As featured in TWICE on February 5, 2018.
As 2017 drew to a close, headlines blared phrases like “retail Apocalypse” and “tsunami of store closings” that painted a dire picture for the future of retail.
According to commercial real estate firm Cushman & Wakefield, more than 12,000 stores are expected to close this year (up from around 9,000 in 2017). There’s no doubt that the retail industry will undergo major changes, but that does not mean retail is dying. Rather, the retailers that survive this turbulent transition will be those that embrace cutting-edge technology and transform the in-store experience for their customers.
In 2018, these six retail technology trends will reshape the way people shop and drive retail as we know it into a new era.
Voice Interface: “Alexa,” “Hey Siri” and “OK Google” have become a natural extension of our interaction with smart devices around the home. While these voice-based interfaces have slowly and steadily gained ground, their utilization in broader commercial interactions is still limited. We are expecting to see that change dramatically.
In 2018, expect large retailers to adopt non-touch human interaction interfaces that combine voice, gesture and presumed intent. Not only will shoppers rely more and more on voice-based and alternative-human interaction interfaces as they navigate their shopping journey, but retailers will leverage such interfaces to provide a new layer of services while collecting verbal and nonverbal cues of shoppers’ behavior.
Voice as an alternative to smartphone-based interfaces will find wider adoption in retail, ranging from simply providing more information about products, inventory and pricing while in-store, to more complex use cases such as self-checkout, voice ID, behavioral recognition and natural conversational commerce. Overall, the goal for retailers will be to offer a new form of personalized shopping while reducing operating costs.
Cryptocurrencies and Blockchain: The rapid rise of cryptocurrencies such as Bitcoin has created a market worth hundreds of billions of dollars. At the moment, crypto and blockchain remain in the realm of investment and tradable assets, but before long, it will be a viable currency for retail commerce. In fact, a handful of major online retailers such as Overstock.com, already accept bitcoin and other cryptocurrencies as a payment vehicle.
The underlying technology of bitcoin — the blockchain — is basically a decentralized database that logs all the transactions that take place on it. It’s highly secure, allows for anonymity and eliminates the need to depend on regular financial institutions.
The value of blockchain and private cryptocurrencies can be extended to retail for loyalty and rewards as a starter, but fairly soon it could also serve as an alternative to private-label credit cards and similar programs. The retail-branded currency is tied to the overall success of the program and the retailer creates a new level of brand loyalty and participation. It’s almost akin to owning a share in the retailer’s success through loyalty and promotion of the retailer brand, taking multi-factor loyalty to a whole new level.
Virtual Aisles: Physical retail traditionally takes up a lot of space, which is expensive. With real estate costs rising, retailers will increasingly embrace augmented reality (AR) as a way to create virtual aisles. They can showcase a selection of actual products in the store, while leveraging their mobile device to display accessories and related items. This means retailers don’t need to put every available product out on shelves, optimizing store space for the most important SKUs and streamlining inventory.
On the shopper end, virtual aisles allow users to see related products by pointing their device at items of interest in actual aisles. They can then play around with how various goods go together. Consider the prospect of enhanced fitting rooms, where shoppers have the opportunity to overlay virtual images onto their reflection in a mirror, mixing in-store apparel with online items that are also being offered.
The ‘Gamification’ of Store Experience: In 2018, more retailers will experiment with “gamifying” the store experience. Such practices as customized pricing that changes several times a day; dynamic product bundling; treasure hunts; and inter-shopper competitions of various types increase participation from shoppers. Through gamification, shoppers can earn user loyalty points or discounts as they navigate through the store. These methods can be used to direct shoppers within the store to sections of lesser traffic and slower moving merchandise, or areas of interest based on their profiles, thereby improving shopping cart size. Most importantly, the goal is to keep bringing the shoppers back to the stores or further engage with them on other channels.
Augmented Commerce: Moving forward, augmented commerce will play an important role in the retail ecosystem by allowing users to point their phones at items they want and access personalized pricing, personalized offers and mobile self-checkout. With this technology, the mobile device essentially acts as a concierge through the shopping journey, while also ensuring the actual purchase is completed on the device, thereby eliminating the need to go through a checkout aisle.
Social Payments: Today’s shoppers want seamless payment experiences, whether that’s paying back a friend with a few taps on a smartphone or avoiding a checkout line by paying via mobile. Beyond convenience, retailers are increasingly exploring social platforms, as people already spend a substantial portion of their device time on them and make purchasing decisions based on peer feedback — which quickly translates to social platforms becoming payment vehicles for users.
A great example is China’s WeChat, which combines official retailer accounts that act as user interaction points and brand extensions, and also includes a full suite of payment services through WeChat Pay. It is expected that social platforms in the rest of the world will try to emulate such functions and open up a new form of engagement for brands and retailers.
The lines between “online” and “off-line” commerce can no longer be clearly drawn. Most transactions today involve a blend of both realms, whether it’s a consumer doing online research before buying in-store or using a mobile device to avoid a checkout line.
Faced with strong market pressure, the retailers in 2018 that thrive will be those that embrace innovative new technologies and create in-store shopping experiences that are efficient and enjoyable for consumers, combining the best of online shopping with the best of brick-and-mortar in one cohesive journey.
Amitaabh Malhotra is the chief marketing officer of Omnyway, an integrated platform for payments, loyalty rewards and offers that encourages consumers to use their mobile phones for all aspects of the buying journey.