Personally, I think 2014 was the year when the hype around digital technology in retail stores crested a wave.

By 2015, I was writing fairly sceptical posts about the screens in the corner that nobody uses.

However, now that the noise around kiosks, beacons and mobile loyalty has died down, it seems a good time to assess the landscape.

Here are some thoughts on consumer-facing technology...

Digital store fronts rapidly become 'best practice' on the high street

WHSmith, perhaps considered a rather traditional or whimsical retailer (given its 18th century roots, I don't think that's an insult), has recently announced plans to introduce digital screens to 100 store fronts.

The 55-inch screens will promote Smith's products as well as displaying third-party advertising.

When Graham Charlton wrote about Primark's giant video walls in 2013, the sight was pretty fresh on the high street. Now, any fashionable retailer knows that digital shopfronts are a must-have.

For all the beauty that a department store's Christmas window display can bring, the ability to use video is a powerful way to attract footfall.

To put it another way, in 2016, the idea of receiving a delivery of posters, signage and point-of-sale material from head office every time a campaign or line changes feels increasingly outdated.

Of course, the brand still matters and digital screens might never be right for smaller, more artisanal outlets - but right now they feel like a must for high street fast-fashion at least. 

A sight soon to be forgotten?

wh smith 

Location-based in-store tech? Let's not walk before we can run.

There's nothing much for me to add to a brilliant article by Kyle Fugere from dunnhumby Ventures (an investment fund specialising in retail technology) about the immaturity of in-store location tech.

Kyle is positive about the potential of beacons to impact many industries, but sees the focus solely on retail (and store tracking) as slightly myopic.

I'll summarise:

ROI is a problem

To quote Kyle:

..what is the dollar value of knowing a consumer is standing in front of the beans at a grocery store?

Is a push notification that the beans are on sale going to do a better job of converting me than the bright yellow tag in red lettering, stating that the beans are in fact on sale? Maybe.

But unless that message can be tailored to each person individually, that’s a fairly challenging ROI to prove, and at the moment, few in the space have the data necessary to make that calculation.

Retailers don't have platforms or data in order

Many retailers have only recently developed apps, and therefore want to concentrate on winning over customers to the app experience.

If the app is throwing too many new, and perhaps untested, features at customers, this may cause attenuation of users.

In addition, retailers may not yet be in a position to add this level of functionality, given the data challenges implicit.

ibeacon

VR/AR might be more for PR

VR has been used for PR so far (see Tommy Hilfiger and Thomas Cook) to give a brand a younger and more techie image (in the two examples given, perhaps in response to Burberry and Airbnb).

It's possible that AR, in the spotlight again due to the debut of Hololens (being sent out to software developers), could provide the practical use cases to complement VR's experiential pull.

Lowe's is already using Hololens to showcase design fittings (e.g. kitchens) in a showroom. This is similar to the way that Lowe's and IKEA have used tablets for AR, allowing customers to superimpose images of furniture in their own homes.

I've previously been fairly sceptical about AR, and of course there are myriad uses, but all the early press around Hololens seems to hint at technology that could aid industries such as construction and design.

The ability to collaborate (including remotely) and accurately assess 3D models may be something that disrupts the B2B world before retail (see TechRadar's hands-on review).

Microsoft Hololens

hololens

Third-party mobile payment is growing slowly (but promisingly)

Payment is probably the final big tech opportunity we should assess.

Apple Pay has been used by 16.6% of iPhone 6 and 6s users up to October 2015, according to Apple data. That represents 5.1% of all eligible transactions at POS terminals for these users.

Those numbers are not to be sniffed at but they don't blow me over either.

However, a recent discovery of certain commands in Facebook Messenger's code (e.g. no cash needed) led Mark Zuckerberg to admit he is open to teaming up with Apple Pay or other successful payment providers.

Facebook Messenger already allows peer-to-peer payments (since March 2015) but allowing payment to merchants could bolster a trend for third-party payment.

WeChat's payment functionality (WePay), allows for payment in eight foreign currencies and can be used by Chinese consumers when abroad to pay using its QR-based system.

Perhaps, eventually, those that don't offer mobile payment will be viewed as cash-only merchants are today.

The race is still on

Leaving ecommerce aside, it's fair to say that digital's impact on retail is yet to be fully realised (particularly consumer-facing tech).

John Lewis has recently begun accepting applications for its JLab 2016, providing a great new idea with facilties, opportunities and guidance in return for a small stake.

Retailers will have to continue fostering innovation like this, if they're to see dramatic change in the digital customer experience.

Ben Davis

Published 7 April, 2016 by Ben Davis @ Econsultancy

Ben Davis is Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

1145 more posts from this author

You might be interested in

Comments (5)

Matthew Kelleher

Matthew Kelleher, Commercial Director at RedEyeEnterprise

Hi Ben, fascinating thoughts. On iBeacon technologies, I agree that uptake is slow and interest more in the medium to long term, based on difficult ROI models. However, I think that if organisations are limiting themselves to ROI analysis based around BOGOF deals on Beans (crassly developing the analogy used by Kyle Fugere, from his article which I agree is excellent and very honest) then I agree, a tipping point in ROI is going to be difficult to achieve. I think it needs a broader view.

We probably all agree that browser data is valuable. It has been proved so online. Of course, customers 'browse' in two arenas, online and instore. Browse data can be used for many things, from targeting correct offers, developing a full single view of the customer to developing loyalty through personalisation. A joined up approach, based on a single view of the customer, could apply similar, highly personalised practises online and instore - part of an 'OmniChannel approach? But such an approach relies on as issue you raise very pointedly - "Retailers don't have platforms or data in order", in this case a requirement for a SCV database that drops in-store browser data onto a customer record along side all other channel data, most importantly online browse information and makes it actionable.

I'm a believer in the value of iBeacon technology and its ROI, but I think that the ROI looks a lot better when it is expanded outside the obvious instore targeting applications and used on a multi-channel basis. Because of course, customers not only browse online to buy instore, it can work the other way too.

over 1 year ago

Ben Potter

Ben Potter, Director at Ben Potter - new business mentor

Interesting read.

I think the biggest mistake retailers are in danger of making is assuming that digital technology is the holy grail for delivering a great in-store experience.

No doubt digital technology can enhance the experience. However, the best experiences involve human interaction. Not the pushy store assistant following you around like a lost puppy. But instead the highly knowledgeable, friendly and helpful store assistant who is there when you need them.

I was at an event recently where we were speculating the future of retail. One of the interesting themes that came up was something we coined as 'digital fatigue'. In attempting to create better experiences through the use of digital technology, retailers are in danger of actually making the experience worse.

This highlights two things for me:

1) Any decision on a digital technology 'solution' should be led by the customer - is this something that is actually going to add value? Have we involved the customer in the decision making process?

2) Retailers should focus as much of their attention on good old customer service as they do technology. The latter will never replace the former.

over 1 year ago

Ben Davis

Ben Davis, Editor at EconsultancyStaff

@matthew Agree that in-store browsing data could be very valuable, but not for in-store experience. It would be amazing to use it to target customers when they have left, but even then it's difficult because you can not know whether they actually purchased something already (unless they use third party payment or a loyalty card).

Kyle said he liked the idea of interaction based on one stimulus - entry to a store. I agree, and iBeacons can do this, but intrusion into the cx further than this is fanciful IMHO. Simply because shopping is one of the few scenarios where consumers don't want to be constantly looking at their phones.

In short, I agree with you. iBeacons can aid a multichannel approach, but must be used in a very simple way.

over 1 year ago

Ben Davis

Ben Davis, Editor at EconsultancyStaff

@ben - completely agree!

In the UK, I hope the newly increased living wage isn't going to mean some retailers cut staff. They're the most vital thing for taking cx from good to great.

over 1 year ago

Simon Liss

Simon Liss, Head of Innovation at Omnifi

Ben, it's good to see some critical appraisal of some of the retail tech hype out there, thank you. Both Beacons and VR have been heavily touted, but both fall short of the mark when ROI, shopper adoption and need are considered. You are right to question both and none of my retail clients are asking for this kind of thing, because there are much bigger jobs to be done in stores right now.

eCommerce is forcing a change in physical retail thinking - either because the store now has to compete with online, or because the store now has to operate in a multi-channel operations/customer journey environment, or both. The answer is often not the digitisation of the existing experience and approach (e.g. digital posters replace paper posts, VR product demos replace product brochures), but actually the re-thinking and re-engineering of the role of the physical store within the context of digital disruption of commerce and comms.

By that I mean entirely new digitally enabled approaches such as store analytics, single customer views, personalisation of in-store experience and the creation of more efficient and seamless cross-channel journeys. They might include the use of beacons, but much of what will really change and transform retail on large scale won't be showy visible tech like VR or AR. I think the real retail game-changers will be fairly behind the scenes and data driven. They'll use existing, ubiquitous and scalable technologies like joined up back-end stock, CRM and payment platforms tied to 'thin layer' front-end customer facing mobile web, mobile payments, WiFi and staff devices. Go forward three years and this will be supported by RFID enabled products and maybe a smattering of low profile in-store digital signage and touch-screens. That's just my opinion, and one quarter in I'm still standing by my 2016 Retail Tech predictions.

https://www.omnifi.co.uk/thinking/some-connected-store-trends-you-shouldnt-ignore-this-year-and-some-you-probably-could/

Physical retail is going to be transformed by technology, there is no doubt. But by its very nature established high-street retail is going to change slower than web based commerce. Moreover, the vision for physical stores is perhaps one where traditional retail benefits (brand experience, physical/tactile and human/emotional interactions and dialogues) are cleverly and subtly supported by behind-the-scenes digital technology, not pushed aside by 'shock and awe' immersive screens and VR experiences or flooded with invasive push marketing via beacons.

over 1 year ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Digital Pulse newsletter. You will receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.