The Future of Retail: Consumer Immersion

June 15, 2015 The Architech Team

"You’ve got to change to survive." Sink or swim. The future belongs to the adaptable. These aren’t just the fundamentals of natural selection; if you’re a retailer, it’s a safe bet that you navigate this Darwinian ecosystem every day. In fact, it’s hard to think of an industry where disruptive change has such a profound influence, making princes of so many new players and paupers of many, many more.

But these lessons come hard and fast, and sometimes the most obvious ones get lost in the evolutionary shuffle. That’s why a lot of bricks and mortar businesses (and even a few e-commerce ones, too) are still casting about for new solutions to an age-old problem: How do I take a customer from intent to purchase?

Tesla Motors, Tesco, eBay

Herding Goldfish

The trouble with consumers is that we’re fundamentally hard to nail down. We’ve always been this way, but especially now in the Smartphone Era: with our non-stop, 24/7 connections to our technologies we’ve become like goldfish, a creature whose attention span reportedly hovers around the three-second mark. No sooner do we decide on a certain course of action when – bang! – off we go on another tangent faster than you can say “squirrel!”

Online retailers know this better than most thanks to abandonment data. Numbers collected by the Baymard Institute pegs the e-shopping cart abandonment rate at an average of 68%, which Business Insider’s Cooper Smith suggests will be worth about $4 trillion in merchandise this year alone.

Bricks and mortar retailers must also contend with our easily distracted nature, but for them, the challenge is different. Busy malls, screaming kids, short lunch breaks – just because you’ve managed to get a shopper through your doors is no guarantee they’re going to buy.

Go Get ‘em…

One of the answers to this distraction dilemma is to show up where the customer already is, instead of waiting for them to come through your door; a veritable form of consumer immersion. Tesla Motors uses this strategy to compete with traditional automotive brands by abandoning the standalone dealership in favour of a mall-based boutique.  Knowing that it can be difficult to bring a consumer to a dealership, they’ve brought the dealership to the consumer.

In South Korea, grocery giant Tesco has taken this concept even further, setting up shop in subways, where commuters can order their groceries from a virtual wall.

Recently, eBay – normally a company that relies on pixels, not real people – tried something bold: They created a “fair-re-tail” in the form of a Cinderella pantomime at Charing Cross Theatre, London. Spectators were treated to a tablet-enhanced performance during which they were encouraged by a Fairy Godmother to add items from the show to their wishlists.  Who says shopping can’t be entertainment?

Add Some Sizzle

Speaking of entertainment, the retail location is ripe for some serious upgrading. With the judicious use of interactive technologies, shoppers can morph from “just looking” into “just amazed!" Some stores are beginning to install large-size 4K video displays as part of their overall merchandising strategy. Recently, sports retailer LDN19 tried this approach when it launched a massive virtual reality experience in their London-based flagship store. Their setup melds 4K displays with interactive touch podiums and “digital mannequins.”  The effect, according to its creators, is like “walking into a website.”

Jonathan Berlin, CEO of Iconeme, a retail technology company, thinks this strategy could save traditional retail from a slow death. “There may well be a resurgence in the strength of bricks and mortar stores,” Berlin says, “on the basis that the customer experience will increase and the ‘fun’ of shopping will come back or, in fact, exceed past experiences.” At least until customers tire of this particular experience and seek out the next dopamine hit.

Stopping Showrooming In Its Tracks

Lest you think that this is purely an investment designed to turn stores into retail Disneylands, there are tangible revenue benefits to be had.

Showrooming is a trend that’s caused consternation in the retail world for several years as shoppers wander into stores to touch and feel, but then turn to the web to buy – sometimes right there and then, using their phones.  So how can a retailer, with its heavy overhead costs, compete on price with online-only?

One way is to decrease in-store inventory and increase the number of products available to be checked out in real life. Ron Prier, owner of RPAV, a consultancy and integration company in Bowersville, Georgia, helps retailers install systems that enable this new model.  Because shoppers use touchscreens already set up onsite to order these products online, “you end up with a much smaller store that’s much more efficient,” Prier says.

Berlin agrees, noting that, “The coupling of technology and visual merchandising will create drama and experience and in turn should bring clients back into the stores. Click and collect, same day delivery, etc. will become standard.”

Forging A New, Deeper Connection

Knowing that there’s a return on investment for this kind of technology upgrades matters. In fact, some might say it’s the only thing that matters. But that would be overlooking a less tangible (but no less important) metric, something that Kevin Roberts, CEO of Saatchi & Saatchi calls “ROI - Return on Involvement.”

This new ROI places a value on the engagement of brand fans. While acknowledging that true fans aren’t a significant percentage of buyers, Roberts points out that they have a disproportionately large influence on the brand’s success. Building that influential fan base is “critical,” Roberts says, and encourages retailers to see these in-store experiences as key in the fan-winning battle. “The more that brands bring their consumers, customers and partners into their secret garden,” he notes, “the greater the rewards that will flow back in, and the bigger the garden will grow.”

We're working with great retail brands right now. We'd love to explore how to grow your own garden with immersive retail technologies. Let's talk about partnering to create an innovative experience for your customers.

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