

No more of pushing your huge carts and waiting in the counters

User can touch, feel and compare products from the same shelves as in Physical stores which is missing in Online shopping

Commuters, travelers can shop during commute and have items delivered to home/Hotels without having to worry about picking stuffs on there way back home

5

How does this really work?

The shopper needs to have a relevant mobile app to scan the QR code on the display, set time and date of delivery and place order.

Download the app, place your mobile camera on the QR code

Scan the QR Code

Select one of the option

6

How does a Retailer benefit from a Virtual Store?

Considerable reduction in Overhead costs such as floor area, the amount of products stacked on the shelves and the heavy inventory maintained for every store

Avoiding High Set up costs for store extensions to enter new markets and untapped regions which includes store design, store setup, inventory costs, carrying costs and real estate costs.

Production costs are low because displays are created electronically. Once the hardware and software are in place, the cost of a test is largely a function of the number of respondents, who generally are given a small incentive to participate

The simulation has a high degree of flexibility. It can be used to test entirely new marketing concepts or to fine-tune existing programs. The simulation also makes it possible to eliminate much of the noise that exists in field experiments.

7

Some of the Retail Giants who have successfully implemented its Virtual Stores

Walmart Canada and Mattel have launched a virtual pop-up toy store in Toronto to make it easy and convenient for shoppers to buy gifts during an often rushed

holiday season.

Tesco launched the first version of the offer in the subway of South Korea’s capital city Seoul, and is now installing the interactive displays at bus shelters in cities around the Asian nation in order to further capture sales from

busy commuters.

Peapod’s virtual store technology features physical or digital billboards of larger-than-life grocery aisles positioned in community recreation centers, on coffee sleeves at local cafes, and on a high-tech Peapod truck

M&S e-boutique in Holland is a “virtual clothes rail” has been installed consisting of two tall, upright digital screens. Shoppers can select from the screen and put their chosen garments on the digital clothes rail and then turn the garments round, look at their shape and even move them along the rail, if they wish.

8

Tesco witnessed a big success in Korea with its launch of Virtual store in bid to become country’s top retailer

Tesco had to expand in Korea but building physical stores was not the solution

Recognized pulse of hard working Koreans who would welcome a concept which can save their time

Virtual Store became instant success with online sales increasing up to 130 % tripling its online sales in just 3 months

Customer base increased by 76 %

The Android app was downloaded by more than a half-million users.

The virtual store concept to be expanded to 20 new locations across the country.

9

Virtual Store using QR technology has made entry into Indian market as well with Yebhi.com and Homeshop 18 setting up virtual stores

HomeShop18 and Delhi International Airport introduced a “Virtual Shopping Wall’ at the Delhi Domestic Terminal T3. The virtual mall is named “Scan N Shop”. The wall offers premium merchandise to consumers

Yebhi.com has launched thirty virtual stores inside cafés across Delhi and Bangalore, using both NFC tags and QR codes.

Smart posters showing the online portal’s merchandise have been placed on the walls ofCaféCoffee Day stores and advertise products from fashion accessories to mobile phones that are available to buy from the company’s website.

Online shoppers have grown to 35 million from 8 million in 2012

Smartphone users have climbed four-fold to over 110 million in the same period.

The target segment would be very niche and hence the retailers have to be very careful while strategizing virtual store concept in India

The success of virtual retail would also hinge on a strong back-end for order fulfilment and a supply chain enabling timely delivery

10

India has a huge market for Virtual shopping with the amount of online shoppers and smart phone users increasing at an alarming rate

With options to visit shops, do online shopping from our homes or order via mCommerce while out and about, do we really have a need for yet another virtual method? This can definitely be another big channel for retailers

Virtual stores have proved to be a effective in its initial days. They could act as a bridge between advertisements and m-commerce, reminding people of groceries that they need and also providing them with the capabilities to quickly purchase them with their smartphones

With smaller shops facing space constraints to hold a limited range of stocks, such shops could benefit from virtual shelves containing all of the additional stock they do not have room for.

The success of virtual retail would also hinge on a strong back-end for order fulfilment and a supply chain enabling timely delivery

The concept is fascinating to consumers, virtual stores could see acceptance largely for top-up or impulse purchases.

Virtual-reality simulations can help managers take tactical actions such as designing retail space that can entertain and persuade customers.

11

Are Virtual Stores the Future?

https://businessamp.wordpress.com/2009/02/22/virtual-storefronts-real-advantages-disadvantages

http://www.brandchannel.com/home/post/The-Future-of-Retail-Reinventinge28094and-Preserving-the-In-Store-Experience.aspx

http://www.mcommerce.io/are-virtual-stores-the-future-17012013/

http://en.wikipedia.org/wiki/Virtual_store_research

http://magazine.good.is/articles/can-virtual-stores-make-shopping-more-sustainable

https://hbr.org/1996/03/virtual-shopping-breakthrough-in-marketing-research

http://kelley.iu.edu/cerr/files/09ismi_virtualretailing.pdf

http://www.thecmosite.com/author.asp?doc_id=235007

http://www.tescra.com/white%20paper/Benefits%20of%20Virtual%20Retailing.PDF

http://www.extremetech.com/mobile/99033-virtual-stores-help-shoppers-save-real-time

http://www.mobilecommercedaily.com/qr-code-enabled-virtual-stores-support-merchants-mobile-shopping-strategies

References