Incumbent retailers fight to survive in the ecommerce epoch
When the last of 807 Woolworths stores across the UK closed in January 2009, budget shoppers and pick and mix fans mourned the end of an era. The closure of one of the country’s iconic retail chains showed that high street shops were struggling to keep up with the pace of change, and that even industry giants were not immune from disruption. History repeated itself earlier this year when major toy store Toys R Us became yet another casualty. Heralding the death of the high street seems somewhat severe, but it’s clear that incumbent retailers are facing a monumental challenge. In the face of ecommerce behemoths, (and not just Amazon), retailers are increasingly becoming technology companies in their own right. But how?
If there’s anything that proves that the high street is still in heavy demand, it’s Black Friday. However, the annual shopping frenzy can be bewildering for in store customer service teams. In 2015, Walmart partnered with STRIVR to develop Virtual Reality training. The technology was used to prepare workers for the hysteria of Black Friday, putting them in a virtual environment. Through VR, Walmart better equipped its employees to handle the rush of customers on the hunt for sales.
Although Ocado is an ecommerce retailer, the company is a prime example of how a ‘cocktail of technologies’ can be used to build a better brand. Ocado applies Artificial Intelligence to automate administration, data analytics to predict demand, and is trialling driverless deliveries. Perhaps their most well known tech venture has been smart warehouses, in which collaborative robots pack customer orders.
In 2013, Tesco began trialling a facial recognition solution for targeted advertising at petrol stations. In theory, by working out the gender and age of a customer, the supermarket chain can deliver promotions and ads that are relevant to that demographic. The proposed system has been met with criticism, but Tesco is also planning to apply facial recognition as part of self service checkouts to verify age. Customers scan their ID, and then biometric tech provided by Yoti scans their face to see if the two match.
Geofencing uses GPS or RFID to create virtual boundaries around physical locations. These boundaries then trigger a response on mobile devices. So, when you pop into Starbucks, you might receive a coupon for a breakfast meal deal or a prompt about what coffee to pick. As well as sending offers or reminding customers that their favourite seasonal latte is on sale, geofencing is also used as part of the coffee chain’s order ahead service. Customers simply choose and pay for what they want online and then head to their local Starbucks to pick up the order.
5. American Apparel
Many customers prefer to shop online because they can view extensive product information and reviews. This is not something that can always be done in store, at least not without the help of a sales assistant. To solve this issue, North American clothing manufacturer American Apparel has developed an Augmented Reality app. Customers capture an image of a product which is immediately recognised by the platform. The customer can then view product information, stock availability, additional sizing and colours, and also reviews, all within their mobile phones.
Although Amazon now has its own 3D printing marketplace, it was Shapeways that pioneered 3D printing in retail. The company gives consumers the opportunity to create their own unique products using additive manufacturing. 3D printers provide a rapid and cost effective way to create custom items based on CAD (Computer Aided Design) files, which can be sent to Shapeways and turned into a finished piece.
At the end of last year, fashion brand Zara announced that it would be rolling out self service machines in its high street stores. The machines detect nearby items, meaning that customers don’t have to scan the barcodes and can confirm the products that have been recognised. Self service checkouts are a regular fixture in supermarkets, but now Zara is hoping to use the same system to reduce queues (which can ruin the in store experience) and drive sales.
8. Richline Group
In April, jewellery retailer Richline Group announced that it had teamed up with IBM to track the diamonds, stones and minerals used in jewellery via blockchain. A greater awareness of unethical supply chains has led customers and companies to want to know exactly where their gems have come from. Through blockchain, the journey of a diamond or other precious stone can be tracked from the first to final sale. All parts of the process are recorded to ensure that it is both legal and ethical.
US hardware company Lowe’s has developed a customer services robot called LoweBot, a NAVii autonomous model that helps customers as they browse in store. LoweBot is able to locate products, answer simple queries, and monitor inventory. This frees up human employees to deal more efficiency and effectively with more complicated customer requests. Lowe’s initially introduced the robot at selected locations in San Francisco in 2016. Since then, the company has rolled out the machine in stores across California.
10. L’Oréal Paris
Personalisation and customisation characterise consumer expectations, but this is difficult to achieve when it comes to cosmetics. Each person’s skin, hair, and product preferences are different. L’Oréal Paris, however, has released an app called Makeup Genius which lets users apply virtual makeup. Customers can choose exactly what products they want, without purchasing items that don’t quite suit their skin tone or eye colour. The try before you buy service doesn’t involve using physical products, but it creates a seamless and fun retail experience that helps customers make the right choice.
The retail industry, despite high profile casualties, is learning how to leverage technology to meet new demands. Innovative tools from 3D printing to blockchain are now used by retailers to provide personalisation, customisation, security, efficiency and enhanced customer service. In applying innovative technology, retailers aim to bring the seamless experience of online shopping to bricks and mortar retail, without taking away the traditional element of browsing and interacting with human sales teams. Ecommerce has forced incumbent retail to change, but for those who can use digital disruption to their benefit, everybody wins.
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