What will it take to make shopping at the mall exciting again? In the face of the $1.2 trillion e-commerce industry, retail brands are in need of a way to evolve the physical shopping experience. A recent New Yorker article even went so far as to ask if the very idea of commercially viable mall properties is over in the U.S.
With intuitively designed apps, highly interactive websites and same-day shipping all widely available, it's an uphill battle for retailers. But thanks to significant technological innovation, the smarter store is on its way.
Although retailers are struggling with driving foot traffic to physical stores, there are certain pioneers that are infusing technology to replicate e-commerce experiences in a physical setting. Bluetooth Low Energy appliances, otherwise known as "beacons," are one example of the latest advancements in retail tech. Beacons are now being used to sense and track smartphones and feature phones to optimize retail operations.
In the same way that e-commerce brands use mouse tracking, heat mapping, engagement analysis and who-knows-what-else to assess shopping habits, physical stores are beginning to replicate such analysis with beacons and BLE.
While the current options for in-store implementation are limited to a few pioneering companies, the potential for innovative applications by retailers is high. Through a combination of kiosks, smart mirrors and branded companion apps that utilize beacon technology, retailers can now create futuristic shopping experiences that appeal to a generation glued to its phones.
Guided Browsing and Recommendations
Browsing the aisles of a store with the help of an accompanying app is already a reality in today's retail landscape. American Eagle Outfitters, Staples and Nordstrom are using mobile devices as a means to communicate offers and analyze physical shopping habits. For instance, when customers who have downloaded the companion app visit a Staples location, they receive a geo-fence-enabled coupon.
Combined with beacon and BLE technology, these technologies help to provide real-world shopping experiences inspired by tactics online. Using in-store mapping software from Shopkick and the iPhone 5s iBeacon, American Eagle Outfitters is introducing the technology in more than 100 locations to provide guided navigation and deliver custom offers in-store.
Along with providing novel, memorable experiences for shoppers, technology serves as a powerful analysis tool for retailers. Stores are already installing kiosks and mirrors that double as responsive displays, as seen at Burberry. Using Kinect-type motion sensing technology and 3-D photography, shoppers may someday be able to stand in front of a smart mirror and try things on using a digital changing-room app. Smart displays are already able to sense metrics regarding browsing habits and shopping patterns to deliver personalized recommendations and assess product layouts.
These types of implementations will eventually be extended using wearable computers. Using the example of a grocery store, shoppers would receive suggested-product bundles created by assessing their transaction histories. A grocer's app can potentially provide preset shopping lists, accompanied by guided pathways through the store. Preset shopping lists can be themed for dieters, weight lifters, barbecue hosts and other profiles. Using the Heads-Up Display on Google Glass, an augmented-reality direction arrow can lead the shopper around.
Replicating Online Shopping in Real Life
Companion apps combined with beacon tracking are also being used by retailers to upsell and cross-sell items, and to customize shopping experiences for visitors. Shoppers at Macy's are using the Shopkick app with the new ShopBeacon service. Customers navigate a store with their phone, and the app delivers offers via notifications, depending on location. The notifications are customized according to specific departments and store sections. Similar services are being rolled out at Safeway and Giant Eagle grocery stores nationwide.
While these systems provide substantial personalization for customers, the information gathered from tracking shopping trends is arguably more valuable. Tracking data can be used to refine and experiment with store layouts, in the same way Web development teams conduct A/B testing on an e-commerce site.
If the current progress with in-store technology is a sign of things to come, the future of shopping will likely replicate scenes from a science-fiction film. There is already facial sentiment analysis technology that assesses mood, gender and temperament. Retina scanners are also in existence, and because a person's retina is unique, that technology might replace UDIDs, customer tracking and even mobile payments.
Once a brand understands how to strategically use beacon technology without unsettling shoppers, it can create physical retail experiences that rival the golden days of shopping malls. Retailers should aim to create shopping experiences that are so irresistible and immersive that the very idea of heading to a retail store is an exciting high-tech event.