Conventional wisdom, until recently, showed a direction of travel for retailers from bricks and mortar to online. In the face of online competition from the likes of Amazon, more than half the independent bookshops in the United States and the United Kingdom have closed down over the last 20 years, and grocery purchases in the United Kingdom are now twice as likely to be made online as they were in 2010. Click-and-collect services are increasingly common, with Argos recently pairing with eBay to provide the service at hundreds of stores.
The appeal of online is well documented and easily understood: there are no queues or strict opening hours, discounts abound, and the range of products available to browse is almost limitless. Shopping online also means that social media is just a browser tab away, opening up opportunities for immediate validation from peers, helping push uncertain consumers towards that purchase. Research shows that 43 per cent of social media users have purchased a product after sharing or ‘favouriting’ it on Pinterest, Twitter or Facebook.
Conversely, physical shops can do something better than any website. They are able to create an evocative, almost tangible atmosphere, conjuring up a strong sense of brand and identity, spraying a unique scent and curating beautiful displays. They also have dedicated, knowledgeable staff on hand for face-to-face interactions and guidance, and online cannot recreate the experience of trying on clothes, listening to headphones or testing out a chair. For the foreseeable future, physical stores will remain on our high streets and, despite the growth of online shopping, bricks-and-mortar shops are still where the vast majority of consumers’ cash is spent.
While playing to these strengths, innovative physical stores are also now attempting to replicate the best aspects of the online experience. Enabled by new technologies, physical stores can now begin effectively ‘borrowing’ established best practices from their digital counterparts. The Physical Cookie is an excellent example of this. It enables data collection on consumers in a physical mall environment, just as a cookie would online, thus opening the door to an exciting new period for bricks-and-mortar retail. Amazon Go replicates the convenience and speed of an online checkout that has remembered the shopper’s payment details. Ultimately, VR experiences such as Innisfree’s Jeju Flying Bike experience may represent a perfect fusion of both online and offline environments.
Considerable attention has been paid to omni-channel, a sales approach that provides customers with a seamless, holistic experience across wearables, desktops, mobiles and stores. Judging by the innovations we see on a daily basis at Springwise, the physical home environment is now rapidly becoming one of the most important of these channels.
Consumers can already purchase specific items at the touch of a button from within the home, using devices such as the Amazon Dash, a Wi-Fi-connected button that can be placed anywhere in the home and pressed to immediately order an item from Amazon. The button essentially functions as a convenient shortcut, removing the need for the consumer to pull out a smartphone or laptop … though it still requires human input.
As smart Internet of Things devices make their way into an increasing number of homes, we’re beginning to see the introduction of products with the ability (and permission) to make purchases on the owner’s behalf. Internet of Things devices already gather data and recognize habits to better cater for their owners’ needs, so it’s a natural evolution for them to begin ordering items accordingly. Jibo is able to recognize family members and interact with them according to their previous behaviours, making it capable of suggesting a takeaway based on the time, day and what it knows about its owner.
Smart devices often know when they needed refilling or repairing. Already we have seen innovations such as Voltaire, a coffee grinder that monitors the beans within it and reorders a preferred brand when they begin to lose their freshness. In South America, families that rely on propane gas for power can use the Mabe smart scale to automatically order refills before the tank is empty. The FridgeCam alerts users when food expiration dates are near and automatically compiles shopping lists.
These developments follow the pattern of minimizing consumer effort in the retail process, with the ultimate aim of making purchasing decisions as close to subconscious as possible.
Lastly in this chapter, you will also find innovations that address a disruption to conventional models of production, supply and delivery – making systems more flexible while improving transparency for the consumer. New production methods such as 3D printing represent an opportunity for brands to switch to a leaner, more efficient and more sustainable model, manufacturing certain goods on the shop floor, or even outsourcing manufacture to the consumer.
London’s Opendesk platform sells designer furniture but outsources the burden of manufacture. Customers can buy access to a design file and then either make the piece themselves or take the blueprint to a local workshop. Such networks help new and small creative businesses focus on design without the financial pressures of production and shipping. Meanwhile, 3D printing is offering consumers the chance to customize, purchase and then print their own products. Over the last year we have seen companies offer everything from 3D-printed electric bike accessories (EET Industries) to synthesizer parts (Teenage Engineering).
For retailers searching for the magic elixir of success, the challenge lies in finding the particular concoction that brings a brand to life – connecting with consumers in a meaningful way by providing high-quality product with unique experience. The ten innovations highlighted here show some of the ways businesses are reacting to, and shaping, the current changes in retail by creatively embracing interactivity.