Unqiue QR codes on interactive billboards and kiosks will gleam at you, and invite you to ‘check them out’ via your smartphones and if you like it, buy it in just one click. In addition, augmented reality (AR) applications on smartphones will allow you to scan your environment and look for specific discounts in-stores, and location-based services and social media will keep you ‘updated’, on what your peers have worn or which restaurants they have visited.
A whole new world of technology advancements have found their way into the retail world such as motion sensing, holography and body scanners, which will help to transform the shopping experience. Clearly, the future of retail can no longer be only brick and mortar stores, or online retail, and it will have to be a perfect balance between bricks and clicks, where physical stores are integrated with the digital world, to create an omni-channel model for consumers.
The ‘Bricks and Clicks’ model, according to Frost and Sullivan, will become a key trend and force retailers to transition to a hybrid business model. Online retail is increasing its penetration across most categories and by 2025, it will reach $4.3 trillion globally and account for about one-fifth of world wide retail sales. And, the increasing usage of smartphones combined with the convenience of online portals, will result in e-retail accounting for nearly one-quarter of retail sales in UK and US. In India too, online retail will grow by nearly 15 times to reach $8 billion by 2025.
The resulting impact on traditional brick and mortar stores is quite profound, and they are quickly being reduced to showrooms where consumers would understand the product in greater detail, but ultimately buy it online. This phenomenon is known as ‘showrooming’, and it is increasingly visible, with stores of HMV shutting down, as consumers buy online. Retailers need to find innovative ways to embrace showrooming rather than combatting it.
Change in strategy
It’s not all bad news for brick and mortar stores though, as 80-90 per cent of retail is still going to take place via offline channels, but the risk involved in remaining a single channel is very high. In addition, retailers will need to ensure that stores are not only innovative in terms of design and appeal, but also provide various digital applications to stay in tune with the evolving consumer.
Technology is currently being leveraged by stores to create a unique experience:
. In-store social commerce, like that of consumer brand Diesel Cam
. Traditional brick and mortar retailers would use enhance augmented reality applications, like that of UK-based retailer Debenhams
.Body scanners for creating 3D images of a customer and it helps in Try n Buy and allied applications
. Motion sensing and it allows shoppers to browse products through gestures in their living room. UK-based Tesco will launch this service shortly
Showrooming in India
In India too, showrooming is a growing phenomenon among the tech savvy Gen Y and by 2020 there are expected to be 550 million social networking users and at least 80 million online shoppers. Showrooming is bound to change shopping behaviour here, and various multi-brand discount sites such as Myntra are among the most visited online sites. And, with the consumer market still unorganised in India, shoppers are actively seeking product education online. As a result, retailers that do not have a strategy for delivering digital experiences in their stores could potentially end up losing market share to online retailers.
Most retailers in the future will in fact try to make their stores a ‘destination’ rather than a retail outlet showcasing their brand and philosophy. For instance, Apple has its glass cube iStores, and it has a unique layout and design, that mimicks the brand ’s new range of light-weight thin products perfectly.
And, there are no shelves in the store, only tables used for display and they were amongst the first few to use touchscreens for display and marketing in-store. In addition, Apple made its store a ‘destination’ by introducing innovative concepts like the ‘Theatre’ zone. They are not alone.
Audi unveiled its Audi City Cyberstore in mid July, ‘12, in the heart of London and it offers a one-stop experience for the entire range of vehicles in its portfolio. Consumers can have a model of their choice configured here and delivered to their homes. This store has resulted in Audi’s car sales in London that jumped 70 per cent during the second half of previous calendar year.