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Omnichannel retail, the fusion of virtual and physical retail, is lauded as the key to success in our tech-heavy economy. This strategic blend has met its ultimate form in AR and VR. AR, or Augmented Reality, and VR, or Virtual Reality, use tech to superimpose a virtual world onto the user’s surroundings. Retailers from IKEA to Macy’s are adopting AR and VR platforms to create an all-new shopping experience that fuses the virtual and the physical. Imagine a virtual department store, accessible from your living room, or a phone app that lets you see what that new couch you’re considering looks like in your own living room. The possibilities are endless and thrilling.
Nonetheless, there are plenty of challenges with the growth in popularity of AR and VR. Many consumers are not fully comfortable or familiar with the technology, suggesting that accidents are inevitable. AR and VR, too, could easily become a short-lived gimmick or novelty if it’s employed carelessly. As with any new technology, retailers will have to move carefully and intentionally in order to reap the rewards―and avoid the pitfalls―of AR and VR. Here’s how to make your AR and VR integration seamless, effective, and relevant. Think New AR and VR allow for a radical departure from the limitations of traditional retail. Long dressing room lines, an unwelcome makeover, online purchases that don’t quite work in person--all can be resolved using the right AR technology. IKEA, for instance, has developed an in-store AR app that allows customers to preview furniture in their own home. For example, a shopper can know for sure if their bright red couch will clash with orange drapes, without the commitment of a purchase . Online clothing retailer ASOS is developing tech to let customers see how clothes will fit on their body, saving time and money on returns. Similarly, Sephoras across the country have debuted “magic mirrors” in-store that let customers see what a certain makeup will look like on them without the need for samples or makeup remover. The problem-solving possibilities are endless. When it comes to VR, the world of retail is expanding exponentially. As VR headsets become more common (there are expected to be 100 million headset users by 2022, according to the PYMNTS Virtual Reality in Retail Report), businesses are considering how they can create even more immersive shopping experiences. This is perhaps best used to communicate information in a radically experiential way. Take the partnership between London’s One Aldwych Hotel and Dalmore Whisky—by using a VR headset, any willing participant can enjoy a “VR whiskey cocktail”, an experience that transports the drinker straight to the distillery where the whiskey was aged. Imagine, then, a clothing store equipped with VR masks to whisk you away to Paris Fashion Week, or a candy store that takes you to Willy Wonka’s Chocolate Factory. The potential for radical new experiential retail is huge. But Not Too New The danger of AR and VR lies in the uncanny valley--meaning that the photo-realism achieved by computer generated imaging creates a disconnect as audiences find themselves asking, “why doesn’t it look more real?” While the potential is endless and often thrilling, it is easy for AR and VR to come across a little awkward for users, particularly when it comes to shopping experiences. Perhaps the best (or worst?) example of this was Alibaba’s 2016 debut of their Buy+ platform--a phone app-cum-VR experience where users can enter a virtual mall to buy products from stores like Costco, Macy’s, and Target. Users look at an item for a few seconds to “select” it, and then entera screen with a rotating product image and details. Another motion of the head and the product is added to your virtual cart, or even purchased using pre-saved shopping information. It sounds like a dream fusion between physical and brick-and-mortar retail--a mall wherever your phone goes--but the app was met with a relatively negative response. The “mall” was deemed too empty, too impersonal, and too hard to navigate-- lacking all the joy of brick-and-mortar shopping and the ease of online shopping. As retail expert Nikki Baird said, “why go to a clunky, lonely virtual store, when you can go to a smoothly functioning store (you don’t have to navigate a joystick and some buttons to pick up an item) that is vibrant and doesn’t feel like you’re the last human left after the apocalypse?” The key is to avoid using AR and VR as a gimmick, and think critically about how it can be used as a problem-solving tool or an exciting and easily-integrated attraction. Shoppers want something intuitive, easy, and interesting. AR and VR can be, and likely will be, essential in navigating the demands of an increasingly tech-based retail environment. Keeping it fresh without complicating a system that already works will be the trick to making retail current, and AR and VR are no exception. Today, technology isn’t limited to fun gadgets or specialized tools―it has become a part of our daily lives, used to control everything from our transportation to our cooking and in-home security systems. As tech expands, our homes are becoming smarter and more connected, enhanced by innovations that ease or improve domestic life. With the rise in smart home innovations has come an entirely new category of consumer electronics retailing: Smart and Connected Home devices and appliances. The US is leading the way when it comes to sales―with reports showing that the smart home market in the US bringing in close to $5 billion in 2018 alone―and has the potential to grow much further.
While selling smart home technology might seem like a breeze (who wouldn’t want a virtual assistant to change the thermostat and play your favorite music?), this new exciting product category also comes with many retail challenges. Analysts, such as McKinsey, found that many consumers still don’t understand connected device value propositions. Our own user-research uncovered that consumers were finding it hard to understand the range of choices, and had some skepticism of the benefits these new smart products could bring to their lives. After all, who wants to make life more complicated? Our recent work with introducing the Smart Home Category to PC Richard & Son stores gave us many insights which were relevant to retailers across the board. Here, we look at those insights, and share what we believe retailers need to know to come out on top: An opportunity to bring order to the chaos Smart home technology is a new product category, which means its definition remains relatively loose. Some consumers might think of smart home tech as being a central air unit―others, a virtual assistant device. Many consumers don’t even know what their options are, as new technologies are being put on the market every day. What retailers can do, then, is to bring order to the chaos. A simple way to do this is to have a clearly designated “smart home technology” section, which places the products within a home-like environment. The consumer is invited to imagine how the products will look within their own home. This environment also positions each product as a lifestyle solution, by presenting consumers with a big picture view of how all the different products could work together as an ecosystem ―which is the way smart products should work. Ultimately, this format demonstrates clearly what smart home technology can mean for consumers in their own homes, and helps encourage shoppers to interact with unfamiliar technology. Hierarchy of information Once the shopper is comfortable with the big picture, you then have the opportunity to provide the details they are looking for in order to make the final purchase. Small retail touches can work to deliver this detailed information at the right time, and at the right place. We used interactive digital screens to allow shoppers to learn more about product information including features, pricing specifications and customer reviews - all at the right time and place. Remember to diversify The home is personal, and so too is smart home technology. Consumers have varying needs and desires, and that is especially true when it comes to homewares. A Gen Z shopper designing their first home might want a smart thermostat for when they leave the patio door open and forget to turn off the A/C; a working parent might want a smart security device that can let them keep an eye on their home even when they’re at the office. People with limited mobility might want voice-activated lights or even doors to allow them to move more easily through their home. Diversity is the key in smart home solutions―know who your consumers are, what they want, and then curate a product selection that meets their needs. Smart home technology is on the rise, with an expected 1.3 billion devices to be in use by 2022. The key to getting in on the ground floor is to provide an inviting, easy-to-understand retail experience for shoppers that can expand and change as the technology grows. Hailed as the key to surviving the retail apocalypse, the approach to deliver experiential retail is being adopted by an increasing number of stores that want to draw in customers and get an edge over online shopping. The idea is that physical retail should provide an experience―a destination―customers will come to a store because there’s something there worth coming to. And so we’ve seen a boom in in-store tech, Instagrammable store layouts, and special events or activities for shoppers in-stores across the world.
But experiential retail isn’t as simple as throwing a hashtag on a wall and a VR headset on a counter. An effective experiential retail strategy considers the unique demands and desires of its target consumers. And since revamping stores doesn’t come cheap, the stakes are high in ensuring you’re moving in the right direction. Here’s what your experiential retail strategy needs in order to rise above the rest: A Consumer-Based Experience It goes without saying that experiential retail requires, well, an experience. Stores are bringing everything from indoor golf simulators to wine bars into stores in order to bring shoppers in and keep them coming back. But an experience doesn’t mean much if it’s not an experience consumers want. The best experiential retail and implementation of retail technology is oriented around problem-solving. Take Sephora’s “magic mirrors,” which use AR to show consumers what they’d look like using various products without actual makeup application―it saves the consumer the hassle of removing makeup, and saves the store the expense of tester merchandise which can’t be sold. This applies to special events and attractions, too. After all, what are in-store attractions if not problem-solving tools for boredom or retail delirium? Stores like Uniqlo and Aritzia have done this well, by bringing in in-store coffee shops to help customers recharge while shopping. Another key is keeping it local―what do consumers in one region need that they won’t need in another? Just as stores in California will stock more bathing suits than winter coats, your stores should base experience on local culture while maintaining brand consistency. Stores like Foot Locker’s “Power Store” and Nike Live are looking to local artists and culture when determining store design, while athletics stores like REI will feature sports lessons based on local geography. Experiential retail works best when that experience is relevant to the consumer as opposed to just a novelty. Thoughtful store design Brand-building happens just as much in-store as it does through advertising. Consumers will associate your brand with the kind of image it presents in physical shops., So, keeping your stores beautiful and comfortable, or fun and chic, is key in keeping consumers interested. That’s why more and more stores are featuring home-like fixtures, places to sit and rest, as well as beautiful interiors with soft lighting and thoughtful shelving. The idea is to make your space feel as comfortable, or even more comfortable, as staying home with a laptop―or making your space as beautiful as going to a museum. The best stores are focusing on a multi-sensory experience that goes beyond just visuals: stores like Anthropologie have been incorporating sensory branding into their store design for decades, featuring artful wooden fixtures, cozy textiles, and lit candles that you can buy in-store. And with the growth of the Instagram generation, it’s become even more essential to provide an in-store environment worth sharing. Balance between tech and the “human element” While in-store tech is great, it isn’t everything. Retail technology can solve a lot of problems that are becoming more and more prominent as online shopping gains popularity, but nothing can replace the human element in a personal shopping experience. Trained and attentive store clerks are essential for customers to feel cared for and comfortable while shopping. One of the main focuses of B8ta, a revolutionary tech marketplace, is to have trained and informative staff that can demonstrate how devices are used and assist customers in finding new products. But it’s not just about know-how: customers also want to feel like they have a connection with a brand, and friendly employees can be the perfect representative. Women’s clothing stores are a great place to look for this; in many stores, sales staff will encourage shoppers to try on clothes and give compliments and even suggestions for other outfits. The idea is for women to feel like they’re out shopping with a friend, or in their own closet at home. While tech is exciting and new, it’s important to remember what your store can provide in experience beyond a screen. Whether a big or small initiative―just get started! We often hear about stories of big initiatives in experiential retailing.For example,the flagship stores that are designed to only showcase and demo products, but don’t sell anything, the large scale layouts that host big events and more. You don’t need to always think big as long as youtkeep the ‘experience’ at the forefront in category management. For example, we recently used the creation of a pole topper for Reese’s as an opportunity to provide a memorable moment. We designed and manufactured a large scale ‘Reese’s Peanut Butter Cup’ bowl, while capturing the playful nature of the brand, which is reflected in the fun shoppers experience at the Point of Sale. With all the conversation about experiential retail, it can be tempting to revamp your entire store to feature floor-to-ceiling screens and an in-store wine bar. Unfortunately, though, a radical multi-store renovation plan isn’t particularly cost or time-effective for most businesses. Enter flash retail―a model based on small-scale, temporary physical retail spaces like pop-up shops, trucks, or stalls. Flash retail has seen a boom in recent years, as businesses look for innovative ways to approach the retail experience. From installations in mall, to small storefronts in big cities, to stores-in-stores, flash retail can take many forms and allow for all kinds of diverse retail experiences.
Here, we take a look at what you need to know in order to make your flash retail initiative work for you. Think about your audience The kind of flash retail model you choose should be based on the shopping habits of your target audience. A storefront in SoHo will speak to those with leisure time―people strolling by, looking for a unique experience. A store-in-store, like B8ta or STORY in Macy’s department stores, will capture the attention of people on a routine shopping trip who are excited to stumble upon something new. A storefront model makes sense for known brands, and many online-only retailers will start their physical retail initiative using pop-up shops.Fenty X Savage, Birchbox, and Kylie Cosmetics all developed pop-up shops in major cities to have a short-term physical retail space without a long-term commitment. Meanwhile, store-in-store models work well with small businesses looking to get their name out, like West Elm’s store-in-store initiative “West Elm Local”, in which local businesses can display their products in-store on weekends. Think about which model will speak best to your target audience and run with it. Curate products Flash retail means limited space and mobility, so have a thoughtful plan about which products you’ll feature. Obviously think about featuring best-sellers, but also consider the structure of flash-retail. It’s about an impulse buy, not a convenience purchase. While flash retail is, of course, an opportunity to sell products, it’s more about building brand recognition than it is about revenues. Fun, flashy products that will bring people off the street and into your store is the key to an effective flash retail strategy. Be experiential Don’t neglect experience in your pop-up shop. Flash retail is all about experience, but it’s not enough to just exist as a short-term but otherwise typical store. Flash retail is the opportunity to try out retail technology and in-store entertainment that is otherwise too expensive or risky to make a long-term store plan. Think about how to feature your products in a new and innovative way. Dolby’s SoHo pop-up featured movie-themed rooms that displayed Dolby’s sound systems in a totally-immersive environment. STORY, meanwhile, has a store-in-store style that changes every few months, keeping customers invested in the store and its displays. ―our pop-up shop doesn’t have to be static. The beauty of flash retail is its mobility and flexibility, so take advantage. Recent years have seen a boom in service-based technology. Apps and websites like Uber, Taskrabbit, and Grubhub have taken over the market as time- and effort -saving tools for the modern consumer. Naturally, the advent of service-based tech has brought new challenges for traditional retailers―--and food and beverage retailers have been hit particularly hard. A proliferation of delivery-based apps and online grocery services have meant a radical new retail landscape for restaurants and grocery stores alike. Consumer expectations for food and beverage retailers are shifting towards an increasingly powerful duality between uber-convenience on the one hand, and hyper-experiential on the other.
Here, we take a look at some key areas that consumers expect when it comes to F&B retailing, and how retailers are meeting these demands. First, let’s talk about convenience As consumers become accustomed to the ease of online or app-based food shopping, grocery stores and quick-service restaurants will have to adjust to an increased demand for quick-and-easy food service solutions. This means an emphasis on prepared foods and meal kits―--take the “grocerant” trend―--as well as a focus on food delivery and pick-up sites. Whole Foods, for instance, has debuted a locker-based order pick-up system which includes, with refrigerated food lockers located near store entrances― so customers can order online and pick up in-store without having to navigate aisles or crowds. Restaurants, too, are beginning to focus on providing intuitive pick-up locations for online orders to ease customer transactions. Convenience also means a streamlined store design with clear signage and informed staff. Trader Joe’s staff are encouraged to chat with customers about their products and provide suggestions based on consumer preferences. And, even at fast casual restaurants, servers are expected to be equipped with information about food preparation and source. In order to compete with online food services, grocery stores and restaurants alike will have to provide a comprehensive and intuitive shopping experience. A Focus on Fun What the online grocer can’t provide, though, is a personal, pleasurable, and fun dining or shopping experience. While grocery stores and restaurants should keep things streamlined and efficient, they certainly shouldn’t neglect the experience-based shopping experience that brings customers off their couch and into stores. This is, again, where the grocerant trend comes in―--more and more grocery stores are emphasizing a pleasant and even chic in-store dining experience for shoppers who want to grab a meal before picking up groceries, or even as a stand-alone as an independent dining experience. Some grocery stores have begun incorporating high-end coffee and even wine bars into stores to make for an enjoyable and unique shopping experience. Meanwhile, restaurants need to focus on a pleasurable and engaging dining experience. More and more restaurants are providing a unique dining experience, from innovative plating, to more engaging and personable waitstaff. Even quick-service restaurants are featuring pleasant store design, including hip fixtures and art installations in order to appeal to the demands of the Instagram generation. Special events, too, can bring customers in, for everything from wine tastings to pasta-making lessons. Keeping it fresh and interesting will require providing what online services can’t―--a fun, personable dining experience. The food and beverage retail landscape is changing rapidly. In order to keep up, retailers will have to think hard about what they can provide to keep customers interested. Both radical innovation and simple solutions will be key to moving forward with intuitive, quick, and fun food and beverage retail experiences. Perhaps the longest hold-out of the move from in-store to online retail has been in the consumer electronics sector. For the last decade, Best Buy has held out as the top consumer electronics retailer, despite a concurrent push towards online retail in most other retail categories. Signs would indicate that when it comes to consumer electronics, consumers still prefer an opportunity to see, test, and learn about products in person rather than wholly relying on online guides and reviews.
That is, until this year. Dealerscope’s Top 101 Consumer Electronics Retailers Report of 2018 found that online retail giant Amazon has officially beaten out Best Buy for the top spot in consumer electronics retail. And it’s been a long time coming--while Best Buy has held out in total sales, Amazon has seen significant growth in the last decade— while Best Buy’s growth remained relatively minimal. The convenience of online retail, as well as its increasing ubiquitousness, has meant a defeat for Best Buy and a victory for digitally native consumer electronics retailers. What does this mean for brick-and-mortar stores? It could be a wakeup call. While there’s been a clear shift in preference for consumers in the last few years from physical to online retai, there’s been a marked increase in physical consumer electronics retailers--over ninety thousand stores operated by retailers according to Dealerscope’s list. Even the brick-and-mortar stalwarts are starting to fall to the digital era. What can stores learn to keep current in Amazon’s wake? Explore New Category Solutions and Formats Innovative consumer electronics retailers like b8ta and Soda Says are popping up across the country to fill a gap in consumer electronics retail. As Soda Says CEO Grace Gould stated, “you have these brands--Apple stores, Microsoft stores, Samsung stores--that sell a very limited number of products. And then you have big-box retailers like Best Buy. No one is doing an interesting lifestyle business within consumer electronics.” By bringing a carefully curated product range to the floor and filling their stores and outposts with color and design detail, b8ta and Soda Says are providing an all-new consumer electronics experience that bucks the stuffy big-box stores and the impersonal online shop. B8ta has also brought it’s successful format to bigger department stores, with a shop-in-shop in Macy’s. It allows people to explore products they may not have found online, try them in-person, and be hand held through the experience by an informed, friendly sales associate. Formats like these can elevate the in-store experience and create a compelling reason to visit a store. Consider New Store Design Solutions It’s helpful for consumers to experience how the product will fit into their lifestyle or home environment. For example, consider the complex product category of ‘Smart Home’. Browsing products sitting on a shelf, consumers may find it difficult to navigate the complex choices and even more difficult to understand how they all work together. To solve this challenge, we recently created a ‘store-in-store’ experience for the Smart Home Category for PC Richard & Son,which placed products within a home-like environment within the store. This allows customers to imagine how each product would fit in their home environment. This context let them become more familiar with this complex category. The result? A doubling of saless. Another example is the Sonos store in Soho, New York, which provides different lounge-room environments for customers to explore the Sonos sound system. Each booth features comfortable couches, or an office-like desk and chair, to allow the consumer to go on a journey to experience how the Sonos system could work if installed in their own home. Using sound, light, space and carefully thought out design and display fixtures, you can create an environment that communicates so much more than just the benefits in a bulleted list or detailed illustration on a website. Provide Omnichannel experiences What makes online shopping so compelling? The ability to shop for the best price, read hundreds of reviews, study comparison charts, and then have the product delivered to your doorstep, all while sitting on your couch in your pajamas. These are all factors that can be brought into the in-store experience (minus the pajamas!). Here is where retail technology such as interactive digital displays, and AR and VR have a role. Consider replacing status pricing signage with digital options that can provide real-time price updates. These same digital displays could also allow customers to read through product reviews and comparison tables. If the customer wants the option of home delivery for bulky items, a store associate could arrange this at checkout. Worried about the checkout queue on a busy day? If each store associate is equipped with a tablet, they are easily able to check customers out throughout the store. Item not in stock? Customer’s should be able to order it for home delivery in-store. New technologies such as AR and VR can also provide opportunities to help by making the shopper’s life easier within the store. For example, using AR, Topshop used motion sensing technology to create a virtual fitting room for customers in their Moscow store. By standing in front of the camera, customers could see how the item looked on their body without having to line up and wait to try things on. In our design process, we often ask the question ‘“How can we bring this online benefit into the store” rather than seeing online retail as a separate channel with separate features. While retail channels (online, retail, mobile) are often managed separately, we prefer to think of the brand wholistically--and design to meet the customer where they are. They may start researching online (and statistics say they often do), but then visit a store to complete their purchase. And so we often ask the question “How can we help bridge the gap between the in-store and online experience? How can we meet the customer where they are or want to be?” While no physical store can compete with the endless product options of the internet, it’s important to provide as many services as possible to remain competitive as consumer expectations change. Retail norms are changing--stores have to change with them, or get left behind. Provide What Online Can’t While it’s important to meet the expectations as set by online retail, the in-store experience is filled with opportunities to exceed them and delight and surprise customers. One of the strengths of physical retail is the ability to make an event out of a shopping trip —- turn the store into a destination. How can you do this? You can borrow from other brands who are leading in experiential retailing. Nike, for example, has a full size basketball court for consumers to experience their shoes on the court. They also run live events, and offer product customization on-site in the store. Sales associates are athletes themselves, and always speak from experience. If you’re not already doing this, expand your product release strategy to include in-store only exclusive events. Organize special interest parties, or demonstration days. Anything that will work to bring customers off the couch and into the store. Make it a destination— - keep it relevant and interesting. A final word. At In-Store Experience, we have a motto— - “Retail is not dying— - boring retail is!” Keeping things fresh, relevant, and staying on top of the latest trends gives us insight into what consumers expect. While the Amazons of the world are growing— - nothing can replace the power of the in-store experience. |
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