COVID-19 has fast tracked the adoption of emerging technologies in retail spaces, blurring the lines between traditional brick-and-mortar experiences and digital commerce. Where only a year ago we saw roughly 16 percent total penetration for e-commerce across sectors, we’ve now eclipsed 30 percent penetration, with certain categories meaningfully higher. This level of penetration represents a three-year to five-year jump ahead of our expectations. In this rapidly shifting market, retailers are searching for ways to stay competitive.
New Technology Blurs Retail Lines
Over the past decade, emerging technologies have helped to meld online and digital shopping. Both augmented reality (AR) and virtual reality (VR) have been in use across segments, with much more integration of these technologies expected.
In some cases, AR and VR are adding substantially to the shopping experience. One example of this is Warby Parker, the disruptive direct-to-consumer provider of prescription eyeglasses. The company had rapid success, then opened storefronts to complement its brand’s offering and image. Now, Warby Parker’s app allows customers to try on glasses from home via AR, making the shopping experience easier. This capability is particularly relevant now, as people in many locations are required to wear masks in-store. With a mask on, it’s even harder to select a flattering pair of glasses. The enhanced technology is a lifesaver for both Warby Parker and its customers.
Similarly, furniture outlets are giving shoppers the ability to imagine a chair or dining room table in their home or apartment. Cosmetics chains can have customers safely try on lipstick using their phones. Shoe stores can offer a broad mix of colors to help customers find the perfect look with their favorite jeans.
Some retail segments have seen dramatic growth in their online penetration. Grocery has been one of these, almost doubling penetration to 10 percent in the past few months from roughly 5 percent last year. Because of this increase, grocers have had to better train staff on how to pick ripe avocados and unbruised bananas. The change will also shape how physical space is used. With increased online sales, stores will need larger spaces to accommodate storage, packing and automated CPG basket creators.
How Can Retailers Adapt and Lead?
To capture today’s shoppers, retailers must be sure their website and mobile app are appealing and user-friendly. To do so effectively, they must think critically about how they reach their customers. Does a shopper prefer to try things on in a dressing room or would she rather try on an outfit digitally? This influences both store and online shopping cart design.
A digital store isn’t a recreation of brick-and-mortar (and vice versa), and they work best when they flow seamlessly into each other. For example, if a customer chooses to click and collect, their mobile receipt should have a QR code to scan in-store for validation.
Not even a pandemic stopped shoppers from returning to stores — brick-and-mortar will continue to exist and even grow in some cases. However, it will look different, and shoppers will come with new and more imaginative expectations and nontraditional shopping lists.
Retailers should prepare their digital platforms and understand that getting ahead now means investing in the best of the change to come, including powerful AR and VR capabilities.
Chris Butler is the president of Advantage Digital Commerce, a group that provides an essential set of services and solutions for finding growth opportunities and uncovering efficiencies in today's complex, multiplatform marketplace.