During the next decade, like it has in recent years, technology is set to fundamentally change the shopping experience. Even with the incredible rise in online retail in recent times, a place still remains for physical retail, and the incorporation of technology into these environments will be key in keeping its place on the high street.
There’s simply no getting away from the impact that technology has had, and will continue to have, on the retail sector. According to Sigma’s ‘Retail Trends in 2020’, it has completely transformed, and disrupted, the industry, from the expectation that almost every consumer has access to online through to the introduction of cash-free payments and as is being trialled by the likes of Amazon, interaction-free shopping where clever algorithms work out what you’ve picked up and charge you accordingly.
The emergence of new technologies has given retailers a vision of the future, a new way to engage customers whilst breaking down boundaries by implementing exciting and innovative technology. During the global pandemic digital adoption has soared, with many brands taking the opportunity to enrich their online presence and embrace digital innovations like livestreaming, customer service video chat and social shopping.
As online penetration accelerates and shoppers demand ever-more sophisticated digital interactions, retailers must optimise the online experience and channel mix while finding persuasive ways to integrate the human touch, using ambience, emotion, sound and activity to get customers interested in their merchandise and in a mood to buy.
After a turbulent 2020, the retail industry is in a state of flux according to Nigel Ashman, President of ONVU Retail, and keeping up with all the changes requires the inclusion of innovative technology to gain actionable customer and operational insights. Whilst it may not seem like the right time to be investing in tech infrastructure there is compelling evidence to suggest that it should be at the top of every retailer’s “To-do” list because doing nothing means going backwards.
Technological Trends in Retail
Key emerging technology trends offer a ray of light to retailers after what will probably go down as the most difficult year in retail in history in 2020.
In an article by Dan Berthiaume on Chainstoreage, he highlights a couple of retail trends that could have a major impact on retail in the coming year:
Online returns for anyone – The well-documented surge in online commerce has occurred since the outbreak of Covid-19 is producing an accompanying rise in online returns. Commercial real estate firm CBRE predicts consumers will wind up returning $70bn worth of 2020 online holiday purchases, and there are no signs of a post-holiday dip in digital transactions or returns. A number of retailers are turning what could be a major supply chain bottleneck into a competitive advantage by partnering with a variety of third-party platforms to accept any and all online returns at their brick-and-mortar stores. Simon Malls, Staples, and FedEx Stores are just a few examples.
Autonomous delivery – While self-driving delivery vehicles are still in early pilot stage, more retailers are starting to test them out. Autonomous delivery by nature is quick and contactless, two features which have become even more prized in the Covid-19 era and will likely continue to grow in popularity among consumers in 2021. A few notable projects include Walmart’s self-driving electric cars and autonomous box trucks, Walgreens’ first-in-the-nation drone delivery test, and Amazon’s six-wheel, self-driving delivery robot known as “Scout.”
In an article penned by Tara Johnson earlier this year, she suggests that the past year’s surge in online shopping is here to stay, especially given the hurdles presented by the Covid-19 pandemic and the closure of brick-and-mortar stores. Social commerce – native shopping experiences on a social media platform – offers shoppers an even more seamless way to shop online. Instead of clicking through to a third-party website, users can make purchases right from the social media app or site. In 2021, Johnson believes we can expect to see social commerce become an even more integral part of the ecommerce experience for brands and shoppers alike.
Johnson also argues that there will be an increase in Smart Speaker Shopping. Smart speaker sales reached a new record in 2019, up 70 per cent from 2018. And it’s still growing: By 2025, projections suggest that the global smart speaker market could grow to over 35.5bn U.S. dollars. As we move into 2021, we can expect to see more consumers online shopping without ever having to look at a screen, especially on Amazon. But even brands who aren’t on Amazon can leverage smart speaker and voice search technology. Here’s why: When a voice assistant provides an answer, it also allows users to open the website where the answer was found. For brands that prioritise voice-optimised SEO, this could mean a boost in traffic.
Another trend for 2021 will be subscriptions, according to Lory Ajamian in her article ‘Tech Trends for 2021: The Future of Retail’ on the TotalRetail website. She explains that subscriptions offer consumers a simple way to buy their favourite products and discover new ones. Through curated boxes or monthly membership fees, subscriptions are a convenient and personalised way for retailers to build loyalty and lock down recurring revenue – and an easy way for shoppers to replenish stores without leaving the house.
The online paper by intelistyle entitled ‘The Top 9 Technology Retail Trends of 2021’ suggests that one-to-one hyper personalisation will become a huge trend in the market this year. One-to-one personalisation is the dream of all retailers; some of the technologies that enabled closer personalisation in the past also came with a bundle of privacy issues. However, recent advances in cognitive technologies will help retailers move closer to true hyper-personalization in 2021. This has been one of the most demanded retail trends for a very long time – finally it is here to stay.
Sentiment analysis, A.I. & machine learning, natural language processing currently allow retailers to process huge amounts of unstructured customer data. This data – from online and in-store activity, social media, and other brand touchpoints – can help retailers understand customers’ needs, concerns and their current stage in the buying journey. Retailers can then leverage this understanding to deliver deeply targeted messaging and more personal interactions.
Examples of Technology in Retail
Late last year, Balenciaga, the luxury fashion house that was founded in 1917 by Spanish designer Cristóbal Balenciaga in San Sebastian, Spain and is currently based in Paris, released its Fall 2021 fashion collection in a most unique way.
Highlighted in an online article by Dezeen, the collection was presented in the form of a video game, which sees players travel through a wonderland-style future world, passing avatars dressed in ripped jeans and metal-armour boots on their journey. The Afterworld: The Age of Tomorrow video game was structured over five different levels, or zones which the player simply had to walk through, following a predetermined path of glowing arrows.
The adventure began in a Balenciaga retail store, before players exit onto a city street and hop onto a bus, which takes flight and warps into thin air. While the game is currently no longer available, a video walkthrough of the game is available for customers to view.
The Fall 2021 line, also called Afterworld: The Age of Tomorrow, which is a continuation of its Summer 2021 pre-collection shown in October 2020. Avatars were dotted throughout each virtual level dressed in garments from Balenciaga’s latest collection. This included oversized, tailored suite made from t-shirt jersey materials that were made to look worn and creased.
The brand also reimagined 400-year-old steel knight’s armour in the form of thigh high boots and stilettos made from a lacquered material, designed to represent fashion as “a type of armour to be worn to protect again the elements of judgement”. Other looks saw ripped jeans with coloured patches visible underneath paired with faux fur and puffer jackets.
An excellent example of store space incorporating technology is the Adidas flagship site in London. Branded as Adidas LDN, the four-storey, 27,000sq ft space is opposite Selfridges, it replaces Adidas’ smaller store that was next door to it and features over 100 digital touch points that are all powered by green energy. Not only does the store showcase Adidas’ latest and best-selling releases, it also offers a tech-driven customer experience – such as an interactive changing room.
Offering multiple interactive elements, upon entry to the unit, visitors can view the latest releases and previews of the store’s customisation offering. People can also learn more about the Adidas app and its perks. Meanwhile in “The Base”, customers can take part in product experiences, activations and interactive challenges in an immersive environment made from LED screens and flooring that can change mood and purpose with one click.
Guests are also given the option to customise their own clothes and footwear, a process that can take between 15 minutes and three hours, depending on the design chosen. This offer of customisation also allows people to bring in used Adidas clothing colleagues to prepare the designs. In addition, the store even offers a “Running Lab” where customers can run on an in-house treadmill that records their run and ultimately helps them decided what type of shoes would be best suited to them.
Already an innovative store space, Nike’s “House of Innovation” in New York City is now providing shoppers with an augmented reality-based outdoor challenge – within the four walls of the store.
In a collaboration with AR technology provider Hovercraft, Nike created a digitally-enabled discovery centre for the launch of its All Conditions Gear (ACG) HO20 collection of products. Utilising mobile phones, shoppers can interact with animated models of local wildlife and product innovation stories via AR markers and QR codes located in the store. Highlighted in an article by Chainstoreage, a geofenced microsite serves as the customer’s “digital basecamp.” Nike also provides a gamification component to the experience by providing an interactive map and dynamic checklist that tracks their progress through a series of AR-based challenges. Upon completion, participants are rewarded with a physical gift brought to them by a masked store associate and a digital AR model of the Nike “ACG Hiker” mascot they can keep on their phone.
Nike is also leveraging AR technology to assist U.S. consumers who may prefer to avoid visiting a brick-and-mortar store. The specialty athletic brand is using the Omnivor Holograms for Retail solution as the platform for its new Nike Virtual View feature. Currently offered via the Finish Line and JD Sports specialty athletic apparel chains, Nike Virtual View enables shoppers to select a hologram that matches their size and body type, effectively building a virtual dressing room in their home.
Meanwhile Japanese retailer Uniqlo recently launched its first “neuroscience” fashion campaign in Australia. It was based on the concept of suggesting clothes to the customer on the basis of his or her mood. UMood, a wearable technology, was placed on the foreheads of customers. Then a series of images and videos were shown to them. The brainwave reading provided by the customer’s psychological reactions was placed against an algorithm that then suggested a t-shirt from the retailer’s range to match the consumer’s state of mind. Those different states of mind were categorized as ‘adventurous’, ‘calm’ or ‘stressed.’
Whatever lies ahead in what is expected to be another rocky 12 months for the world and the retail industry, a clear way forward is to continue the merge of technology with the store space across the high street, keeping people coming back and offering new experiences in the age of digital.