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Inside Smart Commerce: The Future of Brick-and-Mortar is ‘Store as Media’

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When we ponder the future of retail, the store is always involved in discussions. In fact, experts and practitioners across the retail spectrum largely agree that the store is a crucial vehicle for customer retention, engagement and loyalty.  
 
Even once-digital only brands like Warby Parker have doubled down on their store investments. In fact, the eyewear darling plans to open another three dozen locations by end of this year. What will change, though, are the experiences that many consumers will expect, and the role that technology and data will play to support fluid, tech-agnostic experiences in the store and beyond.  

WestRock, a provider of retail packaging and merchandising solutions, is working with a fleet of partners, including DigimarcIntel and VSBLTY, to craft an ecosystem to support this new vision for the store. The premise and experience is called “SmartCommerce” — and it’s powered by connected devices and packaging that activate digital media and advertising moments across the entire product lifecycle — from the warehouse to a customer’s shopping cart.  

The end-to-end vision, which features solutions for supply chain, fulfillment, e-commerce and in-store shopper experience, shows how interconnected the modern shopper journey can be when orchestrated effectively. Powerful integration creates synchrony, which ultimately addresses the needs of “smart,” or digitally connected, consumers, according to Leon Nicholas, VP of Retail Insights & Solutions at WestRock.  
 
“SmartCommerce shows how we can make the store smarter for the smart shopper, creating an integrated experience that she’s become hyper used to,” Nicholas said in an interview with Retail TouchPoints. “We’re flipping the model on its head and making the store similar to the online experience, creating more opportunities for customization and personalization, and in effect digitizing store merchandise so you drive the purchase funnel. This can go from smart display, to smart shelves and then down to smart packaging.” 

Smarter products and true digital transformation are achieved by “creating unique identities for all physical and digital objects throughout the supply chain,” said Phil Stafford, Senior Channel Partner Sales, Global Manager at Digimarc. “This enables greater insight and accuracy at every stage of the product lifecycle.” 
 
Because consumers are becoming more demanding of their in-store shopping experiences, brands and retailers need to determine how to service those needs in a cost-effective manner, explained Julie Vargas, VP of Commercial Food & Logistics at Avery Dennison in an interview with Retail TouchPoints. “Retailers and supply chains are using integrated technologies from birth to rebirth of products in order to drive labor automation, inventory optimization and agility to evolve as consumers evolve.” 

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However, the other opportunity, according to WestRock and its partners, is developing a “Store as Media” model, which creates new opportunities to tap into those moments of engagement and create monetization opportunities. “Today, retailers make money through gross margins on products, but also through selling ads in a circular,” Nicholas explained. “Retailers have an opportunity to monetize an interaction on, say, a digital screen, when consumers go from ‘passive’ to ‘active.’”  
 
The ultimate goal for this “Store as Media” model is to translate the depth of data and insight gleaned from ecommerce sites and digital interactions to the store environment. This will allow both retailers and brand partners to capitalize on the power of the store experience but gain more clarity around how assortments, displays, endcaps and even product packaging influence the decision-making process.  
 
“The store is evolving from just a place to transact to a place where experiences happen,” noted Maroun Ishac, Director of Business Development, Retail Solutions Division at Intel in an interview with Retail TouchPoints. “If brands want to truly influence and engage the consumer with all their senses, there is no other media or channel that can do that other than the physical store. You can deliver remarkable experiences to win the hearts and minds of the consumer, and simultaneously defend each engagement with the consumer when they engage with that media.”  

Transforming the Advertising Mix 

Conceptually, “Store as Media” has the potential to disrupt the marketing and advertising landscape. Rather than primarily investing in print ads or even TV ads that have baseline data around reach and influence, brands can partner with retailers that embrace “Store as Media” to fully understand the value and impact of in-store partnerships and activations. For example, a brand would pay for the total number of “touches” or engagements in a store, including if someone picks up a package, places it in their cart, engages with media displays, and other behaviors.  
 
The immediate value of this data is to enable more intelligent store design and experience decisions, helping brands and retailers alike close the knowledge gap of how people behave within the store, according to John Kavulich, VP of Sales, Acuity Brands. “Truly knowing what guests are doing when inside the store can drive smart vendor and store design decisions. Further, critical vendor displays and product interactions can be captured using digital technologies to provide new and valuable feedback to drive the top and bottom line.” 

Over time, brands who invest in this form of advertising will be able to understand the impact of their investments. Conversely, retailers offering “Store as Media” will be able to develop data models, even predictive models, that help them improve operational efficiencies and create an advertising cadence that aligns with velocity per skew. This can ultimately lead to more revenue opportunities for both the retailer and the brand, according to Jay Hutton, President and CEO of VSBLTY.  

Hutton added that this model dovetails “nicely” into heightened conversations about privacy, sparked by the eventual elimination of third-party cookies on Google Chrome and Apple’s stricter privacy guidelines for tracking, advertising and even email marketing.  
 
“The removal of all these instruments is freaking out our industry,” Hutton said. “If we can provide value to the consumer through some sort of monetary instrument, then they’ll opt in, relinquish some form of consent to get that thing return. We have to be smart as advertisers because it can get too promotional and hyperbolic quickly. But if we provide real value and it’s a fair and equitable trade of information for value, that’s going to be a significant momentum changer.”  

The SmartCommerce experience will be on full display with the SmartCommerce activation at retailX, which will be held Aug. 24-25 at McCormick Place, Chicago, Illinois. The 4,000-square-foot activation was developed by WestRock and its partners to showcase how their “Store as Media” alliance comes to life and spans across retail categories and channels. The experience will be curated with tech scenarios that encompass the four pillars of the retailX exhibit floor and conference agenda: “The New In-Store,” “Marketplaces & Platforms” “Smart Supply Chain” and “Marketing & Consumer Connection.” 

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