The future of retail is being re-imagined – Part 1 Augmented Reality
Imagine the scenario. As you approach a new wine on the store shelf, you are immersed in a holographic environment. You find yourself stood in Burgundy, as a grower shows you where his grapes come from, before transporting you to his winery, where he prepares them for fermentation. Welcome to live holographic sales pitches from the producers.
The concept of a Store of the Future has long existed but is now more pertinent than ever. New technology will be an essential element of the Store of the Future, but it’s not only about using new technologies. Whether individually or collectively – experiential, technological, physical and location are all vital elements.
Retail has traditionally been a transactional environment, but now shoppers frequently want to experience as much as they do to buy. So starting with the customer need, brands are considering the experiences and services that will delight and surprise shoppers while importantly supporting the new customer journey.
The phone is critical to the customer journey and central to the new experiences and technologies being deployed by brands, from AR gamification to automated mobile checkout. In this series of blogs, we look at how mobile technology is helping shape the future of the physical store. Starting with an immersive technology which although not new, is one of the most innovative ways stores can combine the physical and digital experience for consumers. No, it’s not live holograms just yet but Augmented Reality (AR).
For the uninitiated augmented reality is a technology viewed through your smartphone that superimposes a computer-generated image on a user’s view of the real world, thus providing a composite view. AR technology has been around for a while, but apart from the brief Pokémon Go craze (remember those Emo zombies walking around your local park on a Saturday?), it has never quite become mainstream.
Some retail brands have dipped their toe in the virtual water, but are we at the point of the early majority? And will the synchronicity of 5G connectivity and the launch of AR apps or functionalities from the likes of Google or Apple give AR the chance to flourish finally?
A 2020 report from Unibail Rodamco Westfield ‘How We Shop: The Next Decade’ predicts that by 2025 more than half of all retail space in stores will be dedicated to providing experiences because shoppers want to escape from the mundane and are excited by the prospect of escapist experiences. AR is one solution to offer those escapist experiences.
Technology is both a threat and an opportunity for retailers. Today a whopping 92.6% of internet users worldwide use their mobile device to browse online, whilst global spending on mobile applications has risen from $57.7 billion in 2016 to $143 billion in 2020.
It is clear consumers want to use their mobile devices to search price comparisons, look for offers and product information, transact payments seamlessly, and learn from other customer reviews. The ability to share satisfaction or dissatisfaction with the brand in real-time in-store presents challenges for retailers.
Technology also gives the consumer a high degree of efficiency whilst shopping that they are coming to enjoy. But retailers do not necessarily want their consumers to experience efficiency while shopping. For example, in a supermarket, shoppers’ paths often cover less than 50% of the available floor space, but unplanned purchases typically make up around half of the items in their baskets. Either most people’s shopping lists are loosely defined, or they are easily influenced by promotions and displays in-store. Therefore, if AR in retail helps shoppers stay on task and experience increased efficiency, the impact on unplanned purchases and revenues will likely be negative.
But the reverse is more likely. Retailers should embrace AR technology to increase overall spending through unplanned purchases, which can be promoted by encouraging longer consumer shopping paths or increasing dwell time. AR applications can provide retailers with a powerful tool in the form of real-time information from the shopper. Any digital cues can be acted upon to provide customers with real-time mobile promotions designed to encourage unplanned purchases. Implementing AR in-store can dramatically enhance the experience and give shoppers access to enriched product information or virtual product demonstrations to increase purchase certainty.
Research has shown that interactivity and informative content are the key attributes of AR applications that influence consumers instead of any potential entertainment value that the apps may provide. So, how does that compare to what’s happening with today’s retail innovators, and what tactics are they using to attract and engage their audience?
Nike provides shoppers with an augmented reality-based challenge that looks to re-create the feeling of visiting Smith Rock State Park in Oregon at its “House of Innovation” store in New York City. They are gamifying the in-store experience encouraging customers to search around the store for AR and QR codes to unlock information about local wildlife and their outdoor products. On successful completion of the challenge, customers receive a physical gift. Nike is combining interactivity, information and entertainment, and it will be interesting to see if they roll out the concept to other House of Innovation stores globally.
Gucci is one of a handful of luxury brands experimenting globally with AR. They recently launched their virtual sneakers, which at $12 a pair are either a steal or daylight robbery depending on where and when you plan to wear them. Gucci also celebrated the Lunar New Year with a collection dedicated to the Japanese Manga character Doraemon brought to life in-store on the Gucci App thanks to AR. By scanning Gucci ArtWalls and the dedicated packaging, customers will discover the Doraemon character bought to life.
In a more prosaic but certainly informative and interactive way, beauty retailers such as Sephora and Ulta have turned to AR to help customers digitally test beauty products and help in buying decisions. Virtual try-on experiences are an excellent use case for AR in retail heightened by COVID and the increased focus on hygiene. If customers can’t physically test makeup products on their skin, then AR has got to be the next best alternative.
Lastly, and as big Snapchat fans at ChargeBox, one of our favourite examples of utilising AR technology is Burberry’s partnership with Snapchat to promote their Animal Kingdom pop-ups celebrating signature bags and accessories. Burberry has also partnered with Wildlife Works to make the pop-ups carbon neutral. Customers scan Snapcodes for the wildlife around them to come to life, along with informative content about sustainability and conservation. Snapchatters can then create their own content and share it with their network.
As these examples demonstrate, the smartphone is the centre of a consumer’s universe to enable these exciting experiences, which will be used in a multitude of ways to heighten the senses, drive engagement and improve the shopping experience in-store. Using their phones, consumers can shop and engage everywhere they go. In response, retailers must operate smart stores that can anticipate, sense and interact with customers everywhere they go — inside and outside of the store.
So until the time we are able to be treated to holographic wine producers in their Burgundy vineyards or a craftsman of handmade shoes in their studio we’re excited to see how the use of AR develops in retail, are you?
The ChargeBox Story
Since 2005, ChargeBox has led the way in providing secure out-of-home charging for mobile devices. We are the experts in helping companies keep their customers charged and connected and support mobile technology’s new demands.
Our clients benefit by improving customer satisfaction and loyalty, increasing footfall and spend while ensuring their customers can always use their smartphone for payments, information, coupons, and critical apps. As a result, customers experience reduced stress and anxiety from low batteries and feel safe in the comfort of knowing they can securely charge mobile devices and stay connected to their loved ones.
Mobile devices are essential to the customer journey and central to brands’ new experiences and technologies. Support your future customer journeys, and don’t let a dwindling phone battery inhibit your customers from embracing change.