06/05/2012 01:50 pm ET Updated Aug 05, 2012

Bridging the Retail Gap: What Old and New Commerce Can Learn from Each Other

As the online retail business has grown, much has been made of whether virtual commerce will eventually overtake real-time shopping. The more important question is: how can these two different worlds -- the virtual and the physical -- merge and create a new retail paradigm, one that will strengthen the customer's experience, and subsequently drive even greater sales?

Where We Are: Colliding Worlds

When e-commerce began, retailers created two separate and distinct experiences: offline and online. While these different revenue streams lived under one brand umbrella they typically confused and frustrated the customer with distinct pricing, unrelated product assortments, conflicting goals, and sometimes completely separate financial models. Today, the consumer is forcing change. Advancements in technology, particularly the use of mobile devices, are allowing the two retail environments to mingle. By utilizing mobile commerce on site, customers are bringing e-commerce into the physical store with them, forcing the online and offline worlds to co-exist.

At their best stores, they stimulate one's senses, stir emotions and inspire imagination; there is still no better way to communicate a brand's story. The digital experience is still searching for means of connecting with the customer in the same way a physical store can. While it offers important conveniences in our over-scheduled lives, online retail is not as effective in driving a customer who is just "window shopping" to make that unplanned purchase.

What's Next: Technology as Bridge

The advancements in technology can provide a number of paths to merge the store and digital experiences, taking some of the best practices in e-commerce and applying them to the brick and mortar world, thereby creating a more seamless online-offline experience.

Queue No More

One of the most appealing aspects of shopping online is the ease of payment. Stores must make their transaction processes equally hassle free. For example, a number of retailers are already allowing the consumer to use their mobile devices on-site: simply scan a tag, pay right from their device, and take their purchase or have it shipped. Apple stores, including the new Grand Central location, have done away with cash-wrap stations as a necessary stop. As such, m(obile)-commerce can become an extension of the checkout process, alleviating the long lines that customers loathe and reducing the amount of necessary staff.

Right Color, Right Size, Right Margins. In the e-commerce world, access to diverse product availability in real-time is a huge advantage to converting a transaction. Brick and mortar stores must find more effective ways to accomplish the same thing. Incorporating technology that supports stock replenishment programs and inventory controls can assist a customer with finding the right size or color of a possible purchase. Through a combination of efficient stock management and direct shipping, stores can require less stock space and fewer staff. Retailers are already looking at inventive ways to use freed-up space in existing stores. In the case of Macy's they are taking space that is no longer used and creating a series of regional on-line fulfillment centers to better compete with Amazon.

Showroom for Interaction

Social media is the new frontier in driving online sales and the e-commerce world is quickly embracing s(ocial)-commerce. It is increasingly important for customers to interface with the brand both in-store and online (sometimes simultaneously). The use of technology in the brick and mortar presence will be critical in allowing for this interaction. While things are changing rapidly, there are some promising preliminary ideas that are forming, such as Perch Interactive's use of a projection "gestural" design (which allows one to virtually scroll through a brand's product offerings on a large video screen while in-store). Additionally, RFID technology and new software programs will allow customers to try on any product virtually, in-store. Swivel has developed a particularly novel form of this technology. With the space created by stock room efficiencies and mobile cash-out functions, the store can focus further on how to merge technology and product display to deliver the ultimate brand expression and become a secure and comfortable place to meet and interact with others -- the literal expression of social commerce

Where to Go: The Future of Retail

Technology continues to rapidly change the retail landscape. We are just beginning to investigate what role voice activated commands (i.e. Siri) and gestural technologies will play in the future of retail. The possibilities are myriad, and retailers exploring a seamless connection between the off/online experiences will be the most successful.

With contributions from Maryssa Miller, Former VP, E-commerce, CreateThe Group.