How Augmented Commerce Will Save the Brick-and-Mortar Store

So far, 2017 is setting records for retail bankruptcies. J.C. Penney, Kmart, Sears and Macy's all announced that they're closing stores this year. Based on these dire trends, it might seem like the brick-and-mortar store is an endangered species. However, that’s not actually the case. Brick-and-mortar retail still accounts for more than 90 percent of total retail sales, and companies that started online are increasingly moving into the offline world — e.g., Amazon.com, Bonobos, Warby Parker, Athleta, ModCloth, Casper, Blue Nile and JustFab, to name a few.

What these parallel, but seemingly contradictory trends demonstrate is that consumers aren’t rejecting brick-and-mortar shopping. Rather, they're embracing shopping experiences that blend the online and offline worlds and enhance the physical store with digital technology. There are a number of ways forward-thinking retailers can use smartphones to drive in-store engagement and sales, and "augmented commerce" is at the forefront of this shift.

Using the mobile phone camera to scan objects in the real world, combined with superior image processing and fast data analysis algorithms, has become a mainstay of modern-day apps, and the first foray for most consumers into the world of digital augmentation. An early example involved Pokemon Go, where virtual creatures were overlaid on the world as seen through the mobile camera, and users could interact with them. The popular Google Translate app takes it further where text in any language or script when seen through the phone camera gets translated into and displayed in a language of the user's choice. The popularity of these apps highlight that augmentation clearly resonates with smartphone users today. The opportunities aren’t limited to games and entertainment — there are opportunities for retail, too. Augmented commerce takes this idea further by creating transactional commerce opportunities, with the mobile device providing an information and interactive augmentation layer to physical store interactions.

One of the reasons why brick-and-mortar commerce remains dominant is because consumers still value the tactile experience of in-person shopping. They like to see, touch and try things on before buying. One of the reasons why online shopping is popular is because it makes information, reviews and price comparisons easily accessible. Augmented commerce takes the best of both worlds to deliver the advantages of each. It leverages the more than 90 percent of consumers already using smartphones while shopping and delivers on aspects of the online experience they appreciate while in-store.

For example, when a shopper picks up a tennis racket at a sporting goods store, augmented commerce would enable them to scan the item for in-depth information beyond the tag description. They could see reviews and social content from friends and figure out whether that particular racket suits their unique needs, without needing to flag down a sales associate. In addition, this in-store digital layer can include personalized offers, pricing, bundles, financing and payment options, promotions, third-party rewards, and more. Augmented commerce allows consumers to have all the information and options they need at their fingertips, and integrated into their decision-making process. Furthermore, a smart system personalizes the content to that shopper, so they only receive offers or promotions that resonate with their needs and preferences.

Augmented commerce can also virtually expand a store’s inventory by highlighting offsite items. As shoppers view items in-store, the digital layer can present related products that aren't on the shelves, creating a virtual marketplace inside a physical store. And that’s just the beginning — augmented commerce can turn the whole world into a virtual showroom. Consumers can scan a pair of shoes, a purse or a tool and instantly receive more information, including the nearest location that sells the item, applicable discounts or offers, plus instant purchase and delivery options — all from within their favorite application or device.

The potential of augmented commerce isn't lost on traditional retailers. Macy’s, which has struggled with declining sales, recently announced that it's revamping its shoe department to be more self-service. Instead of employees running back-and-forth to the stock room to bring out shoes, select Macy’s are offering self-serve shoe departments. Boxes are located under shoe displays, so consumers can find information and try on the shoes without waiting on harried sales associates. For Macy’s, this approach helps it cut costs.

Augmented contextual commerce is the future of brick-and-mortar shopping. The opportunities are endless for the retailers that know how to take advantage of it.

Ashok Narasimhan is the CEO of Omnyway, a contextual digital commerce platform.