Retailers are bombarded with new technology claiming to revolutionise their business, but in such a saturated environment, knowing which solutions actually provide ultimate business success can be a challenge.
Many innovations fail to capture the shopper’s imagination and are perceived as nothing more than gimmicks. Technologies such as 3D printing, digital assistants and drone deliveries are leaving many consumers cold: how exactly are they actually supposed to apply this tech to everyday life? In fact, recent research by IBM found that 70% of consumers have found their branded digital interactions to be disappointing.
Yet despite an evident technology dissatisfaction among consumers, stores and brands are constantly being told that technology is one fundamental way to meet shoppers’ demands – which have become more complex with the rise of tech giants offering up personalised and immediate retail services. How exactly do we strike a balance between using technology that provides customer value and keeping up pace with an industry under rapid innovation?
The knack isn’t to chuck things at consumers and hope for the best. Retailers must use common sense, data analytics and in-depth research to understand what technology will entice their audiences – and of course – this will differ depending on who exactly the audience is.
Ignore the hype and consider carefully how tech can remove barriers to customer service and boost shopper engagement to generate more sales and bigger profits. It could be improved payment solutions or other technology that reduces queuing, enhances the shopping experience or makes category management more effective.
Take artificial intelligence (AI) and virtual reality (VR) – two technologies that are making a profound impact on the industry.
Even online giant Amazon is reported to be considering using VR in its new physical homewares stores to help customers visualise how furniture or appliances will look in their homes. VR stimulates the senses and is certainly popular in the travel sector where traditional travel agents are feeling the pressure to come up with innovative ways to tempt consumers into their stores, especially when 76% of people booked their holiday online in 2016.
Agents need help to sell the entire ‘experience’ of a destination, and by creating an interactive VR experience in a branch people can visualise what it might be like in a location, on a ship, plane or hotel. They can also observe other things that are important when booking a holiday, such as the entertainment for their children. This provides a clear advantage over simply searching for a holiday online and hoping for the best.
Norwegian Airlines used VR at Westfield Stratford City to transport shoppers to New York, Los Angeles and Miami on a Boeing 787 Dreamliner using 5D virtual reality (VR) headsets. It wanted something different to increase its brand awareness in the UK and viewers also experienced the cabin and the high level of customer service.
Retailers and brand owners are also investing in the relatively new but growing area of virtual research to look at their stores through the eyes of the shopper. Virtual stores are created to test new merchandising ideas and the in-store behaviour of consumers wearing VR headsets is analysed. This technology is complementing the traditional focus group and provides that additional context needed to make the customer experience a success.
VR reveals what people are reacting to in-store, including which point of sale material and promotions they interact with. Trying out ideas virtually also has the added benefit of being less expensive and disruptive than testing different solutions in a real shop.
Ultimately retail technology is only worth its salt if it improves the customer experience – AI for instance, can be extremely useful for finding new ways to improve customer service because someone’s future shopping behaviour and preferences can be predicted by building on data analysis.
In April, visual recognition technology was trialled at Brent Cross shopping centre in London to help retailers and brands. The software is a visual search engine which lets shoppers upload a photo of a product to discover where within the centre they might find it or something similar.
I’m sure we will also see more retailers using online chat bots to predict the questions someone might ask and then suggest appropriate products and gifts based on the knowledge of that person built up over time. Retailers and brands can even use AI to improve their stock management by using information from weather forecasts, purchase rates and previous consumer behaviour.
The key test before any investment is made is to ensure the customer remains at the forefront of the decision making process to avoid spending money on a technology white elephant.
Peter Veash is chief executive of The BIO AgencyImage credits: