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Retail's TECH TIGHTROPE

Published on WARC.

While 2020 brought harsh contraction in various sectors, lockdowns and adapting consumer behaviour brought an accelerated adoption of digital retail and shopping solutions.

Worldwide, e-commerce sales rose 28% in 2020, compared to 20% annual growth averaged over the previous six years. Nine out of ten UK card payments in 2020 were contactless. Thus, it is perfectly understandable that brands took advantage of such rising acceptance to pilot ‘humanless’ retail concepts.

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In Taiwan, 7-Eleven piloted X-Stores. Such convenience stores followed the unmanned retail model pioneered by Amazon Go, using technology to completely cater to the purchase and checkout experience.

However, after an initial wave of curiosity, traffic towards surrounding ordinary 7-Elevens outperformed X-stores. Customers felt that X-Stores were cold, did not offer a human touch and were unable to answer questions around purchases. Taiwan X-stores were closed within 12 months and the project was aborted.

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What went wrong? What’s the right way to uplift retail with technology?

TBWA\Backslash’s new Future of Retail report offers a few themes to consider and examines the balance that brands need to strike when applying advanced technology to retail operations.

Phantom tech

Between required app downloads, scattered QR codes and gamified experiences, digitised physical stores often complicate what should be a straightforward process. Retailers instead can provide relief with phantom tech – invisible tech that enables a more seamless shopping experience. 

SK-II has done this by using online data to enable personalised in-store interactions at their Future X Smart Store pop-ups across Asia through AI mirrors, eye-tracking technology and complimentary phones.

The first stop in the pop-up is the AI “Magic Scan” device which calculates skin’s stability. Based on skin entropy analysis, it scans customers’ faces and measures the status and age of their skin. Once the results are in, the AI recommends relevant products.

All of this is done via an optional private headset, so customers can choose to hear this knowledge in private if they wish, since SK-II understands that not everyone wants to share their skin’s age with the entire store.

Afterwards, customers can step in front of a “Magic Mirror” that can sense when a customer picks up a product and will show the corresponding product’s information and usage. It is designed with eye-tracking technology so customers don’t have to touch the mirror when wanting to read more, a feature which is particularly helpful in post-COVID times. 

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Sales associates then access a customer's results from the Magic Scan and Magic Mirror to better personalise product recommendations. The process is simplified for both parties, thanks to every visitor receiving a complimentary smartphone with the brand’s apps pre-downloaded on them upon entering, so no one has to deal with downloading apps or worrying about privacy.

As the SK-II Global Feature X director Mayu Arao says, the brand’s philosophy with this tech “is not to refine and improve the digital tools so that they are as similar to human staff members as possible, but to use them to increase the options available to customers in-store, so that they have a choice of how to be handled and marketed to.”  

In this way SK-II is harnessing phantom tech to enable a more seamless process, understanding that by having “invisible” digital tools and human staff working side-by-side, stores can provide a seamless and personalised experience for their customers. 

Intelligent ordering 

Beyond enabling a more seamless in-store experience, tech can help us waste less as we move into a more sustainable phase in this era of convenience. Retailers can use tech to minimise returns and more closely match supply and demand to reduce excess.

One brand that is built with this use of tech from the start is unspun, a robotics and digital apparel company that builds custom jeans, based in Hong Kong and San Francisco, and placed on Time magazine’s 100 Best Inventions list in 2019. Their coded software weaving technology slashes off-cut waste for denim, one of the most resource-intensive materials in textiles, and their 3D body scan promises a perfect fit, so no jeans get returned. 

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The 3D body scanner generates a virtual customer avatar using 100,000 data points, followed by customers selecting their desired fabric (all of which are made from organic and recycled cotton and recycled plastics), thread colour, and the style they want. If a customer can’t access the scanners in their stores, scans can be done via an iPhone and in the 3D app, offering ultimate convenience to customers. 

Besides this personalisation, their tech minimises returns and reduces waste – an especially important concern in the fashion industry where over 100 billion pieces of clothing are made every year and nearly 60% of that is trashed or burned within a year. To solve this issue, they envision a world where other brands can use their tech to provide clothing on a mass-scale; they’ve already partnered with H&M in Stockholm to produce collections. 

As more customers expect better fitting clothes and brands to be more sustainable, unspun’s use of intelligent ordering will benefit not only their customers but other brands who use their tech. 

Sensory stores 

In addition to brands using tech to make the entire retail journey more sustainable, retail spaces can blend the magic of virtual technology with the tactility of physical retail, especially when post-pandemic, consumers will be more excited than ever to have physical in-store experiences. 

Sensory stores are especially worthwhile for retailers selling performance-led products, such as the Durasport store in Singapore’s Changi airport. In this retail space, sporting enthusiasts can test its sportswear through five simulators that are all first of their kind in Singapore.

The Pro Ski 360 Simulator is a fully immersive ski simulator featuring "Downhill" slopes, "Freeride", and "Slalom" options. For rock climbing gear, the Freedom Climber is an indoor climbing wall with a rotating surface to simulate climbing without any height risks. For cyclists, there’s the world's first graphene bicycle that can be tested in place on cycling trainer rollers which simulate various slope gradients.

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When it comes to skiwear that is usually a pain to try on, the store has a mirror that lets guests try on activewear without physically changing. And for swimwear that would usually require water to test the flexibility of its material, the store is equipped with a Vasa Swim Trainer Pro bench that mimics underwater resistance and lets you feel how the material moves with your strokes. 

By combining these various activity zones into one retail space, Durasport is able to strongly establish the credibility of its products and its authority on sports. While most of today’s elevated retail experiences show up in short-lived concept stores or pop-up PR activations, Durasport’s store serves as proof that sensory stores will bring an excitement to customers they’ve been seeking.

Using tech for a better retail experience

As brands navigate the future of retail in this new normal, tech will play an increasingly larger role. Through phantom tech, intelligent ordering and sensory stores, the Future of Retail report shows brands the extent to which tech should infiltrate the shopping experience and how they can do a better job. Although new questions for the future of retail will undoubtedly arise, one thing remains certain – reverting back to pre-pandemic consumption habits is not an option. It’s time to reset.