How is Technology Affecting the Future of Retail?
While still working in Shanghai in 2016, I attended a conference on the future of retail. Featuring guest speakers from Apple, Nike and other international brands, what I found most interesting was the general agreement on one fact: retail is forever changed by innovation.
The future of retail is all about the best use of technology, personalisation, and convenience. Is this a given?Maybe: innovative marketing and businesses have always thrived. Futurists of the retail world have seen a jump from offline to online, creating a make-or-break moment for many companies. Many brands have already been left behind, and now it’s critical for retailers’ future to understand the trends and tricks to surviving in today’s tech world. In this article, I want to talk about a few of the biggest changes – and the importance of automation, e-commerce, and offline strategies- as well as what we can expect in the future.
E-commerce Revolution
It’s no secret that the offline retail industry is struggling to keep up sales when compared with the convenience of online shops. Online shopping, or e-commerce, makes it easy for people to browse from hundreds of stores everywhere and anywhere, and have it delivered to your home at your leisure. Online sales are especially strong in rural areas, where getting to a physical store takes greater time and effort. Unfortunately for many retailers, this quick switch has left them in the dust, with some driven to bankruptcy. Some businesses ignored the relevance of e-commerce and were late to the draw, while others simply could not keep up; those who adapted are now reaping the benefits. In China, e-commerce is growing to be the most important point of sale, especially considering the widespread use of mobile payment options. Alibaba, one of the biggest players in the e-commerce market, started a Black Friday-esque e-commerce holiday held on November 11th, known as 11.11. This year, sales exceeded $25 billion USD. With those numbers, it’s clear e-commerce sales cannot be ignored.
E-commerce is also no longer just a sales channel. Businesses investing in predictive customer analysis are able to understand their customer preferences better, and use the data to create targeted marketing strategies. Many big brands already use artificial intelligence software attached to e-commerce platforms to identify customer behaviour. In turn, planners use this data to create strategies and products to compliment the data. Personalisation is expected to be the key differentiator, leading companies to develop custom-tailored products and experiences in order to win the game.
Keeping Retail Alive: Companies Winning the Game
Most brick-and-mortal retailers now recognise that in order to remain relevant, they must offer in-store experiences that online platforms cannot provide. Nike, known for its innovative marketing strategies, introduced its first ‘running store’ in Tokyo. Customers run on the treadmill and record the pace and nature of their run. A specialist then analyses the results and offers their best personal shoe option based on their running style. Their New York store also provides this service, but goes one step further – customers are invited to play basketball inside the store as specialised cameras record the action from different angles. The footage is then available for download so people can share them on social media. This is a great example of combining digital marketing with offline experience, showing that they deeply understand their consumer and ideal user experience.
Apple was an early pioneer of offline. They began to replace stores with ‘town-squares’, encouraging people to gather there to exchange ideas, learn, and socialise. These future stores may not even hold inventory (or will simply have samples for customers to try if they choose) and instead will entirely focus on experience and brand building.
Offline strategies are necessary in the premium fashion world too. Designer Rebecca Minkoff tripled her clothing sales by using an interactive (touch screen) iPad placed in the changing rooms of her stores. The technology allows her customers to request items to their changing rooms, while simultaneously giving them style suggestions based on the pieces they selected.
Automation
To further ease you into your shopping experience, Rebekah Minkoff’s New York boutiques have also introduced self-checkout, following in the footsteps of Zara has likewise tested a similar self-checkout concept in their Spanish stores. Self-service and automatic purchasing is on the rise, with 67% of the people in one poll saying they prefer self-service. As well as technological convenience, offline stores across the globe have started offering delivery services of their products, saving shoppers the trouble of having to lug around their purchases. Today this is still a slow service, with a typical delivery time of two days. In a few years, however, your shopping could arrive by you, carried by a helpful drone deliveryman.
What’s Ahead
One of biggest tech movements for the future of retail are the continued development of both augmented reality (virtual reality), machine learning (artificial intelligence), and biometric purchasing. The goal of augmented reality is to provide as close to an offline experience as possible when it comes to shopping. An early example of this technology in use is with Chinese e-commerce giant Alibaba’s Buy+, released in November 2016. Through the platform, customers can currently browse the stores of Macy’s, Costco, and Target in the U.S. as well as selected shops in Tokyo. The future of this platform will be for shoppers to experience interactive shopping anywhere in the world. The application is linked with Alibaba’s AliPay, so customers can pay with a nod while wearing the VR device. Customers can also select items from shelves, virtually try them on, and interact with models.
Biometric purchasing is an umbrella term for number of technologies related to automatic purchasing based on your biological information. It is essentially the future of fingerprint scanning. Voice recognition, iris scanning, and facial or fingerprint verification systems are all examples of this, and will be an important aspect of retail sales in the future.
When learning about all of these new technologies, it’s easy to be intimidated by what the future may hold. If you’re a smaller business owner, it can be scary to look into the future and wonder how you will accommodate for these technologies. Start learning now to find out how you can integrate even a few of these technologies into your future plans, and you will may be able to ride the wave of technology into future sales.
What is your take on these new innovations? Is there anything you’ve tried or would like to experience? Share your thoughts in the comments section below!
