Tough economic conditions for physical retail have led to much debate about how stores need to reinvent themselves to reconnect with digitally-minded customers
Consultants Deloitte in their predictions for 2018 expect more store closures but point to three strategies that retailers should adopt if they are to be successful. The headings Reimagine the store, Experiment with experience and Transform your business all stress the importance of technology, especially the growing sophistication of augmented reality (AR) and artificial intelligence (AI) applications.
Research, however, reveals that so far, experience of these applications has not met expectations. More than half of 1,000 consumers surveyed across the UK said the AR solutions they had used had not given them a great experience. For the time being, this is not too damaging to business, since only 27 per cent of respondents expect to see the technology in a store within 12 months. This gives retailers a breathing space in which to get it right.
Perhaps because artificial intelligence applications such as Amazon Echo and Google Home are increasingly familiar, a much higher proportion of consumers said they expect to see AI in place in the next year. This will also reflect the more positive reviews for AI applications. More than half of respondents (54 per cent) reported a good experience of AI.
The research also reveals that a significant proportion of retailers intend investing in AR and AI in the next 12 months, spurred on no doubt, by some of the high-profile examples already in place and the recognition that retail is increasingly a blended experience, where the online and in-store experiences have to dovetail perfectly. More than four-in-ten retailers (42 per cent) said they intend investing in AR applications, while 45 per cent will implement AI.
Retailers such as Ikea, Argos and DFS are already offering customers augmented reality applications that allow them to visualise items in their homes, saving the immense amount of effort in measuring or matching colours and styles. In fashion retail, the smart mirror overlays different colours and styles on the customer’s image, enabling them to reach a purchasing decision much more quickly, without the tedium of finding and trying on multiple garments.
AR applications are developing all the time, as are artificial intelligence (AI) related store technologies. AI, with its capacity to personalise by learning and predicting from an individual customer’s interactions is a highly versatile technology.
Utilising the same AI-driven voice recognition technology, retailers can cater to the needs of individual customers, providing product information, delivery options and even payment instructions. Conversational interfaces and virtual assistants give customers accurate recommendations and analyse the information for further personalisation, while giving the business deeper insight into sales trends and conversion triggers.
As we reach the point where retailers commit serious investment to in-store technologies that blend online and physical experiences, it is important that the connectivity infrastructure is fit-for-purpose. Almost all AR and AI applications consume high proportions of bandwidth, being hosted in the cloud.
Ensuring that insufficiently provisioned or poorly managed IT infrastructure does not lead to application slow-downs or complete failures is essential. Connectivity has to be both robust and resilient, making use, where necessary of diverse pathways to guarantee that applications are always up and running.
Retailers faced with the dilemma of whether to invest in cutting-edge applications or improve their network, should consider the advantages of a managed services approach, which will ensure the right connectivity is implemented and ensure its optimisation through advanced solutions. These can predict how and when certain elements of the network should run based on past performance, continuing to learn throughout its lifespan.
Equally, where applications serving both customer and business requirements strain networks, software solutions take control of networks, recognising which applications should be given network priority and managing bandwidth-allocation autonomously.
Investment in AI and AR applications is undoubtedly becoming a necessity for the future of retail because consumers will expect them, but all such developments must be founded on a network that is fit-for-purpose and managed for full optimisation.
About the Author
Vanessa Armstrong is head of marketing at Hughes Europe. As a highly experienced and capable marketer, Vanessa has an extensive range of skills developed across multiple sectors and customer segments. Combining practical experience with ongoing professional and academic development, Vanessa specialises in driving innovative approaches across the marketing spectrum from developing strategic direction to implementing creative marketing communication programs.