10 Technologies That Could Change Retail Forever
Remember when showrooming was the enemy of physical retail? These days, it’s a welcome part of an omnichannel strategy. And it’s also just one example of the ways retailers are buying into technology to sway customers in their direction, wherever they might be.
by Todd Wasserman
Posted on 10-25-2017
There was a time when retail meant only one thing—a physical store. But in 2017, retail can mean everything from brick-and-mortar and online to mobile and voice-based search.
For consumers, however, the motivating factors behind their purchases are the same. They want their goods at a reasonable price and as soon as possible. (Some might even opt to have them delivered and waiting inside their front doors.) The most successful retailers realize this and are offering seamless service at all touch points.
Think about it: You can now shop at Amazon on your phone, desktop, in a physical store (with its $13.7 billion summer purchase of grocery chain Whole Foods), or by summoning Alexa. Most shoppers flit back and forth between these various touch points. A recent survey of 46,000 shoppers found that only 7% shop exclusively online and just 20% shop only in stores.
The survey also found that retailers benefit by offering a seamless experience across mobile, desktop, and in-store. Consumers who browse a retailer’s website spend an average of 13% more in store, the survey found.
As consumers get more comfortable with digital, though, in-store traffic suffers. Last November, for instance, store traffic fell 11.4% year over year, according to consultant Retail Next. “One of the challenges that retailers have today is that people stay home and shop,” said Dawn Burrows, senior program manager at Adobe (CMO.com’s parent company). “The largest challenge they have is getting people back into stores. One of the ways they’re doing that is bringing the digital experience into the store.”
In-store technology is one way of bridging the gap, but online, mobile and other consumer interfaces keep evolving, too. Here are 10 technologies that are changing the game for retailers.
Physical Showrooms For Online Sales
At Bonobos’ New York City stores, customers can come in and try on clothes, but they can’t leave with any. The company’s “guideshop” has every size shoppers could want, and “guides” at the stores helps them find the right fit. Then they have to place their orders at the store and have it shipped to their homes. Returns can be made back at Bonobos’ stores.
Bonobos isn’t the only online retailer to take this approach. At Warby Parker’s showrooms, consumers can try on glasses and have them shipped to their homes. High-end shoe retailers Paul Evans and Jack Erwin also take this approach. In Asia, Zalora displays clothes in pop-up showrooms that consumers can try on and then buy with Zalora’s app via an in-store computer station or with a QR code. Because there’s no inventory, such showrooms require less retail space than traditional stores, so retailers save money on rent and utilities. Bonobos, for instance, does an average of $3,000 per square foot of sales in its showroom sales compared to $450 a square foot for Gap.
The concept of showroom stores may also help draw younger customers. A recent survey from WD Partners found that 55% of Millennials liked the idea of a showroom store versus 28% of Baby Boomers.
Fitting rooms are an unavoidable component of clothes shopping, but customers despise them. A 2016 survey by Body Labs found 46% of consumers “hate” trying on clothes in a fitting room. Yet customers who try on clothes in store are almost seven times more likely to make a purchase than those who just browse items on the sales floor, according to Alert Tech.
Neiman-Marcus’ Memory Mirror aims to solve this conundrum. The mirror is actually a camera and screen that records an eight-second video to provide a 360-degree view of how a piece of clothing, say, a dress, looks on. It also provides a side-by-side comparison of how a shopper looks in two different dresses.
Need an outside opinion? The mirror lets customers email the clips to themselves so they can canvas friends (by text, email, or social media) to ask which they think looks best.
Augmented And Virtual Realities
Retailers of bulkier goods like furniture have a similar problem: How can consumers know how a couch or loveseat will look in their homes? For Ikea and Anthropologie, the answer is AR apps that let customers get a visual representation of how an item would look in their homes.
“You can hold the phone up and the app will take a measurement of your room,” Burrows said. “Let’s say you have a six-foot space. It will offer up furniture that will fit in that space, so it won’t offer an eight-foot couch.”
Apple is a big enabler of such technology; both Ikea’s and Anthropologie’s apps use ARKit, Apple’s framework for creating AR experiences.
One application for the technology might be as an alternative to smart mirrors. Though some retailers, such as Gap, have released technologies that let consumers “try on” clothes virtually, the process has been clunky because it mostly superimposes 2D renderings of clothing to the user’s body. ClothCap, a new system from the Max Planck Institute for Intelligent Systems, though, uses 4D movies recorded by 66 cameras to simulate what a wearer’s clothes will look like when they’re in motion.
Other solutions help the user try on clothes at home. Microsoft’s Xbox One’s has motion-sensor technology, Kinect, also lets users virtually try on items from the comfort of their homes. But since nothing beats the experience of actually trying on clothes, many retailers—including Amazon—simply let users order several items at once so they can try them on at home and then send the ones back that don’t fit or that they don’t like.
Looking ahead, some believe that smart glasses will become a mainstream technology in a few years, and an AR overlay will let shoppers isolate items of interest to make their trips quicker. Retailers could also intervene when a shopper gazes at an item and present an offer that’s calibrated to his personal preferences and situation.
Back to the current day, Lowe’s has taken the AR concept even further with HoloRoom, a home-improvement simulation room in its stores that uses 3D and AR to help consumers imagine their redone kitchens. Some Lowe’s stores also have “HoloRoom How To,” which uses VR to help teach customers home improvement skills.
Another pain point for shoppers is waiting in lines. By one estimate, Americans spend 118 hours a year waiting in queues. While Sam’s Club introduced a self-checkout app in September 2016, the world really took notice of the possibilities of checkout-less stores when Amazon launched Amazon Go three months later. The grocery store (as of June, only one, in Seattle, is open to the public) lets consumers enter by scanning a code on their app, pick up items they want, and then leave. The app’s sensors, computer vision, and deep learning track the items and automatically bills the shopper.
“When Amazon announced that shift, I think it started an accelerated adoption from traditional retailers,” said Maureen Mullen, chief strategy officer for L2.
Retailers can use self-checkout to reallocate their existing staff to make brick-and-mortar more of a high-touch experience, she added. “I’d argue that provides them with a better point of differentiation with online, which is eating their lunch right now,” Mullen said.
What’s more convenient than Amazon Go’s app-based checkouts? How about a system where no smartphone is required? The catch: It’s only available in China. Specifically, a KFC in Hangzou recently launched face-based payment via Alibaba’s Ant Financial unit.
To use it, patrons have to look at an in-store kiosk with facial-recognition technology. In other parts of China, consumers can flash their mugs to pay for their train or bus tickets as well.
Voice-Based And Visual Search
It’s tempting to write this category off because Amazon’s Echo device appears to have an early lead in the market. But retailers including Dunkin’ Donuts, 1-800 Flowers, Domino’s, and Starbucks have created Skills for Amazon’s Alexa that let consumers order items on Echo and other Amazon-based devices.
The catch is that consumers have to ask for such items by name. If they ask for something generic, like “a toaster,” then Alexa will direct the query to Amazon. Though Amazon has hinted at offering paid search on Alexa, the company has not confirmed such plans.
In addition, Google Home technology will suggest local retailers when consumers ask for generic items, such as a new jacket or a set of flatware. Apple’s Siri, meanwhile, calls up local retailers via Apple Maps. If you tell Siri “I’d like to buy a shovel?” it asks “What kind of store are you looking for?” Then it directs you to hardware stores.
As Mary Meeker’s “Internet Trends Report” last year noted, voice-based technology lets consumers shop when they are doing household chores, driving, or on the go. It’s also a draw for Millennials. A recent report from Walker Sands showed 43% of Millennials made a voice-based purchase over the previous year. Consumers in that report said that security, privacy and the lack of visuals were the main reason that consumers were wary of voice-based search. The Amazon Echo Show, which includes a screen, addresses the latter issue.
Voice-based communication has received a lot of attention, but another new way consumers are finding new products is via visual search. In October, Google introduced Google Lens, which lets users point to an item and receive an explanation of what it is. If a person sees someone sporting a nice pair of sneakers, for instance, Google Lens could tell her the brand and where she could buy it.
Google is not the only one offering visual search. Even earlier, Pinterest introduced a similar tool in 2015 that helps isolate images in Pins—for example, a lamp in an image of a living room—and then provides a link to where to buy it. Realizing the implications, Target recently incorporated the feature in its app. Wayfair and West Elm also have introduced visual search capabilities in their apps.
Another new touch point for consumers is via messaging services such as Facebook Messenger, Facebook’s WhatsApp, and Japan’s Line. With some 2 billion users projected to be on messaging platform by next year, retailers can’t afford to ignore the platform. In 2016, Facebook opened Messenger to brands, which unleashed chatbot for 1-800 Flowers, Starbucks, Whole Foods and many others. Sephora’s chatbot, for instance, lets you book appointments with a beauty specialist at the store and get help with purchasing decisions. Whole Foods’ chatbot, meanwhile, offers recipe advice.
Most retailers are still experimenting. Brian Seewald, VP of digital at DSW, told CMO.com that the retailer is still assessing the role of chatbots in its marketing strategy. “The test we’ve done is really about giving customers the ability to get very simple questions answered about where their order is, in an automated way,” Seewald said. “Every time I order something from DSW, which I do frequently, I opt in for Facebook Messenger alerts at checkout because I like to keep checking up on the experience—and it’s a really solid experience.”
Having trouble flagging down a sales associate? That might be less of a problem in the future if more retailers follow Lowe’s. Last year, the home-improvement retailer introduced its “LoweBot,” in 11 stores in the San Francisco area. The LoweBot, created by Fellow Robots, can answer consumer’s spoken questions or let customers type their queries on a touch screen.
More commonly, retailers use robots in their warehouses. Amazon, for instance, uses 45,000 robots in 20 fulfillment centers. In October, Walmart also announced that it’s using shelf-scanning robots in 50 of its U.S. stores to replenish inventory faster.
It has been four years since Amazon announced its plans to offer drone deliveries to customers. Since then, Amazon has followed up on its promise—in a very limited trial program in the U.K. Closer to home, 7-Eleven offers drone deliveries in Reno, Nevada.
As the Federal Aviation Authority continues to mull the legality of the issue, though, drone deliveries are in a holding pattern in this country.
“The technology is ready for mainstream use,” said Mariah Scott, chief operating officer for Skyward, an integrated solutions provider for unmanned aerial vehicles, almost two years ago. “It’s more important to think about how [drones] can be used to enhance a business or a marketing initiative.”
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