The end of the 20th and the beginning of the 21st century saw the widespread use of the Internet and the appearance of e-commerce. It is when today’s e-commerce giants, such as Amazon, Net-a-Porter or YOOX were born. Brands and retailers, especially in fashion observed this trend with astonishment and then rushed to develop their e-commerce websites alongside traditional brick-and-mortar shops. But these two – physical and digital – remained somehow parallel universes with little connection between them. That was the age of the multichannel.
These days however we are facing even more complex challenges. Consumers don’t care about channels anymore, all they want is to access their products the way it is convenient for them in a given moment. They get inspired in stores, on the street or in social media, they go try things in shops, then they go on the internet to find other products or to compare prices. They are using all available channels simultaneously, physical and digital, e-commerce, social media, mobile, desktop, tablets… The boundaries become more and more blurred, we want things available at one click pretty much anytime and anywhere and we expect the same level of service and experience. Omnichannel is the response. It is a strategy where a brand no longer distinguishes between different channels but offers a coherent, seamless experience to their users across all channels.
After an explosion of the e-commerce now it is time for physical stores to experience a revolution. It is something that they cannot avoid if they want to survive. According to Barclay’s report “The new retail reality”, the variety and number of physical stores has been decreasing. Consumers are now looking for more personalised and curated content of stores where they don’t have to go through endless racks of clothes but can find curated suggestions and inspiration. A bit like on social media where they follow the influencers that fit with their taste but also propose new products and styles. The Barclay’s report also points out at the decreased loyalty of consumers. They became more informed and more demanding, they read reviews, compare prices, listen to influencers and they switch through different channels at their convenience. Value became the biggest driver but availability of more suited products and customised service are also important.
Some retailers have already understood these developments and are experimenting in the retail-technology field. Here are some interesting examples.
Tablet devices are now present in many fashion stores: thanks to them shop assistants can find articles that may be unavailable in store, check sizes and stock. But in the future they may be also made available for shoppers to use in-store. Retailers also invest in proximity technologies which will allow to communicate directly with passing-by and in-store consumers and to send tailored messages (for instance about special offers or available products) to their smartphones.
Several technology companies experiment with virtual reality (VR) and its applications in physical shops. For instance brands can use VR headsets to showcase their latest fashion collections to customers. Outdoor apparel company North Face used VR to transport their customers from stores to Yosemite National Park.
Virtual try-ons and augmented reality are a great way to increase consumers’ experience both in stores and online. Creative agency Holition developed ‘Magic Mirrors’ for the launch of Charlotte Tilbury flagship store in London’s Westfield. The touchscreen Magic Mirrors allow customers ‘try on’ virtually each one of Charlotte’s 10 iconic Makeup Looks. As Charlotte Tilbury put it: “I want to revolutionise and disrupt the way people shop. For me, this environment is a personal space. My store is like my home, but also a place where my different working worlds collide – its inclusive, fun, glamorous, bringing back-stage, front-stage.”
The mirrors deploy Holition’s highly advanced real-time tracking and realistic visualisation to give you the most adequate picture that takes into account your skin tone and at the end suggests the look that suits you best.
Holition also developed an app ‘Face by Holition’ that can be downloaded on smartphones and allows testing many make-up products at home. Holition already cooperates with several brands, such as Rimmel and Sally Hansen.
US brand Rebecca Minkoff is opening connected stores across the US. The stores are equipped with interactive screens on the shop floor and in the fitting rooms. Shoppers can view curated look books and even order a drink. Once in the fitting room they can see on the screen the item they are trying in a different colour, size or get styling suggestions. They can also request help from a store associate and select various lighting themes (e.g. daylight, evening light). The technology is based on Avery Denison RFID tags that recognise items that are brought for fitting. This next generation mirror gives shoppers an optimal retail experience and allows retailers to capture critical shopper data such as the volume and duration of fitting room sessions, shopper interactions and associate response times.
The investment is paying off: Uri Minkoff says that 30% of customers are asking for additional items from the smart fitting rooms and the sales in the connected stores grew significantly.
Imersivo, a company from Barcelona goes even further. Their technology analyzes customer’s height, body-type, skin tone, hair & eye colour and even the clothes they are wearing to determine their age, gender and fashion preferences. Based on this data, Imersivo displays personalised recommendations. Deployed in-store, Imersivo can then allow shoppers to select items for online delivery or in-store purchase or save the products on their smartphone for a later purchase.
Not only in-store experience matters: Panasonic created smart shop windows that show real-life products and interact with user who can for instance check the price of items on display.
These are just some examples of early applications. Some may argue that it is too soon and that consumers are not yet aware of the possibilities offered by new technologies.This is not really the case. The Barclay’s study reports on the findings of a survey asking UK customers to say to which extent the availability of new technologies would make them visit the store. Smart fitting rooms would attract 57% of the respondents. 57% would also be interested in Virtual Reality and 52% in augmented reality. Many customers are already familiar with touchscreens and hence this is the technology that is most likely to make them visit a store (65% of respondents). However we are not yet ready for robots to replace shop assistants: only 23% would appreciate this experience.
The trend is even more pronounced in the US: according to the Innovation Group and WWD report Frontier(less) Retail, 79% of Generation Z and 66% of Millennials said they would shop in a physical store if it included an interactive experience that would help them select or customize a product.
Without doubt, new technologies create new opportunities for retailers to increase sense of engagement with their customers. But this also becomes a challenge for many brands. They have to seriously step up their innovation efforts and invest not only in innovative products but also in the accompanying retail experiences.
And it is no longer just about physical vs online, brick-and-mortar vs the Amazons of this world. It is no longer about having a strategy and a digital strategy: it is about having one omnichannel strategy that does not distinguish between physical and online environment. The winners will be those that will manage to create a hybrid, seamless experience across all the channels.