Experiential retail Page 6
Window-shopping comes alive
● In April the world’s largest fast-fashion retailer, Zara, broke with conventional retail wisdom and emptied window displays in 120 of its biggest stores across the globe. In their place came moving images of women modelling the retailer’s latest in-store collection — something that could only be seen with the augmented reality app when customers held their phones up to the display window.
As curated realities become the norm, the intersect between digital and online platforms is fast becoming the new wave of experiential retail.
Morne Mostert, director of the Institute for Futures Research at Stellenbosch University, said the adoption of AR in sub-Saharan Africa in the early stages would be slow “but innovation in Africa has a way of cutting through the clutter. At this stage advanced augmentation is a rare experience, but once it starts competitors will soon follow.”
Augmented reality refers to an interactive experience where the objects in the realworld are “augmented” by computer-generated images in real time.
Mostert said AR should form part of the overall customer experience. “This facilitates a convergence of the customer needs of acquiring goods and the need for recreation,” Mostert said.
Companies such as the shopfitter Innovation Factory are starting to see interest from their clients in such technologies.
Adam Dembovsky, the founder of Innovation Factory, said: “What retailers are wanting now is a very big change in the next couple of years. but South Africa is going to be quite far behind the curve. Even so, it is something we are going to have to integrate” in order for retailers to enhance the consumer’s relationship with their brands, he said.
Dembovsky’s company does shopfitting for retailers and exhibitions for companies such as Hyundai. It designed the Samsung Galaxy Studio pop-up store in Sandton City, which used virtual reality in conjunction with multiple mobile devices.
This installation represented AR at an early stage, an experience Dembovsky said companies were increasingly looking for.
“There is going to be harmonisation between digital and built retail platforms, which has to a large degree been facilitated by the meteoric rise of Amazon and how that has wreaked havoc on US retail space,” he said.
A matter of trust
According to a BI Intelligence e-commerce report last year, Amazon accounts for 4% of US retail sales and 44% of US e-commerce, and has had a ripple effect across the sector with many physical players adopting Amazon-like practices in their stores.
“Innovation is going to be the biggest differentiator, and vertical and horizontal integration is going to be key. We need to get more technologically focused and we are light years behind,” Dembovsky said.
A research report on AR by business-tobusiness research firm MarketsandMarkets says this category is estimated to grow to $7.95-billion (R107-billion) by 2023 from $1.15-billion in 2018, driven by online shopping. Consumers expect convenience, which will encourage retailers to adopt AR with rising smartphone penetration and the growing adoption of connected devices.
But even in the heart of markets that are quickly adopting AR, there is still a long way to go.
Petah Marian, senior editor at Londonbased trend forecasters WGSN Insights, said stores such as Sweden-based Ikea and USbased Wayfair furniture retailers were using AR to showcase, for example, how a sofa would fit into a person’s house, while makeup brands are using the augmented reality provided by Modiface to show people what particular cosmetics look like on their faces.
“What it’s likely to do is change how we visualise products in our homes and on our bodies.
“As mobile phones become more powerful, and 5G networks are rolled out more widely, we also expect it to be used as a wayfinding device in-store to find specific products,” Marian said.
“We are some way from true mass adoption — it will be a slow shift and retailers will need to treat this as a long-term process.
"As smartphone penetration grows and data becomes cheaper, it will be increasingly picked up by consumers. Retailers can help along the process in-store by offering free Wi-Fi.”
Marian said the Modiface makeup mirror had claimed a 31% increase in sales through the use of AR “because people feel more confident that they will like what they are buying”.
But it’s not just fashion and furniture retailers experimenting with AR to draw in consumers.
BMW is the first carmaker to use augmented reality technology to sell its cars, with customers using their smartphone screens to view life-sized 3-D models superimposed on their view of the real world.
Mostert said retailers will have to ensure the customer experience is enhanced and not manipulated, through establishing and growing trust in an augmented environment solely designed by the retailer, in which the customer may feel lost.
AR needs to “ensure the customer retains and expands the essential human needs of choice and play” while retailers can “find opportunities to obtain real-time feedback from customers in the augmented experience”, he said.
So what about brick-and-mortar stores? Dembovsky said retailers may no longer “be the shop to sell goods”. The store might in future be more of a “communication platform for the brand, rather than to close deals and drive sales”, he said.