The (R)Evolution of In-Store Events
From personalized coupons to self-checkout to mobile wallets, there's no denying that technology is changing the way consumers shop. To date, however, the adoption and buildup of technology amongst grocery, general merchandise and other traditionally "lower tech" sectors has been somewhat slow. And in many cases, the use of services offered by such retailers has been limited to the more progressive consumer base who actively seek out such offerings.
That's all about to change …
Retail is going through one of the biggest transformations in the history of the industry. While our basic needs as consumers haven't changed, what has changed is technology and the way retailers interact with it. Technology will soon revolutionize the in-store experience and fundamentally change the way consumers shop.
Staying Ahead of the Competition
To meet the demands of consumers, retailers are going to have to embrace technology at a much faster pace than they have in the past.
As of right now, many in the retail industry are dealing with older IT infrastructure and legacy platforms, which makes implementing these new technologies a long, painstaking process. That's why many of them are slower to adopt some of the more cutting-edge ideas out there. Eventually, retail will adapt to build systems from the ground up, which will be the faster, more efficient way to get these new technologies out into the mainstream.
The top trends that are going to be key drivers of technology for retailers include the following:
- Behind-the-scenes optimization: By using software as a service (SaaS) or centrally hosting software and data on the cloud, retailers can deliver new services to consumers and optimize store operations and supply chains. Though SaaS is in use to some degree already, it's going to grow at a faster rate than ever before.
- Innovate. Implement. Repeat. Rapid and sustainable innovation in technology will come from retailers and vendors, big and small. Technology innovation will also come from crowdsourcing via consumers, allowing consumers to dictate, and in some cases even help implement, the services they want.
- Appearance matters: Stores of the future will be smaller and more about delivering an experience than housing product. Industry titans such as Apple and AT&T are already making this a reality. AT&T's flagship store in Chicago is a case in point. AT&T uses state-of-the-art technology — e.g., sound effects, motion sensor displays, mobile point-of-sale system — to create a unique experience for consumers. Retailers will have to adopt new technologies that transform operations from the traditional supply chain model to sourcing directly from suppliers to deliver to consumers wherever they are.
- Shift in control: Mainstream adoption of technologies that provide a better shopping experience will include things like machine learning, m-commerce and augmented reality. The whole idea is that technology will cater to the customer based on who they are and where they are. What's driving this is that the power in the marketplace is shifting from retailers to shoppers. To remain competitive, retailers will have to learn to cater to that control. Virtual mirrors take the in-store experience to a new dimension, enabling consumers to try on clothes without going into a dressing room.
Who's Adopting the Technology?
It will depend on the retailer and their sophistication with technology. In general terms, SaaS and m-commerce will to continue to gain momentum and eventually become the norm in retail. In addition, there will be a change in the definition of m-commerce as it becomes anywhere commerce through mobile. Currently m-commerce is still primarily online shopping via mobile, while most of in-store shopping or purchasing is done through physical transactions. In the future, these lines blur as both in-store and online shopping transactions are completed via mobile devices.
Augmented reality, on the other hand, will see slower adoption. It will likely be limited to marketing efforts and selected consumer engagement with new products.
Combining the Human Element
The world of retail is changing and retailers will have to implement new technologies in order to stay in the game. While new innovations like augmented reality and virtual mirrors make the consumer experience even more engaging, one thing is clear: technologies aren't going to replace the human element of in-store events. Human interactions are still part of basic nature and a primary driver for people to walk inside the store. Instead, these technologies will enhance the work that in-store marketers do.
Abhi Beniwal is the senior vice president of global information technology for Interactions, a provider of natural conversational automated systems.