The retail sector has begun combining the advantages of e-commerce with those of in person sales in order to improve customer experience. Technologies such as artificial intelligence and sensors are opening the door to new services such as intelligent fitting rooms and personalised product recommendations
Photo: The fashion sector is making rapid progress in adapting a hybrid model of its establishments by using new technologies such as virtual or augmented reality. Credit: Shutterstock
By Almudena Castillejo
Gone are the days when the only way of making a purchase was by going to a shop. The customer would say good morning, ask how the family was doing and then buy what they needed. That is, until a few years ago when electronic commerce or e-commerce arrived. Without leaving home and with a single click, anyone could get the product they wanted. Both options offer their own advantages and challenges, and as a result, the traditional and digital worlds have begun to merge to offer a new formula with the best of each. This is how hybrid shops are coming into being.
E-commerce was a revolution for the world of retail. It has experienced continuous growth in recent years, but the Covid-19 pandemic has taken it to another level. According to the May 2020 Barometer, produced by the CIS, 23% of Spaniards have increased their online purchasing during the health crisis. This growth and the possibility of offering new experiences to customers that motivate them to go to the shops are driving the digitalisation of traditional establishments.
New habits, new strategies
This transformation requires a new business model. By using more agile logistic processes, it ranges from what happens behind the scenes, to new experiences within the establishment that make the purchasing process more efficient as a result of the creation of omnichannel businesses.
Consumer behaviour has changed. Before entering a shop, they look for other users' opinions and reviews on the Internet, compare prices or even do showrooming, a practice where people go to a physical shop to see the product or try it on and then purchase it online. The Annual eCommerce Study 2019, prepared by IAB Spain, explains that the information available on the internet about different products allows for a high proportion of sales to be made, as 91% of those that look for information do end up buying either at the physical establishment or via the web.
This change in habits has meant that businesses have had to modify their strategies, which is why getting to know their audience has become crucial. "More and more companies are allocating innovation budgets to learning more about their customers and their relationship with products or services," explains Opinno's Strategy and CEX expert Aurelia Pérez.
The way to shop
Some of the main innovations to improve customer service are focused on logistics, especially as a result of Covid-19. According to Pérez, in the fashion sector: "Nearly 80% of the resources invested by companies in this sector during the pandemic have been directed towards accelerating logistical processes in order to speed up delivery times".
A common option is to incorporate RFID tags into the inventory. This system allows for real-time stock control, electronic item monitoring, increased supply chain agility and easier access to product information for employees.
However, it is not enough that the product arrives on time, the delivery must also be considered. One of the most notable innovations is the initiative by Inditex for its Zara shop in Stratford (London, United Kingdom), which has created a space for buying and collecting orders over the Internet to improve the customer's experience. It consists of two automated order collection points where up to 2,400 deliveries can be made simultaneously. Customers must scan the QR code of their online shopping and within seconds receive their product thanks to a robotic arm that collects and provides the order.
New ways to buy
The use of artificial intelligence and augmented reality in shops is already a reality. Although the integration of digital services in physical shops is in an incipient state, there are already sectors that are taking their first steps. The fashion world is the most prominent.
- Intelligent fitting rooms
These changing rooms are composed of software that detects the contour of a person. Using 3D technology and virtual and augmented reality, the customer can see how a garment would look, and even take a photo in case they want to keep it or share it. For example, the technology company Atlantis has developed a virtual fitting room that can reproduce the fabric and textures of garments.
Another possibility is a project by the firm Mango, which introduced an intelligent mirror capable of reading RFID tags on clothing. So when a person tries something on and wants to change the size or colour, they simply scan the code into the reader on the interactive display in the fitting room to see if there are any other options available.
- Artificial Intelligence
The clothing brand Uniqlo decided to use neuroscience in its Australian shop to set up a UMOOD stand, which recommends clothes to customers according to their mood by using artificial intelligence. To do this, the consumer must wear a device that is shaped like a headband. They are then shown a series of images and videos whilst an algorithm scans their neurological responses to identify how they are feeling. Finally, among 600 styles of T-shirts, it recommends those most in line with their mood.
- Ways to pay
Physical establishments are also starting to have new payment methods on the radar, such as those that can be made via smartphone or cashless bracelets. These systems are expanding among different shops, but they are now also starting to look at the possibility of allowing payment in shops without having to go to the checkout counter. This would solve another of the usual problems in shops: having to wait in long queues to pay.
This has been the case for Repsol, which has launched Way&Go. Through the Waylet app, customers can scan their products, add them to their cart and pay for them. For the time being, it can be used in certain establishments in Madrid, Vizcaya and Valencia. This type of initiative is also on the agenda for the banking sector. For example, BBVA is developing a facial recognition system that could be applied to self-service restaurants in workplaces. The idea is that when a person picks up their food, cameras equipped with artificial intelligence will scan their face and charge them directly to their card.
The link between the offline and online world means that contact with the customer takes place through a multitude of channels. However, for this hybrid world to work, it is necessary to create omnichannel strategies that connect all channels of contact with the user. One example is the "hands-free" option of the El Corte Inglés app, which allows customers to shop in store and decide whether to take their order at the time or have it delivered to their home. It also allows you to scan different food products and make an appointment at the greengrocer's, fishmonger's or delicatessen.
Although physical shops won’t disappear, digitalisation will mean that they are not as we know them today. Digital has arrived to improve the life of the customer. If you are the kind of person who hates going shopping, perhaps from now on you will start to enjoy yourself thanks to these new establishments.
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