Dr Eloise Zoppos, senior research consultant at Monash University’s Australian Consumer, Retail and Services (ACRS) commercial research unit, looks at how technology can transform and enhance the physical retail experience for shoppers.
Amidst reports of declining department store sales and a number of physical retail store closings (think GAP, Espirit and Metalicus just to name a few), there has been a lot of speculation about the future of physical retail in Australia and whether it can survive – and thrive – with the rise of online shopping, or whether we’re seeing a so-called ‘retail apocalypse’.
Recent data from the ACRS quarterly survey of shoppers, however, shows that Australians still prefer to shop in a physical store, with 62 percent shopping at physical retail stores all or most of the time.
This is compared to 14 percent of Australians who prefer to shop via a retailer’s website and 10 percent preferring to shop at online-only retailers, such as ASOS.
So while we’re not seeing a retail apocalypse, what this shows is that with the ease and convenience of online shopping, people have to want to go to physical retail stores. And retailers need to give them that reason.
Here’s four ways that retailers can use technology to enhance the physical retail experience and encourage shoppers to visit physical stores.
1. Technological enchantment
While it might seem like a paradox, technological enchantment is all about hidden technology and layering it over physical stores and products to generate a sense of whimsy and wonder. Zara is a great example of this with their augmented reality (AR) activation from earlier this year, where customers inside select stores around the world (including Sydney) could scan store windows and in-store central podiums with their Zara app to unlock hidden AR content, such as holographic models. Another example is cosmetics brand Charlotte Tilbury. They’ve built in-store ‘magic mirrors’ which use AR to give customers a virtual make-over so they can visualise how different products would look before spending time trying them on in real-life.
2. Hyper-personalisation
Personalisation isn’t new, but technology-enabled personalised try-and-buy experiences are becoming more and more sophisticated. The Nike Makers’ Experience in the US, for example, allows shoppers to custom design their own one-of-a-kind sneaker and have it printed within 90 minutes. The experience uses AR, object tracking, and projection technology to bring the design to life on the customer’s feet to allow them to see exactly how the design looks from a 360 degree view. In addition to personalised try-and-buy experiences, there’s also a move towards personalised in-store navigation. For example, customers at select Lowe’s Home Improvement stores are greeted by the robotic shopping assistant, LoweBot, which directs shoppers to the product they’re looking for and also shows them special offers and tailored recommendations based on what the customer was looking for.
3. Interactive payments
Introducing cutting-edge payment methods can streamline the physical retail purchasing experience for shoppers, whilst at the same time also making the purchasing process fun and interactive. KFC in China have partnered with e-commerce giant Alibaba to create ‘smile-to-pay’ where customers can literally smile to pay for their meal. Customers can choose their meal at a special ordering machine, which then uses facial recognition software to compare their face with the verified picture on their Alipay account (a digital payment method used in China that links to the customer’s bank accounts). Popular burger joint Caliburger is doing something similar at their flagship store in California. Customers with a Caliburger loyalty account can smile at the camera in the ordering kiosk and it uses facial-based recognition to process the payment via their account.
4. Multi-sensory experiences
Technology can also be used to create a multi-sensory wonderland for consumers by enhancing the everyday fitting room experience. For example, MasterCard recently announced it would be rolling out ‘smart mirrors’ across a number of UK stores this year. The interactive touch mirrors allow customers to virtually request different sizes or colours from sales associates without having to leave the fitting room, as well as pay for their items on the spot to speed up the purchasing process. What elevates the experience to the next level, is that the mirror creates a multi-sensory experience by allowing customers to choose their preferred lighting and music inside the fitting room.
These examples show that technology is crucial in helping physical retail to continue to evolve and meet and exceed consumer expectations. But they also prove that sometimes ecommerce alone just can’t compete with physical stores – and that’s good news for retailers.