Disrupted Retail Fighting Back With Tech
Retailers are playing a game of technological dress up to entice consumers
2017 was the worst year on record for bricks and mortar retail in the US. Consumers are all the more demanding, making it harder for retailers to remain relevant. Meeting customer needs has become even more difficult as ecommerce disrupts traditional infrastructure. How can retailers cope with the fast pace of change? It’s all about adopting technology – but the challenge is deciding which techniques will best improve overall experience. Retail businesses need to kick off their Louboutins, and cut to the chase.
Trying disruptive tech out for size
Abandoning traditional business models in favour of disruptive tech is not easy. Companies need to work out how much value a certain strategy will have, whether it is worth investment, and if they have the resources to successfully implement it. AI, for example, has opened up a world of possibilities for savvy retailers. Through predictive forecasting and prescriptive analytics, companies can gather data and put it to good use by working out what is most likely to drive sales and meet consumer needs. Not only this, but AI has the power to consolidate supply chains, in turn benefiting the customer and leading to higher revenue for the business.
According to McKinsey and Co., AI could reduce forecasting errors by as much as 50 per cent. It’s no wonder that tech leaders Alibaba and Amazon have used AI to build digital storefronts that are tailored to individual visitors. On the theme of personalisation, AR is enabling customers to digitally experience products before parting with their cash. L’Oréal’s Makeup Genius app, for instance, has been downloaded by over 20m people. Couple this with advances in facial recognition, and retailers have the advanced body scanning tools necessary to build digital changing rooms. Amazon has taken this from concept to service via Amazon Echo Look. Blockchain technology is another innovative solution that can play a role in making sure consumers get exactly what they want. It can be used as an authenticity tool, verifying that a product is genuine as well as that it was created according to ethical standards. This connectivity will be further enabled by Internet of Things networks, connecting supply chains.
It’s not just retail companies that are applying these techniques. Big corporations, notorious for sticking their figurative fingers in as many pies as possible, are also disrupting bricks and mortar shopping with the development of contactless shopping. In China, WeChat are pursuing a contactless strategy in which customers pay using their mobile WeChat wallets.
The retail revolution
What does a retail sector draped in so much technology look like? From a customer perspective, the regular shopping experience will be augmented with extra tools and technologies that will, in theory, improve their overall satisfaction. Data, if collected and analysed in accordance with regulations, will transform the industry alone by taking the guess work out of product recommendations and targeted advertising. Augmented Reality (and Virtual Reality) will create a meeting point between physical stores and the digital sphere, while blockchain tracked products could lead to greater trust between companies and consumers. Soon enough, it will be difficult to distinguish between ecommerce and commerce. As always, there are vital considerations to be made both before and after implementing a certain strategy. The success of AR and VR, while providing a rich customer experience, relies heavily on the quality of the hardware. Compromise on this, and the whole experience unravels. Retailers should be equally wary of bombarding customers with technology that doesn’t answer an unmet need. In store push notifications, for example, could quickly irritate shoppers. Similarly, the human aspect of retail experiences remains essential.
Digital disruption has clearly impacted the incumbent retail infrastructure, but this doesn’t mean that bricks and mortar retail is over. Popping to the shops is a communal experience that is integral to society, and that fact won’t go away any time soon. Instead, disruptive technology is facilitating a whole new retail experience that merges digital insights with physical reinforcement. Each strategy, whether it be AI, AR, blockchain, contactless payments or smart production methods like 3D printing, is geared towards personalised and relevant retail. It’s up to retailers to decide which of them are worth the price tag.
Could your business make use of consumer facing technologies to improve customer experience? Will small to medium retail enterprises be able to compete with tech ready rivals? Are big tech companies moving to dominate the retail sector? Comment below with your thoughts.