Building a better Brick-and-Mortar with the Billion-dollar Web
There's a tendency in the retail world to describe a successful store as "having good bones." What they're really saying is that despite a dated layout, poor lighting, and inconveniently situated furniture, the store just works. It's still a destination for shoppers because it has something that their competitors don't. But what if these stores could update their look to reflect today's shopper more effectively?
In this post we'll explore how e-commerce retailers can use design to build better in-person experiences for its customers. We'll be talking about innovations in retail tech like Amazon Dash and Google Home, trends like showrooming and experiential marketing, as well as trends from other industries like virtual reality shopping.
The design of retail spaces has many effects beyond just "good bones." It can influence the sales of merchandise on shelves, how customers get to the store, and how satisfied they are with their shopping experience. In this post we're going to look at how a combination of virtual reality and artificial intelligence could create more exciting and compelling in-person shopping experiences.
Before we get into it though, I should point out that high-tech store redesigns are not just something brands do because they have lots of cash. There's a lot of incentive in the form of increased sales and lowered costs for retailers that choose a path like this.
We'll start by talking about how in-person retail is changing and how companies are trying to take advantage of it. We'll then look at the technology that's already on the market that companies could use to enhance their stores with new features they've had trouble implementing elsewhere. From there we'll turn our eyes towards VR and AI retail systems that are currently under development.
Rethinking Retail Spaces: Trends, Innovation, and Experimentation
In their book Power of Place, author Edward Castronova and journalist Maggie Mason look at how merchants can use location in urban settings like malls to influence consumer behavior. According to their research, "the growth of the Internet and home delivery companies has made consumers more sensitive than ever to the inconvenience and time-cost of getting to a store." This means that physical stores are increasingly competing with virtual ones.
But how can physical stores make themselves worth the effort for shoppers? Some answers might be found in recent trends in the industry.
First, there's showrooming . Showrooming is when a customer goes into a physical store to look at an item and then buys it online through another channel like Amazon or eBay for less money. Showrooming is often used as an example of the ways that online retailers have established themselves as alternatives to brick-and-mortar stores. But it's also part of the narrative of retail space, because it demonstrates how consumers are ready and willing to spend time in physical locations even if it isn't necessary.
Second, there's experiential marketing . Experiential marketing takes a page from consumer behavior research and combines it with retail spaces. In particular, experiential marketing uses in-person experiences like window displays and food tastings to increase sales . The logic is that if a consumer gets an extra-special experience at a retailer they are more likely to buy something while they're there.
Last, there's innovation in retail tech like the Amazon Dash Button. These tiny devices can be attached to anything that a company might want to sell and use WiFi connection to order it with the press of a button. The idea is that consumers could use them around their house instead of going down to buy detergent every week. There are many ways in which companies could use this new technology , but one recent development was Staples' sale of the first dedicated WiFi-enabled Dash Buttons.
But even if designers are finding new ways to sell stuff, they still need to make sure their stores look good. If you walk into a poorly-lit mall or an outdated-looking retail center, you'll probably leave without buying anything.
Shoppers today want stores that aren't just functional but also desirable and stimulating. This is why retailers have been experimenting with virtual reality and artificial intelligence for a while now . There are more than half a million movie theaters in the U.S., which can be used as spaces for VR experiences . Other retailers like Amazon have also been creating virtual shopping experiences in popular TV shows like "Black Mirror.
Customers do still want a physical store experience when shopping, but they want it with the convenience of online shopping. So it's important that stores reflect this by creating a better physical atmosphere than their competitors.
Making Stores Work Better Via Tech
To create better in-person experiences, retailers need to use technology in combination with other methods. It's possible that by incorporating tech into existing retail spaces they'll be able to create more engaging experiences and drive sales. But before we get too far into this topic, let's discuss the latest technology on the market that companies could use to make their stores more compelling for customers.
First off, Amazon Dash buttons are a new system for ordering products from your refrigerator . The buttons are controlled through the Amazon website and they can be used to order home products, like laundry detergent or paper towels. Amazon calls this "Just Press Dash", and they're adding as many as 50 new products every week to the service.
Dash buttons are an example of something that's more commonly used in other industries like Instacart, which uses a similar system to allow consumers to "order online for delivery." Saks Fifth Avenue is another company that uses Dash Buttons but with a much wider scope. They've included 42 in-store items so far, including furniture, jewelry, and designer handbags .
This type of technology allows retailers to offer customers products on impulse. It also helps stores save money on inventory and build loyalty. For example, Saks Fifth Avenue can sell more expensive items because customers don't have to go to a store to pick them up.
Retailers can also use AI for other purposes besides saving money. Pantelligent is an AI platform that uses sensors in retail environments like the ones we saw with Amazon Dash Buttons to identify pant sizes . This technology could be used by stores like Saks Fifth Avenue, who used it to help consumers find the right size of clothing and then indicate whether they would purchase it.
The functionality may not sound revolutionary, but Pantelligent is becoming one of the most used AI tools in retail. It's currently used for nearly 8% of U.S. restaurants, including Starbucks and McDonald's .
The Future Of Stores And Shopping
If we're working with a narrative of technology-based innovation, it's easy to see how design will play a bigger role in retail stores than ever before. Retailers will use technology to better understand customer preferences and create more engaging shopping experiences through more sensory-based virtual reality applications and more interactive tech.
But if we delve deeper into the topic, we can look at how the narratives of urban design, experiential marketing, and showrooming might influence how retailers will change their physical spaces in the future.
Conclusion: How Technology Is Changing Retail Stores
We've looked at how retail technology is changing the way we shop. As more people order products on their phones, stores are starting to incorporate virtual reality into shopping experiences and AI into physical spaces. Technology will continue to be a part of our lives, but it won't necessarily just be on smartphones and computers in our homes; it will also show up in the form of digital marketing and "smart" stores.
References:
https://www.forbes.com/sites/nishithdesai/2017/04/27/the-top-retailers-with-digital-strategy/#4d57f471c4d9 http://www.