Smart Technology in Retail

Retailers are getting smarter and more personalized with the help of smart technology. New tools give stores insight into customer behavior and preferences, allowing them to personalize the shopping experience through data. With convenience at the core of these efforts, technology can be used to attract customers into stores and make the purchasing process more efficient and seamless.

Across all the initiatives we’ve seen among retailers, four stand out as the most impactful and prevalent. If you’re a retailer exploring new ways to engage customers, any of these are a good place to start.

1. Automated pick-up stations.
Target and Walmart are buying or leasing properties strictly as fulfillment centers. These automated centers make it more convenient to pick up packages or return items without traveling to a store or shipping service.

Retailers are choosing locations based on heatmaps of ecommerce sales to get as close to a cluster of shoppers as possible. These centers give shoppers the convenience of online shopping with the added benefit of picking up their package sometimes within an hour of ordering it. They also save retailers money on costly one-day shipping.

2. In-Store Digital Solutions.Boot Barn, one of the nation’s leading western retailers recently rolled out Range Finder, an interactive digital solution that allows store associates to assist shoppers with BOPIS (buy online pick up in store) and BORIS (buy online/return in store) transactions to all 250 of its stores.

Utilizing Elo displays to streamline the shopping experience, the company is providing consumers with an “endless aisle” and “finite aisle” to assist with the sales of western wear and boots. The cutting-edge platform enables associates to narrow searches for products currently in-stock at an individual store, or across the retailer’s portfolio.

3. Recommendation engines. All the data that retailers collect about consumers assist the retailer to make personalized recommendations, putting products in front of consumers that they never knew they needed, but data suggests they would like and purchase.

This is already common online. Clothing retailer Lululemon, for example, includes “complete the look,” “similar looks,” and “you might also like” sections on each product page. So, if you’re looking at yoga pants, you might get recommendations for matching shirts or yoga mats of a similar color and style, as well as other types of outfits that appeal to shoppers interested in those pants.

Lululemon relies heavily on its data to determine what products to sell, constantly adding new items to its inventory — 30 to 50 per day — and testing which ones resonate most with its customers’ tastes.

One of the most commonly used recommendation engines is collaborative filtering (CF) and its various modifications.

4. Extended reality. Retailers are increasingly using augmented reality and virtual reality to give consumers a way to experience products before they buy, whether they’re trying on clothes or wondering if a sofa matches their living room decor.

Macy’s started offering customers a virtual reality (VR) experience for furniture shopping so they can design a room and see themselves sitting on a new couch, for example. In its pilot program, stores with VR increased furniture sales by 60% over traditional stores and reduced returns to less than 2%. Now it has rolled out the technology to dozens of stores across the country.

As gaming arenas sprout up, like the Fusion Arena under construction in Philadelphia, they’ll likely be outfitted with virtual reality headsets, both to play and test games, as well as for a different viewing experience in the stadium seating.

Even apparel retailers are using VR. The North Face was one of the first to offer augmented and virtual reality experiences in its stores. Toms shoes uses VR to show the impact of its buy-one-give-one model, taking in-store customers on a virtual trip to Peru, for example, to shed light on the living conditions and show how they are making an impact on improving education and health programs through their donations.

Carmakers, such as Lexus, Jaguar, Ford and Chevrolet, are using VR and augmented reality (AR) to put drivers behind the wheel of cars that aren’t yet available, allow them to customize the color and style of a car to view virtually, and even “test drive” vehicles in special locations, like the General Motors test track or its proving grounds in Yuma, Arizona.

The journey to retail technology

While some retailers have embraced these trends and are reaping the rewards, others either resist or have yet to get started and fail to leverage smart technology to enhance sales. The biggest challenge many traditional retailers face is how to adopt these new technologies. Implementation must happen while protecting the bottom line and maintaining profitability.

There are countless tools and platforms available to begin gathering data, offering recommendations, and extending reality. Each retailer must find the technologies that make the most sense for its business.

For some brands, entirely new retail concepts give them access to technology as well as a foothold from clicks to bricks. B8ta, which considers itself “retail as a service,” has physical stores across the country that rent out display space to makers of tech gadgets. Now it’s expanding into fashion and lifestyle products, offering tech-enabled dressing rooms, and other tools for lesser-known online brands to dip their toes into physical stores and gather data about their customers.

What’s next

Technology has become an inescapable element in retail success, giving brands deeper insights into what their customers want, allowing them to personalize recommendations and interactions, and bridging the gap between online and brick and mortar shopping experiences.

Ultimately, technology makes retailers much smarter and is enabling them to help boost their sales, catch the eye of the consumer, and evolve with the tech-savvy generations to come. If your brand isn’t taking full advantage of the tools available, it’s time to start.


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