The retail industry is in the midst of a rapid adjustment to changing consumer behavior, as online shopping continues to grow. While that technology has put pressure on retailers, those same brands are now using technology in new and innovative ways to enhance the in-store experience.
Numerous brands have undergone bankruptcies and major restructuring operations during the past several years. While Class A spaces continue to perform well, many lower-tier shopping centers are confronting a challenging market.
Some analysts have suggested that such a shift was inevitable, given the balance of retail space that exists nationwide.
Data from Cushman & Wakefield’s Retail Group and CoStar noted there were 22.9 square feet of gross leasable area in U.S. shopping centers per capita. By comparison, Canada has just 13.1 SF per capita while Australia has just 6.4. Every other country included in the research had numbers of 3.2 SF or less per capita.
With that quantity of retail space, the idea that lower-performing space would need reevaluation and/or repositioning shouldn’t have been a surprise.
Regardless of the root cause, retailers are looking for any and all opportunities to stand out in a positive way – including the addition of new in-store technologies.
“Retailers are really embracing technology across the board,” says Emily Ou, Managing Director for Cushman & Wakefield’s Retail Brokerage team. “Smart tech features allow stores to optimize their real estate footprint and do more business in less space.”
Consumers are increasingly asking for these types of enhancements. A recent survey from the International Council of Shopping Centers found that within the next few years, the majority of consumers would expect to:
- Have access to products/sizes available in store without engaging a salesperson
- Virtually view how home furnishing accessories fit in a home before they make a purchase
- Compile a shopping list on a store app and receive a floor map to locate products.
One trend involves retailers introducing touchscreens and kiosks to help enhance the in-store experience. This can take many forms – ranging from a simple digital catalog set up on a display all the way up to “magic mirrors” featured in the dressing rooms of higher-end luxury stores. But the constant goal is to drive traffic and engage customers to increase sales.
Philip Chila, Director of Waltham-based ViewPoint Interactive Solutions – which designs kiosk solutions for retailers – says they have a wide variety of benefits.
“Kiosks allow retailers to present even the most expansive product inventory in an engaging way so customers can make informed decisions, and even make purchases without having to wait for assistance from a sales rep,” Chila stated. “This helps retailers save headcount by enabling a leaner floor sales team to sell as effectively as a larger team without compromising the customer experience.”
Other companies, Chila says, are using kiosks to reach customers away from their physical showroom. One example is Flagship Motorcars of Lynnfield, which went beyond just putting a car in the mall and deployed an interactive kiosk in a branded lounge area at the North Shore Mall.
“Since the kiosks were deployed late last summer, brand awareness has climbed dramatically,” he says. “Requests for test drives, which can be made directly through the kiosk, are up; leases and sales have increased; and the dealership has successfully built awareness among a group of consumers it couldn’t previously reach.”
Technology enhancements are also stretching far beyond kiosks into advanced apps and other innovative technologies.
One example of this kind of push is Lowe’s. The home improvement chain has partnered with Google and its Tango technology to overcome two of the home improvement industry’s biggest consumer hesitation points:
- Where in this store can I find this item?
- How will it look in my home?
To help in-store customers find what they need, the company developed an In-Store Navigation app. Once customers select an item, the app displays a virtual path they can follow right to a product’s location on the shelf. Not only does this improve the customer experience, it also frees up staff to answer more detailed customer questions or perform other duties.
The company has also developed an augmented reality app called Lowe’s Vision, which – instead of spawning Pokemon – shows people at home what their room might look like if they purchased a particular item.
“Lowe’s Innovation Labs is working toward creating a future in which the world around us is interactive and shoppable,” says Amanda Manna, Director of Narrative and Partnerships for Lowe’s Innovation Labs. “Apps like Lowe’s Vision are only the beginning of a shift toward this future state.”
While these both of these apps are just prototypes and would require specialized phone hardware, they are a sign of what’s to come in the industry.
“Stores without some sort of tech, self-serve transaction kiosks, VR, AR or whatever the latest and greatest is, will become a rarity,” Chila says. “At the end of the day, retailers will use whatever tech boosts the bottom line while still satisfying customers’ high expectations”
Are we really that far away from using virtual reality to try on a new shirt or jacket? Or even test drive a car?
Only time will tell.