All around the world, companies are trying to deal with uncertainties that the coronavirus pandemic has brought. One of the industries that are facing many challenges is the retail industry (Machtiger, 2020). The need for change in the brick-and-mortar stores was already important before the corona virus. However, now that even less consumers are visiting the stores because they are afraid to get exposed to the virus, the need for change is becoming even more important (Machtiger, 2020).
The need for change in brick-and-mortar stores has led to predictions on how retailers will change the way they do business in the future. It is expected that retailers will make intensively use of technology (Evans, 2020). An example of a form of technology that will be more often used in the future is Artificial Intelligence (AI). Artificial intelligence should be able to improve the customer service. For example, it could be possible that in the future, retail stores will be able to recognize consumers (Marotta, 2020). Once the store recognizes the consumer, the store can adapt their displays, prices and the service based on the profile of the consumer (Marotta, 2020). In this way, the store can create a personalized shopping experience.
A second technology that is predicted to be more increasingly used in the future, is Augmented Reality (AR). This technology could be used in retail stores by providing the consumer with in-store navigation and to help the consumers in making choices by, for example, highlighting products that the consumers finds important (Buder, Dieckmann, Dietrich & Wieting, 2019). Furthermore, consumers could use the cameras of their smartphones to get more information on specific products that are on the shelf. For example, they could request more information on the allergens or customer reviews of the product (Buder et al, 2019). Another way how AR could be used, is for clothing stores. For example, Zara already launched an in-store augmented experience. In the store, consumers could use the camera of their phone and hold it up to sensors in-store to see models wear different outfits. In this way, the consumer can see how different clothing fits the models (Cook, Kusumoto, Ohri, Reynolds & Schwertzel, 2020).
The examples given show that there are many ways in which technologies can be used to change the traditional way of doing business in the brick-and-mortar retail stores. This will be needed for the future of brick-and-mortar stores to still attract consumers to the physical stores instead of online stores. The technologies mentioned will be a large investment for the physical stores, but it is important that retailers consider adopting these technologies, because it brings many benefits and opportunities.
References
Buder, F., Dieckmann, A., Dietrich, H., & Wieting, J. (2019). Technologies Turning Future Brick-and-Mortar Stores into Data-Rich Environments, NIM Marketing Intelligence Review, 11(1), 48-53. doi: https://doi.org/10.2478/nimmir-2019-0008
Cook, A., Kusumoto, L., Ohri, L., Reynolds, C., & Schwertzel, E. (2020). Augmented shopping: The quiet revolution. Retrieved 30 September 2020, from https://www2.deloitte.com/xe/en/insights/topics/emerging-technologies/augmented-shopping-3d-technology-retail.html
Evans, M. (2020). 7 Predictions For How COVID-19 Will Change Retail In The Future. Retrieved 30 September 2020, from https://www.forbes.com/sites/michelleevans1/2020/05/19/7-predictions-for-how-covid-19-will-change-retail-in-the-future/#4474f2d95be3
Machtiger, K. (2020). What Will the Retail Experience of the Future Look Like?. Retrieved 30 September 2020, from https://hbr.org/2020/06/what-will-the-retail-experience-of-the-future-look-like?registration=success
Marotta, D. (2020). Artificial Intelligence: How AI Is Changing Retail. Retrieved 30 September 2020, from https://global.hitachi-solutions.com/blog/ai-in-retail
Hi Valerie, great post! Found it very interesting how you take Coronavirus into account to consider how these technological trends will be accelerated in the retail industry. I think a very interesting trend to consider in combination with the technologies you mentioned is how retailers are increasingly divesting from undifferentiated retail. By divesting from “simpler” stores, without any technological integration, and focusing mostly in premium, technologically advanced, brick-and-mortar locations, combined with an integrated physical and digital experiences, many retailers see B&M stores as the showrooms of the future. By leveraging the trends that you mention through the post, retailers can increasingly leverage this new B&M concepts, while most of the transactions will actually happen digitally, without any friction for the consumer. Again, very interesting read and great choice of topic.
Hi Alexandre,
Thank you for reading my post. I am glad to hear that you found it an interesting topic to read.
Hi Valerie, an interesting blog post you wrote! To be honest retail stores do not come immediately to my mind when thinking about the influence of technology developments. I find it interesting to read how the future could be, and how AI and AR will change the manner we will shop. However, do you think that due to these technologies the traditional brick-and-mortar stores will disappear? Online shopping is a great disruption in the retail industry, at the moment, and with the arrival of more technology, it seems like brick-and-mortar stores are not needed anymore. However, in my opinion, real-life shopping is an experience and therefore will never really disappear completely. What is your vision about this?
I also find it captivating to read that the future may include that stores will recognize their consumers and in this manner have profiles of them. Reading this a lot of questions come to mind, such as GDPR, and how feasible is it? On the other hand, it shows that these technologies will provide to meet consumer needs and a different manner/ experience of shopping will be created. With the rise of these technological developments, it ensures us that we will become more and more dependent on our phones, as it is needed for the AR.
Hi Valerie! First of all super interesting article and I think you chose a nice topic about the retail industry, especially seeing that it is one of the sectors that is struggling most today with the digital era. Some really nice potential opportunities that you dive into which the retail stores could indeed exploit. Especially AI and Augmented Reality being fairly modular technologies I believe that they have the potential of being adapted in the industry. However my concern, which you also raised in your post is, is that these technologies require huge investments and costs. Will retail firms be able to return on investment from this you think? Especially now that consumers are shifting towards online shopping.. I do think that this is going to be the new norm, so don’t you think that retail stores may want to shift their focus on e-commerce rather than improving their brick-and-mortar stores? Curious to hear your opinion 🙂
Hi Valerie,
Interesting read! I did not know Zara makes use of augmented reality, I should try that next time I’ll go there. I was wondering though, if you think both these technologies will supersede store employees? For example, with the introduction of AI, the customer will have a personalized experience without any help, which will make store employees unnecessary as intermediaries. Store employees can’t possibly recognize all customers and therefore could never deliver the same personal service and convencience as with AI. The use of Augmented Reality does this as well, as information that is usually only provided by store employees will now be given directly to the customers through their phone.
Hi Valerie,
Thank you for your post! It will be interesting to see how those stores will use these technologies in the future to attract consumers to the stores instead to the online stores. I didn’t know that Zara is already make use of AR, but it sounds that they are already getting into these technologies and are probably trying to improve this.
My question is, will those technologies replace the employees? If you look at supermarkets, they are also using less cashiers for example. Both AI and AR have the ability to partly replace people in my opinion. I am curious to see how the retail industry will look like in a couple of years with the involvement of those technologies.
Hi You,
Thank you for your insight and reading my blog.
In my opinion, I think it could be a possibility that employees will be replaced by technologies. For example, there are already studies done on this topic that are researching if employees could be replaced by robots. However, I believe that there are still some aspects that robots cannot replace. For example, their creativity. In a fashion store, employees often give advice if clothing looks good on their consumers, or what fits someone perfectly, or which combinations etc. This is something for which I think shop assistants are still needed.
Interesting read!
It is true that during the pandemic some shops even banned trying on clothes to reduce the risk of spreading the virus and thus I do believe that AR will have a place in tomorrow’s world! Helping them visualize how clothes would look like if they worn can increase the efficiency of stores where less people will have to queue in changing rooms and thus more people will easily buy their clothes. This could actually increase consumerism as experiences would be improved. This will also be an incentive to actually shop in stores and not only online. However one could ask how smaller business will continue to compete if they do not implement these similar technologies. Furthermore, I believe that AI in retail stores needs strong privacy policies before appearing on the market.
Dear Amandine,
Thank you for your interesting insight on this topic! I also believe that technologies such as AR could increase consumerism. Furthermore, if companies decide to implement the technologies, they should indeed consider the privacy policies of their consumers. Otherwise, it could lead to a decrease of consumers to their stores.
Thank you for the interesting read. I totally agree with you that retail stores must rethink the way they are structured. If you think about the digital innovations brick-and-mortar stores went through, it is almost surprising how less this is, especially compared to the amazing growth in the e-commerce environment. However, when reading your article I was thinking about the costs and benefits these technologies would have. Implementing these innovations in retail stores must cost a lot. Would these innovations increase customer visitings to such an extent that the benefits would be higher than the implementation costs? Maybe it is more profitable for retail stores to shift their focus on e-commerce and implement augmented reality in the online environment since e-commerce has more potential, as well in the area of augmented reality. What are your thoughts about this?
Hi Isabel,
Thank you for your interesting comment. It is indeed true that every store should consider the costs and benefits of these technologies to see if it is worth it. I believe that the larger stores will start using these technologies.
I do not agree on your point that companies should switch all the way to e-commerce and stop focusing on their physical stores. Having done research on the offline versus the online environment, it is found that consumers find it really important to use all their senses to buy fashion clothing. An online environment, for example, can offer seeing and hearing, but cannot offer feeling. Furthermore, people find the experience of shopping really important and see it often as an trip. Therefore, I believe that it would be definitely worth it for companies to focus on both their online and offline shops.
Hi Valerie. Interesting topic you chose to address. I was wondering how, in your opinion, physical stores can fend off the online stores using Augmented Reality. My original thought was that AR would even hurt physical stores, since it would allow online shoppers to try on items without having them in their house, while a shop would most likely have the items in store. I believe that physical stores could focus on the experience side of shopping, as a getaway from the couch and computer, and as a way to avoid delivery time. Or could stores provide a drastically better AR service than customers could at home, convincing them to leave their house, even during the Covid time?
Hi Joram,
Thank you for your reply. I do understand your point about that AR could also have a negative influence on physical stores. However, as I see it, shopping offline is still an experience or a way to get out of the house. Furthermore, I also believe that next to AR that offline stores use, the physical stores also offer an even wider experience as they have music in their stores and atmospheres. Therefore, I think that physical stores will still exist in the future.
Hi Joram,
Thank you for your reply. I do understand your point about that AR could also have a negative influence on physical stores. However, as I see it, shopping offline is still an experience or a way to get out of the house. Furthermore, I also believe that next to AR that offline stores use, the physical stores also offer an even wider experience as they have music in their stores and atmospheres. Therefore, I think that physical stores will still exist in the future.