Over the past 15 years, the traditional retail model has been dramatically disrupted by online retail. With the introduction of online retail, shopping is gradually being transformed from an offline activity to an online one. That was the first retail disruption, but it’s not the last. Increasingly online retailers and offline retailers are evolving to provide an immersive, seamless, and personalised shopping experience. Customers don’t want a fully digital experience while shopping; rather they want a digital shopping experience that is so seamless as to not seem like a shopping experience at all. Powering this change is artificial intelligence that uses data to give each shopper an experience crafted especially for them.
Looking to 2025
Customers expect retail brands to be intertwined with their lives. The line where a retailer is distinct from a shopper will begin to blur. Increasingly, shoppers expect retailers to play a larger and more central role in their lives. By 2025 the products retailers sell will matter less than the experience they provide and what their values are. Offline retailers will have to reimagine their stores as experience zones that innovatively serve shoppers.
Such an experience was prognosticated in the 2002 science fiction film Minority Report. In the movie, the protagonist enters a store and is greeted by AI that cheerfully asks him whether his earlier purchase met his expectations. Before entering the store, the protagonist’s eyes are scanned by the AI granting it access to his personal information. Similarly, by 2025, data will be the key to providing customers with a personalised and immersive experience. Retailers that provide such experiences will partner with their customers; they will not be stores selling products, rather they will sell experiences that enhance the products sold.
Earning the trust of customers will be the key to the success of retailers in the future. Because personalised experiences cannot be created without data, a retailer’s success in winning consumers trust will decide whether it’s successful. Customers who don’t trust a retailer won’t share their data with it thereby preventing it from creating personalised shopping experiences. Of course, retailers who have vast quantities of data will use big data powered by AI to not only create personalised experiences but also to gain predictive insights into customer’s behaviour and preferences.
How AI Will Reshape Fashion Retail
Customers will expect retailers to know them. They will expect retailers to know what they need perhaps before even they do. Predictive insights will allow fashion retailers to bring to the attention of shoppers apparel that will delight them. The technology powered by AI will allow retailers to understand shoppers better than they understand themselves. This technology is already present to some extent however using big data AI will design apparel that will delight individual buyers. Because shoppers will grant retailers access to their online and offline behaviour, retailers will be able to judge with uncanny accuracy apparel a customer will fall in love with. Moreover, retailers will create a buying experience that will enhance greatly the shopping experience so shoppers get exactly what they want in an ambience they love. The boundary between retailer and shopper will transform into one where the former is a constant companion rather than a distant business entity.
Fashion retailers will use sensors embedded in apparel to monitor how often customers use such products. Doing so will allow them to gain insights into which apparel customers are likely to wear. This will solve one of the biggest challenges of retailers and shoppers. Retailers will make more sales as customers will know a product being recommended is one they are likely to wear. Customers, like nearly all today, won’t have a closet filled with apparel they don’t wear rather every garment they own will be worn regularly. This will not only lead to happier consumers and retailers but also lower costs and conserve resources.
Virtual Reality’s Will Become Crucial
Retailers who have an online and offline presence will have to seamlessly connect shopper’s offline behaviours with online ones and vice versa. This means customer’s online behaviour will lead to suggestions in offline stores. The converse and much more will happen as well.
Apparel retailers will have to create unique experiences within stores that transforming buying into an immersive and enriching experience. Rather than spending 2 hours to try on 15 different outfits, shoppers will be able to try on 150 outfits in 15 minutes using virtual reality. Virtual reality will allow shoppers to see how they look in an outfit without the need to try it on. The most irksome part of shopping for apparel, wearing and removing clothes in an effort to find one that is right will be completely eliminated. Furthermore, virtual reality will even provide a tactile feel of apparel so shoppers can sense the quality of material without physically touching it. Those accompanying shoppers will also be able to see and comment on how the shopper looks wearing an outfit.
VR will allow shoppers to try on clothes when browsing in an online store. Shoppers will even be able to allow friends to see how they look wearing apparel, even if their friend is in another city or right beside them.
That retail will gradually take on a more evolved form is already evident as 80% of retailers in the Forbes Global 2000 today are SAP customers. SAP powered technology allows retailers to give a more personalized experience which will only grow in intensity over the coming decade. Gradually shoppers will become more intimately connected with brands. This change will be facilitated using technology, data, innovation, and trust. Retailers who get this right will thrive in the decade ahead while others may struggle or close shop. Consumers expect brands to become an extension of themselves, almost like a parent or friend, this perceptual shift demands brand adapt to a new paradigm.
(Inputs given by Harish Konakachi, President and Executive Director, SAVIC Technologies)