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posters, signage and point-of-sale material from head office every time a campaign or line changes feels increasingly outdated.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?
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.
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.
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).
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.