Despite pronouncements that we are undergoing a commercial apocalypse, the physical store is far from dead. No longer threatened by e-commerce - it accounted for only 17 percent of sales in the UK, according to figures from the Office of National Statistics in March - retailers are in fact learning from their online counterparts. Yet one thing is very clear: they must accept that the role of the store is changing and, in order to evolve, physical stores must embrace the technologies that help their online competitors.
At their recent forum ‘Retail Futures 2018,’ The Future Laboratory, a strategic foresight consultancy, paints a more nuanced picture: one of purposeless commerce and stores in a state of flux. In the accompanying report, The Future Laboratory also predicts that the store will not be purely experiential hubs ‘without products’ nor ‘screen-filled fulfilment centres.’ Instead, they will be a combination of the two, powered by tech.
Meredith Smith, strategy director at the consultancy, explains: “As the rise of premium niche brands like Mansur Gavriel and Off-White begin to erode the luxury share of spend, simultaneously, consumers are growing weary of traditional flagships and dissatisfying ‘showrooming’ spaces.” This scenario puts even more pressure on retailers to find succinct and immersive ways to portray the essence of their brand and entice shoppers to spend time and money in-store.
“From a retail perspective, the challenge for fashion brands, in particular, is to develop a language which brings that same sense of momentum, event and theatre, cultural co-branding and newness to the physical retail experience,” says Alison Cardy managing director at design consultancy HMKM.
“The savvy retailers - those who are moving with their customer - are building a tailored, experience-driven shopping visit for their guests. Selfridges is probably the flagbearer with a cleverly curated series of events, such as the recent ‘Flipside,’ to keep their customer interested and inspired,” she adds.
This recent multi-sensory exhibition on radical luxury indicates that Selfridges is leading the huge paradigm shift taking place in retail, fuelled by new technological possibility and changing consumer expectations. “Those key-words - energy, excitement and engagement - can equally be applied to the consumer’s retail expectations.” Cardy contines.
“The savvy retailers - those who are moving with their customer – are building a tailored, experience-driven shopping visit for their guests”
“Customers are more mobile than ever before - and the retail destinations they are embracing, whether it be Shinola or Samsung 837, are setting a new bar in terms of compelling customer experiences.”
The overlay of digital content onto the physical world is increasingly attractive to brands and retailers creating these new experiences to entice customers in-store and ensure brand loyalty. This layering of reality with the virtual is already been across a range of sectors: avatars are already infiltrating our daily lives (we all remember Pokèmon in 2016) and The Sims have just released a collaboration with Asos.
Tapping the trend, Gucci’s SS’18 campaign featured scannable adds mixed with virtual experiences and augmented reality. Across over 50 stores consumers were given access to RV devices, and for those unable to purchase or make it to selected outlets, augmented reality effects were accessible on the printed campaign illustrations via the Gucci app.
According to the forum, retailers need to be much better at harnessing digital tools in order to bring the speed and convenience of navigating an online store to a physical setting, as well as aid with the visualisation of product. This is where the majority of augmented reality applications are making the greatest impact.
Following a host of brands from Lacoste to Sephora, Inditex’s retail giant Zara introduced its AR app to enable customers to virtually ‘try-on’ garments in April. Customers could point phones at the empty store windows and podiums to bring two holographic models to life in what was an oddly realistic experience. Users were also encouraged to share the virtual experience on social media, completing the virtual loop.
“AR is a natural storytelling medium, where you can use space and movement to create unique experiences for people”
In a recent US survey by Retail Dive, more than 65 percent of consumers said they research products online before entering a store, meaning that as well as wanting to use virtual ‘try-on’ or visualise products in the home, a service offered by Amazon, customers’ visits are also now more intentional.
Moreover, according to Pointsource, 49 percent of consumers said they are willing to shop more frequently with a brand that uses AI to offer faster and easier-to-use customer service capabilities. US store Lowe launched it’s Lowe Vision app last year, offering in-store navigation to guide customers through the building using a mixed reality interface. Using motion tracking, area learning and depth perception, it also finds the fastest route to check out.
In September 2017, Apple’s latest iOS 11 offered a new feature that maps the inside of locations including shopping centres and airports. In the report, Miya Knights, head of global retail technology practice at Planet Retail, points out this is an essential precursor to bringing AR into buildings: “The Apple Maps connection with the AR layer over the top could bring in some really immersive experiences that are going to gamify shopping.”
Another new app that could also help transform the retail landscape is Weird Type. Developed by Zachary Lieberman and Molmol Kuo, it allows you to create graphics in space using augmented reality. “AR is a natural storytelling medium, where you can use space and movement to create unique experiences for people,” Lieberman tells ORDRE.
“I think AR can be used to help tell a product story, to help people ‘try on’ or visualize product and generally to create an additional play with space. In the case of my app, it wasn't designed for retail, but already brands such as Hermès have used to create content for their campaigns. It’s more about what do you want to say and how can this tool help you say it?”
Thinking outside the box, like combining apps like Weird Type with the scale of mapping that iOS 11 could bring, presents new, dynamic ways for retailers and brands to tell stories and engage with consumers. From multi-layered and multi-functional wayfinding to the sharing of extraordinary, augmented moments, retailers globally need to get serious about tech.