tutch CEO on How In-Store Digital Will Increase Profitability

If you’ve been in a store recently, it’s not hard to tell that the way retailers are doing business is changing drastically.  

This is because retailers are scrambling to address more issues today than ever before. For starters, it’s getting tougher to retain workers, causing more staff turnover. The cost of real estate continues to skyrocket, resulting in either higher costs to display inventory or forced limitations on the amount of products that can be on the floor at any given time. There is also more and more focus on online shopping options, as customers feel less inspired to come in-store. 

Technology is helping to combat these problems, and tutch, an Australia-based retail technology company, is leading that charge. The company’s digital platform is displayed on interactive screens and devices throughout physical stores, empowering in-store shoppers to access every product in a retailer’s ecosystem. For customers who are accustomed to shopping on screens, the experience is easy to use and familiar. For retailers, the technology gets to the core of what makes them profitable: higher sales, streamlined costs, and increased efficiency.

After achieving widespread success in Australia, the company recently announced that it’s taking its approach to the United States market.

I sat down with tutch’s CEO, Greg Jones, to learn more about the state of the retail industry and discuss how technology can breathe new life into traditional retail stores seeking to meet their future potential. 

Before we talk about how to solve retailers’ issues, can you give a bird’s eye view of what’s happening in physical stores and why they’re struggling to keep up?

Many people would attribute the difficulties that stores are facing solely to the widespread adoption of e-commerce, but physical retail is undergoing a perfect storm of several market and consumer dynamics. Large format stores, in particular, are not only competing with online marketplaces like Amazon, but also with the brands they carry. And they’re all trying to sell to the same customers.

Unlike their online counterparts, physical retailers have limited space to show all of the inventory they carry. This results in both direct costs and opportunity costs, such as the price of losing a customer when they can’t find what they want or missing out on a chance to sell them more because they can’t see everything that’s available to them.

Many stores also haven’t updated their in-store experiences in decades, while the brands they sell often launch their own stores where customers can not only see their products but experience them in context (think: yoga classes at lululemon or cooking classes at a home goods store). These options, paired with highly convenient online shopping options, leave little incentive for customers to go into stores that might not even have what they need in stock.

What are the advantages of using a digital platform in-store compared to staying at home and shopping digitally? 

This is a good question because it draws attention to a limiting belief–that digital platforms are strictly for use outside of stores, or as an alternative to stores. We see digital as a way to  improve customers’ experiences when they’re already in stores. If we can do that, we not only increase their chances of making a purchase–but the likelihood that they’ll buy even more.

Online, digital is the entire experience. In-store, a digital platform can enhance an already-rich buying journey by giving customers control when store associates aren’t around–using a medium they’re already very comfortable with.

But it’s important not to pit in-store and digital sales channels against each other. We see stores as a bridge to the next digital opportunity, and digital as a way to drive in-store foot traffic. Stores offer physical points of engagement while digital is a way for retailers to stay connected and sell more in between visits.

Customers are around screens all day. Why do you think retailers are having success with them in stores when in-person engagement is theoretically one of the benefits of going into stores to shop?

The short answer is that customers are on screens all day because they like them–and they even like them when they’re in stores. They’ve been trained to rely on screens to access the information they need at their speed and on their terms. They want to know their options, and they’re open to seeing relevant recommendations and unexpected products in the process. 

The longer answer is that there are two macro trends resulting in demand for digital-enable experiences in stores. 

First, about 87% of all retail sales still take place in stores. This tells us simply that shoppers like to shop in stores.

At the same time, we’re seeing that the demand for self-service retail options–enabled by digital screens–is growing exponentially. I saw somewhere that the self-service market will hit something like $80 billion by 2030. This tells us that shoppers want to shop in-store, but they want to have more control over their experience when they do.

Beyond these trends, digital is allowing customers to do things they’ve never been able to do while in stores. For instance, due to spacing limitations, customers have never been able to see all of a retailer’s inventory all at once–and sometimes, staff isn’t available to let them know what else is available. Add digital screens and these types of common problem scenarios begin to change. 

Take a shopper who sees a shirt she likes. She gets to feel the material and see all the colors in real life. But if she can’t find her size, she has to flag down a store associate to check the stock room. Instead, she can now use digital screens to access available inventory herself.

What are stock issues that uniquely affect brick-and-mortar retailers, and how can technology address them?

Brick-and mortar stores have the challenge of acquiring inventory, trying to fit it all on the floor, and then managing the costs of warehousing overflow stock when this inevitably proves to be impossible. They also continue to have a lack of insight into why customers make the decisions they do across their store locations, which makes it incredibly difficult to forecast their stock needs. Meanwhile, it’s become increasingly common for e-commerce retailers and marketplaces to sell third-party products they don’t even have to buy outright or store.

tutch addresses common stock challenges by providing an outlet for retailers to make every product in every store and warehouse visible without having to increase floor space. It also opens net-new opportunities, such as enabling drop-ship and marketplace models that have historically only been available to online retailers. Through the platform, they can showcase complementary third-party products, services, and even subscriptions. 

In these ways, stores are able to sell more of their own stock and create entirely new revenue opportunities. 

How can extending self-service options throughout the store influence retailers’ overall profitability?  

The way we see it, every customer that walks through a retailer’s doors could be spending more. And this is critical considering how much retailers spend to get customers into their stores and to operate them. 

We talked before about ways retailers can sell more stock and create new revenue opportunities through third-party stock. Beyond that, retailers need to think about ways to increase average order values, leverage their proximity to customers to give new spending opportunities to brands, and optimize their spend wherever they can.

Self-service options–and in particular, tutch–can help achieve all of this. The moment that customers begin their experience on a screen is the same moment that our software begins gearing up to make personalized recommendations designed to help them find more items to buy. Its intelligent and customizable interface can display unique messages and journeys based on the customer’s location within a store and the products around them. 

Branded digital space also lets retailers capitalize on brands’ desire to get closer to shoppers at the point of purchase or decision-making. Profitability is equal parts selling more and optimizing spend. Simply adding familiar self-service options throughout store aisles helps retailers do both of these things.

Retailers are more short-staffed than ever, how do you think technology could play a role in alleviating that issue? 

Modern-day retailers are struggling to keep their stores 100% staffed, leaving a lot of stores without knowledgeable and experienced staff to answer customer questions. Technology like tutch’s can fill these gaps by acting as a “digital associate” and colleague that’s well-versed on every product a retailer carries. Even when experts are on the store floor, they may be spread thin or unable to address in-depth product questions that make or break buying decisions.

Technology can help to bridge both the product knowledge and staff availability gaps. With tutch, customers are empowered to take matters into their own hands or staff can use it as an assisted selling tool when interacting with and guiding customers to the best purchase. This keeps customers satisfied and helps free up employees from having to run from customer to customer their entire shift. 

Our technology doesn’t replace employees; rather, it augments their capabilities by providing an alternative route for customers who want it. What we do is open the door to people who otherwise feel limited in physical store settings without closing the door on those who prefer to continue shopping the way they do already and make sure retailers don’t miss a sale. 

From a customer standpoint, tutch’s platform is a familiar and intuitive experience. Other tech companies are focusing on completely novel experiences that will make stores stand apart from online shopping. Why do you think your approach works?

We’ve seen many emerging in-store technologies focused on futuristic offerings, such as holographic staffing or speaking signage, but shoppers aren’t looking for gimmicks. The in-store experience already stands apart from online shopping.

We’re focused on giving them a familiar digital experience that brings the same convenience, guidance, and recommendations they’ve become accustomed to online. This creates a meaningful exchange between retailers and their customers in a way they appreciate.

In order for physical stores to succeed, they need to evolve to appeal to a broader group of users. It’s a challenge, yet we’re seeing a greater appetite to digitize the in-store experience–in a way that preserves its original essence.