Monthly Archives: April 2013

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New Technology: A Challenge And A Solution For Retailers

Development in consumer technology has created new challenges for retailers but also appears to offer potential solutions.

Today’s consumer is aided and abetted by technology. In a digital age where consumers are choosing to shop online rather than in store, retail managers are being forced to make the in-store experience more engaging and attractive. There is a growing demand amongst consumers for the ability to be able to interact with digital technology and have a seamless experience across all available channels (omni-channel retailing), which is resulting in many stores now investing in the trial of innovative touch screen and immersive technology to find ways to fulfil the needs of their consumers.

Ironically though, it was innovative new technology that encouraged consumers to move away from the store and retailers are now looking to employ constantly evolving new technology to bring them back!

More than a decade ago e-commerce abstracted some aspects of shopping from the store into a digital context, offering additional benefits to both the retailer and the consumer. The abstraction, however, left key parts of the shopping experience behind which retailers are now refocussing on – the store’s multi-sensory and naturally social context, shopping as an event and destination, and the promise, though not always met, of personal assistance. To its advantage, e-commerce added easier access to reams of information, created new social realms and commercial spaces with new participants, and made shopping ever easier and more convenient. Retailers have continued to augment and improve their customers’ online experience with better content, search, personalisation, security, lists, reviews, checkout, and the like. Most recently, they’ve been adding barcode and QR code search, Web sites optimised for mobility, and mobile apps.

Mobile technology and the ability to shop online at anytime from anywhere is changing the face of the retail store. Over the past few years, the world has witnessed the unprecedented growth of smartphones, changing the way consumers shop and browse. Reports from eDigitalResearch and IMRG have been tracking the growth of the mobile market in the UK. Smartphone ownership now stands at 60% of the overall UK population, having continued to grow at a solid pace over the past 12 months. With the introduction of new, more innovative devices, as well as emerging technologies, such as 4G, ownership looks set to increase in 2013 and signals just how important a channel mobile is becoming to retailers and brands. The report clearly shows the steady growth in the number of smartphone owners who are using their devices to shop and browse. In the latest results from April 2013, over half (54%) of smartphone owners claim to have used their device to browse for products, whilst just under 40% have gone on to make a purchase.

With more convenient digital ways for a consumer to shop, retailers are struggling to keep the consumer engaged in their stores. Immersion seems to be the key to success, with the implementation of technology in store including reality-augmenting magic mirrors, interactive displays, and shelf-edge video to name a few.

The ideas and the innovations of interactive digital signage, online shopping and mobile browsing are here to stay and are being used every day. Retailers can now vastly improve their customer in store experience by providing technology and solutions which help customers to share the online experience they had at home and to revisit the phone browsing experience they had on a train and, by joining up the dots in the digital map, create an engaging multi-channel experience for customers shopping in their store. Combined with a multi-sensory experience that cannot be achieved on mobile devices and a sense of community, the retail store will remain an essential part of our shopping experience. Retailers are just having to work harder to come up with and invest in innovative ways to remind customers why its still important to visit stores and what the benefits are.

There are a vast array of interactive options available to retail outlets, from self-service touch screen kiosks, interactive screens that enable the consumer to explore and order items from product ranges, to augmented reality engines that can help to engage shoppers in unique ways.

Tesco, for example, are trialing the use of augmented reality in their children’s clothing ranges in store. The technology allows children to stand in front of a screen and choose different garments in various sizes or colours etc. to try on. Without needing to go and find and touch the clothing items, they can get an idea of what they would look like in them. Tesco are also using touch screen kiosks in store that customers can use to look up what stock exists in the warehouse and order / pay for an item that is not currently in store.

John Lewis department stores have a pop-up style shop in Exeter which is about a third of the size of a normal John Lewis store. Due to the reduction in floor space, the retailer has had to become more ingenious in the way they use technology in-store. Instead of displaying multiple plates on offer, the Exeter store has a ‘plate wall’ with one of each dish and a kiosk alongside where consumers can order the number they want and have them delivered home. Julian Burnett, head of IT architecture at John Lewis, in a recent edition of ‘Integrated Retailer’ said “Everything that we do is about creating an interactive, engaging and energising experience for our customers”.

Example of augmented reality use in a retail store

Example of augmented reality use in a retail store (Credit: http://www.consumerinstinct.com)

With substantial upfront investment required, retailers are yet to prove that this new technology is having a positive impact on their bottom line, even though visitors appear to love it. There is hope, however, that increased brand engagement techniques and an improved experiences in store (created by new technology) will encourage consumers to continue to visit and buy their products over a competitors.

Not all digital technology has to be interactive. Large format projection screens can also be used to liven up open spaces in retail complexes and provoke the senses to create a more immersive experience as soon as the consumer walks in. Video advertising and product ranges can projected onto screens across what would otherwise be empty windows/dead space to liven up the environment. Moving graphics will catch the eye of consumers and help to enhance their experience right from the first moment they walk into the centre or store. Digital advertising in store can also be used to drive customers to redeem a discount code on their mobile for example, creating a multi-channel experience under one roof. A combination of immersive and engaging technology ensures the correct brand messages are successfully communicated.

Application of Rear Projection Screens in Shopping Centre

Application of Rear Projection Screens in Shopping Centre

Rear projection screen applied to empty shop frontage

Rear projection screen applied to empty shop frontage

So the physical retail store can still offer an experience to consumers that cannot currently be had through mobile commerce. Virtual reality stores can get close to the real thing, but there is still a way to go before digital technology can claim to completely replace the retail store. Until all of our senses can be successfully stimulated through digital technology – sight, sound, smell and touch, the physical store will still add to a consumers experience. And although numbers of in-store shoppers have been dropping, with the development of new technology and highly visual and interactive experiences, consumers will become privy to the benefits of the in-store experience.

Another consideration for the rise in e-commerce and mobile commerce is the impact on logistics and our environment. Because consumers cannot ‘try before they buy’ when they purchase online, we’ve seen a rise in postal returns, the effects of which are unrealised by so many. Increases in fuel consumption for increased deliveries and increased paper usage (even though the order was digital), are having a negative impact on our environment. Trying goods in store can alleviate this to a degree.

Ultimately success for any retail brand is measured on sales. New technology is also aiding retailers in creating what is now widely known as an omni-channel consumer experience, giving them the digital tools to be able to fully understand a consumers journey and activity across multiple channels and to offer a ‘preferred’ and ‘personalised’ experience for each and every individual consumer.  Every digital device, whether it be a touch screen kiosk in store or a mobile phone, can be linked to remote networks to pass behavioural and purchase history information on a consumer to a central database that can then be mined to learn about each consumer and provide them with a unique offer. This is a retailers ultimate goal as it will ensure that a consumer remains loyal to their brand based on a consistently excellent experience of the brand both online, through mobile and in store. With so many consumer digital touch points to monitor and optimise, this is a real challenge.

Perhaps we will be looking towards a future where a global sizing standard is implemented and where scanning technology can tell you exactly what size to order? This would certainly reduce the amount of unnecessary returns, but could also potentially offer a wider range of goods to consumers based on the insight gained from ‘body size’ statistics. For example, a new ‘wider’ foot range may be introduced when its realised that a larger percentage of consumers actually require this. 3D printing technology may also offer a future where goods tailored to an individual can be created quickly and cost-effectively based on a body scan. This could completely change the concept of the retail store.

Combined with the technology now available to create an amazing visual experience in store, the future of retail, although extremely challenging, is exciting and is one industry in which the major benefits of any new technology could be exploited to their maximum for the benefit of both the consumer and the retailer.

If you require help in creating your in-store immersive experience or wish to brainstorm ideas, contact PAULEY on 01908 522532 or info@pauley.co.uk

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