The future of our high streets will increasingly depend on how retailers keep up with fast-evolving public expectations about in-store technologies.
Despite the rapid expansion of online retail, physical stores have a significant part to play in many aspects of the customer journey. Research conducted by Vista found that 81 per cent of UK consumers see the physical store as vital to the shopping experience and 70 per cent say they enjoy the full experience of going into stores to browse, find out what is new and buy what they like at their leisure.
Yet this may not continue unless retailers wake up to vital role of advanced in-store technology, as all the indications are that it will be essential to success in bricks-and-mortar.
Consumers are already familiar with technologies such as artificial intelligence (AI), augmented and virtual reality (AR and VR). They encounter AI in chatbots and voice-activation technologies such as Amazon Echo or Microsoft Cortana and millions use Siri on their iPhones or iPads.
Even if consumers cannot identify these technologies by name, the expectation is growing that AI, VR and AR will assist them when they enter a store.
The problem for shoppers is that while 70 per cent are familiar with AI applications, for instance, two thirds (66 per cent) say they have yet to encounter the technology in a store. This is where UK retail is missing out because all the evidence is that such technologies boost sales.
This growing consumer awareness of the technological possibilities is pushing change on high street retailers whether they like it or not. Vista’s research found that more than two-thirds (67 per cent) of consumers believe that retailers should make these technologies a priority.
We know that voice commerce in retail is only going to grow. In the US, eight million of Amazon’s voice-activated Echo devices were bought in 2016 and 60 million people there already use virtual assistants at least once a month. In the UK, although adoption has been slower, 37 per cent of smartphone owners use voice-led technology of some kind every month, with nearly one-in-five buying a product through voice without looking online first.
Voice commerce is already increasing consumer spending, not just at home, but as shoppers are on the move, using smartphones or the in-built connectivity in cars. As its use expands, it will rapidly become an interactive channel covering purchase, payment, loyalty, service-functions and order-tracking and if implemented correctly, will certainly boost revenues.
We know that the connected car enables consumers to order items in advance, whether it is drink, food or a new tyre. But with AI it is possible for a bricks-and-mortar retailer to make recommendations to customers, based on proximity and preferences. This anticipation of their requirements in a direct, relevant but non-intrusive way, is what consumers will soon expect.
AI gives consumers so much in store
In a store, AI voice-activation offers significant advantages. Staff can, for example, immediately obtain accurate information about products and services via a headset, saving customers time and hassle. Hassle is after all, what makes so many consumers walk out of a store and go online. Eliminating the irritations is crucial to bottom line success in physical retail now.
The research also found AI-powered kiosks to be popular, with six-out-of-ten consumers attracted to the idea of using them to discover products available from the retailer that they were not previously aware of. This desire to seek out information autonomously may well arise from the irritation that consumers feel about “pushy assistants”. The research found that two-thirds of respondents admitted they stopped browsing in store because store staff were too insistent.
Annoyances in a store can come in many forms, but one of the most commonly cited must be queuing to pay. AI-based virtual assistants can already alleviate the source of this gripe, enabling consumers to complete a transaction quickly from anywhere in the store through a smartphone, although their implementation is in the early stages. The future of payments is a huge topic, but we can say with confidence that AI-powered payment solutions will be very attractive to younger consumers who do not share their parents’ stoicism about queuing.
AR and VR already have much to offer
The picture of increasing enthusiasm for in-store tech among consumers of working age is similar with VR and AR. VR headsets, which create an incredibly immediate but entirely artificial 3D environment, are increasingly part of the infrastructure of gaming, as anyone who enjoyed a game such as Resident Evil 7: Biohazard, will know.
Yet for the moment, VR in retail tends to be restricted to providing spectacular promotional experiences, such as test-driving a car in dramatic landscapes. AR, on the other hand, which combines reality with the artificial images generated by the software, or voice recommendations for purchases based on the user’s digital profile and social footprint, has more direct impact on helping shoppers make exactly the right purchase.
An augmented reality (AR) app downloaded to a smartphone opens up all the possibilities of a major purchase to a consumer. A big TV system or new three-piece-suite can be overlaid on to the shopper’s own living room so they can see how it looks. Similarly, shoppers can see how they look in a new suit, hat or hair colour as the technology superimposes images with great precision, enabling customers to move quickly between different styles, sizes or colour tones. The preferences and choices can be retained to save time and increase customer-recognition and personalisation whether the consumer is shopping online or in the store.
Even if customers do not want to download apps, they can use smart mirrors for the same effect. In cosmetics, smaller smart mirrors allow shoppers to try out alternatives and act on recommendations without having to use the products – which is an obvious advantage.
When shoppers employ these AR applications, the majority react very positively. In Vista’s research, exactly three-quarters of the shoppers who had used AR in a store could see its value and said they felt encouraged to use the technology again. And expectations are growing. More than half (56 per cent) of those who had yet to use the technology were enthusiastic about it and thought it ought to be a priority for bricks-and-mortar retailers.
Retailers need to be bold to survive
The danger for the UK high street is that retailers will be too slow in implementing the new technologies that consumers are so positive about. Shoppers know that technologies they are using at home or on their smartphones will make shopping so much easier, eradicating irritations and anticipating demand.
While investing in these technologies is costly and has hidden pitfalls, retailers need to begin implementing them quickly if they want to succeed. They need be as excited about AI, VR and AR as their customers and much bolder in deploying applications of these technologies to meet new expectations.
James Pepper, Technical Services Director, Vista Retail Support
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