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Comment: Finding the right technology to suit you

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The operating models for grocery and fashion retailers may be quite different but there is considerable overlap when it comes to adopting new technology to improve the customer experience in the omni-channel world.

While leading edge technology, such as virtual shopping walls and augmented reality, for instance, are being trialled by a handful of retailers worldwide there is no doubt that the organisations that are innovative in the use of technology will gain considerable competitive advantage. Today’s customers increasingly expect innovations and, relatively quickly, these become a hygiene factor. There is a considerable risk to those retailers who have inflexible operating models and are unable to capitalise on the opportunities that new technology will provide.

So while much of this new technology is having a customer-facing impact, it will inevitably have a bearing on how retailers go to market and impact on their overall business strategy. An added advantage for early adopters, even for trials, is both valuable brand awareness that lives longer than the trial itself and the opportunity to collect more data about customers and products. Furthermore, technology offers all retailers the opportunity to lower their “per customer cost”, meaning improvements in Return on Capital Employed and other key metrics.

Adidas was the first company in the world to launch a virtual shopping wall and since then the next most high profile adopter has been Tesco, first with the walls in railway and bus stations in Korea designed to assisted time-pressed commuters and, more recently, its trial at Gatwick Airport.

Virtual walls represents a relatively low investment (compared with establishing a bricks and mortar store) to gain a presence in high footfall locations. Tesco has relentlessly pursued a decade-long strategy to give everyone in the country access to its brand more often than its competitors and with the wall has identified another opportunity to sign up customers to its online network, this time while they have time on their hands. Naturally, Tesco will crawl all over the data that it gleans on the back of this trial and be in a really good position to decide whether this scheme represents another great way to expand its UK footprint.

The Tesco trial is timely as all grocers are taking a closer look at their property portfolios and virtual walls could become another “format” to reach new (or existing) customers .

Ocado has already conducted two similar trials: last year at One New Change in London and then in July in Birmingham’s Bullring shopping centre. How long will it be before Amazon follows suit? And on the fashion side, will we see Net-a-Porter, ASOS or even Missguided developing versions to give them a presence “on the street”?

Where fashion retailers are further ahead is in the use of augmented reality. While this is still emerging technology, both in terms of its sophistication and relative cost , it is beginning to be used more widely by retailers to improve the customer experience. Principally, it is allowing shoppers to understand products better and to make comparisons easily, as well as, creating a point of differentiation.

One of the better examples of this is Goertz, which has set up virtual fitting rooms in busy shopping centres and train stations in Germany that allow shoppers to try on multiple types of shoes and even send pictures of them to their friends and request feedback.

Among UK early adopters are Net-a-Porter, ASOS and New Look who are using it within advertisements, directing viewers to richer product information with the opportunity to go directly to buy the product.

The grocery “version” has just come to life with another Tesco first – this time with its cover-to-cover augmented reality food magazine Real Food. Recipes are brought to life and readers can scan them and go straight to the Tesco online store to buy the ingredients.

For grocers the investment in new technology is always going to around the convenience factor, whereas with fashion retailers it is much more about enabling consumers to further explore the company’s offer and be “inspirational” – that it also addresses the convenience factor is a bonus.

What is certain is that technology is advancing quicker than retailers can update their operating models to capitalise on each new opportunity. However, what they need to make certain is that the technology is not just about adding a new “gimmick” but something that will help customers get what they want.

Published on Tuesday 28 August by Editorial Assistant

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