How 2 New Technologies Could Affect the Retail Industry

With the ubiquity of connectivity, brick-and-mortar visits are slowly but surely fading away. How can traditional retailers turn the tide in the battle of bricks versus clicks?

Apr 30, 2014 at 8:42AM

With the surplus of goods and services showering the market, gaudy and shiny products don't grab attention for long anymore. Consumers today are seeking out unique and authentic experiences. As a result, the future of retail lies in reinventing and preserving the in-store experience.

Control Group put together a white paper examining several emerging trends in retail technology that, if embraced, could enable brick-and-mortar retailers to take the shopping experience to the next level.

Jonathan Spooner, the man responsible for conducting the paper, points out that screenless technologies, which have already been embraced by many retailers including Kate Spade (NYSE:KATE) and Burberry (LSE:BRBY), "can create memorable customer experiences that seem almost magical".

Screenless experiences

Technology advances over the past two decades or so fueled a paradigm shift in how commerce operates. Online vendors reaped the benefits of Internet-based breakthroughs and took the market by storm.

However, it's no longer just about the technology or the device that facilitates commerce. It's about the consumer behavior that new technologies provoke. To put it in other words, it's what makes shopping fun and enjoyable that lures people away from virtual, e-commerce stores and back into brick-and-mortar stores. 

Screenless technologies provide retailers with the ability to create inspirational moments and personalize the customer experience while maintaining a "human touch," says Spooner. In this way, the retailer breaks loose from flashy technologies, which can sometimes be overwhelming and complicated. Meanwhile, customers can enjoy a unique in-store environment and still obtain information and other valuable content by interacting with a "low-tech" or "no-tech" interface. "If you are looking for a trend to increase sales and wow consumers, screenless experiences will do the trick," Spooner told me. 

How does it work?

There are two ways to incorporate screenless experiences into a brick-and-mortar environment. The first is through projection-based displays like Perch Interactive, which has been used by a cross-section of mainstream retailers like Kate Spade, as well as large retail stores like Nordstrom (NYSE: JWN). The second is through radio-frequency identification (RFID) tags and/or sensors, which Burberry has been experimenting with for some time.

Perch uses motion-tracking technology and hidden projectors to transform a once-drab surface into a dynamic, hands-on interactive display. It creates a path of sensory discovery to the product while removing the imposition of a touchscreen. Customers pick up merchandise on display and in doing so they get access to contextual information, animations, and brand-specific media.

In terms of return on investment, this technology combines the cost-effective benefits of digital signage over traditional paper signage with the competitive advantage that is derived from enhanced brand engagement.

As for the RFID technology, it enables retailers to put stories behind clothes and fashion, responding to consumers' growing interest in what goes behind products.

British fashion label and digital trailblazer Burberry has implemented the use of this technology within some of its flagship stores, including its Regent Street store in London, its recently opened store in Shanghai, and its Burberry Beauty Box store in Covent Garden.

Burberry attaches RFID chips to garments in order to trigger interactive multimedia content on mirrors that turn to screens. Shoppers can learn how a raincoat lining or handbag detail is made and watch items being cat-walked by models. In its Beauty Box location, where Burberry showcases its freshly launched beauty line, the retailer offers shoppers the ability to virtually try on a nail polish. All they need to do is place a bottle onto an RFID-enabled platform and then choose their skin tone. The nail polish appears on a hand onscreen.

"I think this store will be extremely well received, and customers will shop longer in the store because of the experience," Doug Fleener, president of retail consulting Dynamic Experiences Group Doug, told Luxury Daily late last year.

Overall, Burberry's efforts to blur the lines between offline and online while delivering experiences that turn heads have undoubtedly paid off. Over the past six months, its comparable same-store sales picked up 12%, driven mostly by planned investments in store, customer service, as well as marketing.

Final thought

In the reinvented world of brick-and-mortar retail, human interaction is paramount to forging an engaging brand and maintaining a unique experience.

Less screen-dependent technologies can surprise customers without drawing attention away from the product's value proposition. Not to mention, they leave enough elbow room for salespeople and clients to interact with each other in a more conversational manner since salespeople don't need to bury their nose into a tablet or computer screen to call up additional information, Spooner told me.

This is why the whole "screenless experiences" trend is likely to remain in vogue for the foreseeable future.  

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Fani Kelesidou has no position in any stocks mentioned. The Motley Fool recommends Burberry Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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