Taking the in-store experience to homes
The uses of augmented reality (AR) has infiltrated across many more sectors than the use of MARTA app by Volkswagen in their car manuals in 2013. A year later, Google Glass was made available for consumers. The Google Glass wasn’t as successful as developers hoped it would be, but it did show the potential of what wearable AR could be.
Apple’s ARKit, launched in 2017 with its operating system, iOS 11, allowed AR access to iPhone users. Soon after, the Landmark Group embedded AR on the Home Centre app to enable users to virtually preview furniture in their desired space before purchasing the furniture or visiting the store.
The same year IKEA partnered with a Dubai-based technology provider specialising in artificial intelligence (AI), AR and virtual reality (VR), to develop a VR shopping POPUP concept throughout the Middle East. In 2018, IKEA launched its campaign in the UAE by digitising their catalogue, which allowed the customers to interact with products virtually through AR to enhance the customer experience.
Fast forward to 2020 and the rapid spread COVID -19 pandemic across the globe turned out to be a rather late wakeup call for many retailers. None of us could foresee the coming of an epidemic of such magnitude, bringing the entire world to a standstill. As the shopping centres and stores remained shut, retailers who were early starters on digital transformation within their organisations leveraged AR which let their customers see how a particular product will look on their person or in homes before they buy it.
Challenges arising from the spread of COVID-19 are likely to accelerate the use of existing and new technologies and tools as consumers confronted with lockdowns, millions forced to work remotely with digital connectivity taking even more of a hold on everyday habits.
Nielsen expects consumers may have greater motivations and fewer perceived barriers to more
actively seeking technology-enabled solutions to assist in everyday tasks like shopping. For some consumers, this may be new behaviour, such as shopping for groceries online for the first time. In contrast, for others, this may mean increased online usage or the addition of modern technology, tools and software.
“There is little doubt that consumers realisation of technologies to stay informed and safeguard their health can instil confidence in a stressful period. It may also be the unforeseen catalyst to assert broader, longer-term adoption of technology platforms and solutions,” states
Nicole Corbett, Nielsen director of intelligence.
Nielsen has examined recent data sets collected from consumers around the world. They provided insights on their intentions as it related to technology and reviewed it alongside developments during the weeks tied to the COVID-19 outbreak. Through this research, Nielsen has identified three ‘catalyst moments’ that may change technology adoption horizons and drive changes in shopping habits.
Limited store access drives shoppers online
Globally, online shopping adoption has gained traction, thanks to improvements in infrastructure – speed and cost – participation, transparency and trust. The pathway for adoption is a familiar story around the world.
In many markets, the fashion travel, and entertainment categories have been the frontrunners for consumers to enter the online retail sphere, followed by the beauty and personal care categories as consumers became more comfortable and confident shopping online. But other grocery categories, particularly packaged and fresh goods, have been slower to gain traction in some markets. Today, however, COVID-19 may be a part of driving faster change.
Nielsen’s retailer leader for
Italy, Romolo de Camillis, observed that from late February, as the first lockdown of some Italian areas came into force, there has been a significant acceleration in e-commerce growth. “In the future, e-commerce in Italy is likely to be a consolidated reality, with e-tailers providing a more structured and established platform, and consumers keener to buy FMCG baskets online.”
France, Spain and Australia, where penetration of online shopping for grocery goods has previously been lower, also showed sizeable increases in online retail sales. It was a clear sign that online retail shopping is starting to yield life-changing benefits to consumers.
In leading e-commerce markets, South Korea and China, online FMCG shopping has had a strong presence for a while. It is already ingrained as a regular, if not preferred, shopping habit for a large proportion of consumers.
According to Alibaba, the number of grocery orders placed by users born in the 1960s was four times higher than usual during the Spring Festival. Miss Fresh, another online retailer in China, claims its users aged 40 years and older have risen by 237% during the COVID-19 period.
For markets with both developed and developing e-commerce, the scenarios created by the spread of COVID-19 are essential indicators of what retailers and manufacturers experienced as more trips to the store are curtailed around the world. It will be vital to keeping consumers online once stores reopen their doors. The retailers themselves are likely to be faced with significant supply chain challenges in some markets. It will be critical for retailers to make the migration from offline to online as seamless as possible by communicating and providing additional online navigation tools and support to first-time users on their platforms.
Despite the trends outlined above, consumers are not abandoning stores. Many consumers love the store experience, from the ability to touch and feel the products to the security of knowing that what you see is what you get. Nielsen survey data shows that globally, consumers still have a strong affinity with in-store shopping, with 59% saying they agree or strongly agree with the statement: “I enjoy doing the grocery household shopping.”
But as COVID-19 cases rose daily around the world, many consumers woke up to self-imposed isolation and quarantine situations where a trip to the store was no longer possible or fraught with challenges. But artificial and virtual reality (A/VR) technology has the potential to bring the in-store experience into their homes.
Consider the ability to shop from the comfort of the customers own home remotely. A virtual shelf filled with a curated selection based on customers past purchase history.
The customer picks up and inspects products, asks the virtual assistant questions about product ingredients and checks product reviews. S/he may not be in store, but it feels like they are. And in some markets, this is already the reality, with smartphone apps leveraging augmented reality to show how a product will look in a consumer’s home or how a new shade
of lipstick will suit the outfit she’s wearing or if that new pair of shoe compliments that handbag.
“We see more and more examples of how to use virtual and augmented reality in retail. The beauty sector is huge in Korea, and brands and retailers are leveraging this technology to enhance the user experience, enabling them to test and try out products virtually,” observes Ji Hyuk Park, Nielsen commercial leader in South Korea. So why does this matter?
Nielsen data shows that more than half (51%) of global consumers are willing to try A/VR to assess products and services. With consumers not able to physically visit stores, they will be looking for alternative entertainment and shopping experiences. Companies that can leverage A/VR may hold the answer to immersive AR experiences that will transform engagement and shopping.
A technology-enabled future
As the implications for consumers multiply, new learnings for retailers and manufacturers become evident. China has showcased how companies that harness powerful technology to enable consumers during adversity can become integrated into all aspects of peoples’ lives.
Previously perceived technology obstacles and barriers to adoption may no longer be as indicative or insurmountable, as technology becomes some of the only accessible or viable alternatives to consumers. Not all markets may be as technologically advanced in the retailing areas as
China and South Korea. Many retail and manufacturing businesses around the world can benefit from a more proactive e-commerce strategy, as technology-enabled solutions become even more sought after and preferred.
Progression in technology usage may start with the basic functionality offered by smartphones, such as product discovery and mobile payments. As consumers become more comfortable with these tools, further advancements like auto-subscriptions and personalised location alerts will change the way consumers buy and speed up the adoption trajectory of more sophisticated tools like A/VR.
And these will start to become more widespread as consumers recognise the advantages, they can bring both convenience and experience. ■