Matt Phelan, CEO of 4Ps, part of NetBooster Group
London’s Oxford Street is one of Europe’s favourite shopping areas and for years has been the most desirable location for global fashion and retail brands such as TopShop, Nike, Gap and Zara. However, since the 1990s the number of shops on Oxford Street has fallen by 20% due to retailers opting for much larger flagship style stores created by unit owners merging smaller units. With bricks and mortar stores facing a bigger challenge from ecommerce this extra floor space needs to be more than just clothes and products. Retailers now have the opportunity to create new and exciting customer experiences that will keep people shopping on the high street.
The future is interactive
Unlike ecommerce where customer data is seemingly endless, traditionally retail has struggled to collect meaningful and insightful data from their customers, often relying solely on loyalty cards. However, technologies such as beacon technology and Smart Mirrors are being used to collect customer data whilst they are in the store.
Smart Mirrors use facial recognition technology and machine learning to recognise customers and then link them to their online shopping behaviour. In doing so, for the first-time retailers are able to seamlessly incorporate the online and offline customer journey. This then enables the retailer to use the information to effectively target the shopper in store with promotions and products based on their previous shopping behaviour. This is not only good news for the retailer but it makes the in-store experience for the customer much more personal. The biggest challenge for retailers will be making these new technologies complement the in-store experience that they want to offer
Virtual reality (VR) and augmented reality (AR) are also entering the retail space aiming to bring new and enhanced experiences to shoppers. Retailers can use AR to create immersive digital experiences for consumers via smartphones as they shop in the store, enhancing the experience beyond just looking and trying things on. AR technology could overlay products onto the customer so they can see if a product looks good or in the case of clothing, whether it will fit or suit their wardrobe. Several retailers have already rolled out such consumer-facing applications to allow them to virtually try on clothing, makeup, and accessories. One such example is the Converse shoe sampler, whereby consumers could overlay a projection of the shoe onto their feet, making the ‘trying on’ experience easier and far more impressive. Consumers were then redirected to an online shopping platform via the AR app, ultimately prolonging their engagement with the brand and increasing sales. Other pioneers in merging AR and retail are Jura, whose app lets shoppers try on virtual watches and Sephora, who created a virtual makeup app.
VR on the other hand has had a lower adoption rate as the immersive technology is more costly and cumbersome to integrate into retail stores. However, if used effectively, it can be a powerful tool for leveraging greater in-store sales. As the technology is developed further, more and more brands are successfully incorporating it into their stores. IKEA for example used the technology to allow its customers to design their own kitchen using the HTC Vive headset and Audi used VR in its showrooms to offer consumers a virtual test drive. There is a sense that we are only seeing the tip of the iceberg though; there’s no reason for the virtual experience to imitate the physical world. Instead the possibilities for VR can go far beyond reality.
Joining up the journeys
As with all new technologies, the adoption of VR and AR may be impeded by the consumer’s reluctance to accept something unfamiliar. Previously new technologies have been met with scepticism by consumers who find the increasing levels of targeting intrusive. It is important that they understand that targeting is part and parcel of the nature of retail. Take away targeting from retail and you would lose shop window displays, store layouts and posters. Using this new kind of technology is simply the future of targeting and one that has the potential to create truly unique experiences that will enhance shopping as we know it.
Interestingly, the future of retail is set to look a lot more like the past than the future. Looking back at the first department stores, like Selfridges and Liberty’s, they were known for their ability to understand and recognise a customer as they walked in store and use this knowledge to provide a truly customised experience. However, in the world of online shopping this ability to get to know customers on a face-to-face basis is removed and replaced by faceless data. The challenge for retailers now is to take the vast amounts of personal data and create customisation at scale, whilst at the same time not over stepping the mark. Ultimately, it is about understanding what level of personalisation particular audiences will feel comfortable with and using data and AI to create personalised customer experiences that are valued, not seen as intrusive or unwanted.