The retail sector looks to AV to provide an in-store experience
The world of retail is going through a tough time, what opportunities are there for technology to invigorate the shopping experience? Paul Milligan investigates.
The retail sector is struggling right now. In the U.S. more stores closed in 2017 than in 2008, when the global economy was at the height of the financial crisis. Figures just released saw the UK suffer its worst Christmas period in five years, with announcements on store closures and job losses from a range of big names coming with almost weekly regularity since 2018 began.
As usual with news such as this, there are a number of factors at play here, which include fears over job security, stagnant wages, rising prices, but also the growing threat of online shopping. In Europe the UK leads the way when it comes to online shopping, with one in every five pounds now being spent online. Germany and France follow with figures not far behind those.
So with the very real threat to our retail outlets, what can they do to get more people off their laptops and in to the shops? Technology can be key to transforming the shopping experience. Shopping now has to be seen as an experience, akin to going to a restaurant or the cinema. It has to be entertaining and educational and informative, and that is where technology can play a part. Sounds great? There is undoubtedly a world of opportunity out there for AV installers, but there are also a range of barriers to installing and running technology day to day in-store that have to be sorted out first.
The opening one is floorspace. Right now, with the high street stores struggling for sales, floorspace has a higher value on it than ever before. Every single square foot has to feature product, otherwise stock sitting in the warehouse becomes a drain on resources rather than it being on the shop floor, where it can be sold.
So do restrictions on floorspace often dictate the technology chosen by a client? “Yes it does,” says Clas Dyrholm, CEO and co-founder of Realfiction, a Danish supplier of Mixed Reality and 3D holographic displays for the retail sector. “What happens is you see a lot of flat screens because they don’t take up a lot of space, but in return they are everywhere and offer no differentiation. How many people are actually looking at the messages? We can do so much more if the individual brands only had some more elbow room at times.”
Duncan Clapman, retail technologist from global retail integrator and consultant Esprit Digital, takes a slightly different viewpoint. “We would consider the technology is the limitation on floorspace. At present I can use a camera for multiple trigger points or interaction, whether that is audience measurement, facial recognition, footfall count, object recognition off a shelf environment or gesture control. In order to do each of those applications the camera has to be positioned at a specific angle to create that trigger or reaction, so at present the technology holds as much limitation as the floor space. Until either the camera or other applications can be multi-functional there is a limit as much to the technology as there is to the floor space.”
Unless you are talking about a new out of town mall, most retail stores are found in well-established parts of our towns or cities. This leads us to the second problem technology has to overcome in retail, that of poor infrastructure. Many sites have limited power sockets, basic internet connections and an instant dislike of extra cabling being laid, three factors which count against new technology.
“Across retail infrastructure is often archaic. It doesn’t take many years of not investing in infrastructure for it to become old, and that in itself can cause problems. Quite often the technology is waiting for the infrastructure to catch up,” says Clapman. There are a myriad of factors around infrastructure, as David Weatherhead, CEO of Canadian integrator Advanced highlights: “A huge videowall will throw out a lot of heat, do you have the air conditioning to manage that, or will everyone be sweating in your store?”
Something that retailers have been accused of in the past is a timidness or fear when it comes to installing new technology in-store, is this still the case? “It’s like all businesses, some are really innovative and some aren’t. The majority aren’t,” says Weatherhead. Fresh from winning the Retail Project of the Year award at this year’s InAVation Awards for his firm’s work at the Air Jordan store in Toronto, Weatherhead has recent experiences of working at both end of the innovation spectrum.
“Nike want to create experiences, it wants engagement with the brand. So it will invest in technology, whether it is interactivity or AR or VR experiences, they want to push it.” Weatherhead then went on to give another example of a client who wants to invest in what he likened to digital sandwich boards outside 100 stores, “Some are so far behind they just need to do something quickly.”
Dyrholm agreed retail has been slow to adopt technology, but has seen appetite grow in recent years. “They have to create experiences in the retail environment, because that is where they can differentiate from the online world. When people are looking at what type of technology to invest in, we recommended they look at how big an experience and how large an interaction does the technology offer? This can ultimately lead to increased conversion rates, larger basket sizes, but you then have to subtract the complexity of the technology barrier. Is it self-explanatory? Is it easy to use? Does it offer an immediate and positive experience? Does this lead to user engagement and a natural conversion (to sales)?”
You can sense a reticence from retail clients says Clapman, which is “brought about from a fear of purchasing the wrong technology or something that is outdated in a few year’s time. There is also a fear of how they can account for the investment.”
With life proving tough out on the shop floor, is ROI on technology still the number one concern for buyers, or are they now coming at it with the mindset the technology will help boost the brand value, and doesn’t need such close financial measurement? “ROI is always important, but for the likes of Louis Vuitton it’s more about branding. It could spend $1m on a videowall and it might not get the investment back on that, but they will still be viewed as an iconic brand,” says Weatherhead. “The small-to-medium retailers are always looking for ROI, that’s why they want to do pilot studies, even for a few screens in a shop window.”
James Wilder, head of special projects at Esprit Digital agrees, “Flagship stores don’t worry about ROI, they just want it to look better than their competitors. When they do a nationwide rollout is when they need an ROI, in fact they can’t do it without one.”
If a brand is using technology to boost the perception (or value) of the brand, how then do you measure a campaign’s success? “Some want to see an increase in foot traffic, others look at social media. They want people to go in to the stores and talk to their friends about the experience. Louis Vuitton will be a lot more qualitative, smaller retailers will be a lot more quantitative,” says Weatherhead.
What technologies are making the biggest impact in retail right now? Unsurprisingly its touchscreens, the appeal is best summed up by Weatherhead, “People just get it, its not expensive and the clients can use assets they already have from the web.” LED is another technology that is growing in retail, due to its rising quality and falling cost. As for other technologies, it seems as though they are all still ‘in the future’ to some degree. “We are seeing AR and gesture-based control being tried and tested, but it’s not being rolled out across an estate yet,” says Clapman. Enquiries are been made says Weatherhead, but that isn’t translating into completed projects on the ground. “We are getting asked a lot about AR and VR but we haven’t deployed anything yet. It’s the same with holographic displays and magic mirrors.”
Like all technology it’s about finding the right fit says Dyrholm, and finding technology that can help drive sales in a time when sales are hard to come by. “In our world impact often begins as wow factor. Once you stop people with the wow factor it then becomes about conversion. If the technology only provides an experience then you are giving people a fun time but it won’t convert into sales. If the technology communicates and nudges people into engaging with the actual products then you will see that conversion."