The retail industry is in the throes of a major transformation as the traditional retail model gives way to new modes of “experiential retail.” A key element of experiential retail is the innovative use of technology to provide richer shopping experiences that are more informative, frictionless, immersive and satisfying.
To create richer experiences both online and offline, traditional retailers are employing a number of modern technologies, including artificial intelligence (AI), virtual reality (VR), augmented reality (AR), online communities and live streaming video.
AR is proving to be a compelling way to enable consumers to envision and try products in different styles, colors, sizes and settings. Sephora, for example, is using AR to enable customers to experiment and interact with its cosmetic lines. Sephora's mobile app, Virtual Artist, leverages AR to enable users to digitally try out different shades of lipstick, eyeshadow and other cosmetics. Users find shades that match their skin tones by scanning their faces to get their "Color IQ."
AR applications also enable shoppers to insert products into scenes virtually. Ikea, for example, has introduced Ikea Place, an iPhone app that lets shoppers preview how furniture will look in their homes.
While AR provides layers of digital interactivity within the real world, VR is a self-enclosed immersive experience that brands can employ to whisk shoppers away to thrilling exotic places and to showcase their products. The most natural way for brands to promote their products and services is to employ VR in harmony with their industry and offerings. Marriott, for example, lets customers take virtual tours of its hotel properties in Hawaii and London. Likewise, Lexus and Volvo allows customers to test drive their vehicles virtually.
One retailer that has fully embraced VR in a traditional store environment is North Face, which offers shoppers a number of in-store 3-D immersive experiences, including 360-degree virtual tours of Yosemite National Park and the Moab desert using Google Cardboard glasses. In North Face’s flagship stores, shoppers can sit in a sled, don Oculus Rift VR goggles, and be pulled by a pack of huskies through a breathtaking snow landscape.
Besides offering shoppers spas, theaters, cafes and other amenities, experiential retail technology is elevating the shopping experience by providing higher levels of service. Apple, though not a traditional retailer, has been the consummate leader in providing state-of-the-art in-store experiences through the intelligent use of mobile devices for scanning, checkout, ordering and payment.
Rebecca Minkoff’s stores in New York and Los Angeles take it one step further with touchscreen walls and fitting rooms outfitted with "magic mirrors" that enable shoppers to see different styles and colors of clothes, change mood lighting, and order free beverages. The stores also feature self-checkout systems that uses RFID chips and iPads to enable shoppers to pay without waiting in line.
Live streaming video is a hot medium, and this past year saw an explosion in the use of live video in retail throughout the world. The first wave of live streaming retail events included fashion shows by Gucci, Tory Burch and many more; live streaming makeup demos by L’Oreal; new car launches by Ferrari; and live streaming promotions by a slew of brands, including McDonald’s, Kohl’s and iHop.
However, live video doesn’t just drive customer engagement and awareness; it can also be a medium for transactions. For example, beauty brand Maybelline ran a live streaming campaign that drove 10,000 lipstick sales in under two hours. And whereas adding live video to a retail platform was complex and expensive in the past, cloud-based, real-time communications platforms like Agora.io allow retailers to add live streaming video with much greater ease and lower cost, making it easily accessible to retailers large and small.
Going forward, retailers will deploy an increasing number of promising new technologies that are maturing rapidly, including chatbots, the Internet of Things, machine learning, personalization engines, blockchain, and voice shopping applications. These new technologies are underpinning experiential formats that give retailers the opportunity to further reinvent and modernize their businesses.
Bart Mroz is the founder and CEO of SUMO Heavy, a digital commerce consulting and strategy firm.
Related story: How Experiential Retail is Disrupting an Industry
Bart Mroz is CEO at SUMO Heavy, a digital commerce strategy firm. The company builds, connects, expands and invests in growing online retailers. This group of experienced strategists, consultants, designers and developers works to build solid brands and to create effective online retail solutions. Bart is an expert in e-commerce, business consulting, and technology strategy.