Retail adapted quickly during the pandemic, partly because it was already on that journey. Now, the focus has turned to bringing people back in-store. Anna Hayes looks at a space with a bright future.

There are, to my mind, two types of shoppers: the get in, get out, get gone type; and the casual browser who’s content to amble along a street or concourse, eyes peeled for the latest bargain or shiny thing.

It’s the fine line, if you will, between function and fashion – the people who want their experience to be easy, and the ones who want it to be an adventure.

The type of technology a retail outlet or shopping centre uses can be differentiated in a similar way: make it useful or make it experiential, and the latter is what brands and retailers across the world are striving for in increasingly spectacular fashion today.

But, as with anything, there are challenges to face along the way, one of which is presented by a combination of apathy and technology – namely the ability to shop without ever leaving the comfort of your home.

Click-and-select

Online shopping and eCommerce were already in fairly full swing when the COVID-19 pandemic struck in late 2019. It would take another couple of months before the full rigour of the virus was felt and governments around the world started to order lockdowns of non-essential services.

Retail undoubtedly took a hit but probably not as big as one might have expected, given the ability to simply click a few buttons and have what you wanted delivered. Or, in some cases, you could go collect the item, masked and outside, an option that I took simply for an excuse to get out of the damn house for an extra half-hour per day.

Sean Wargo, head of market intelligence at AVIXA says that the competition between bricks-and-mortar and eCommerce has been raging for a long time.

“There’s always been this conflict of trying to maintain foot traffic, to justify the expense of a retail experience. I think eCommerce has been a long-term trend but once people felt unsafe going into stores with the pandemic, it just accelerated that phenomenon.”

Terminology and buzzwords like ‘destination retail’, and ‘retail-tainment’ were being bandied around now, Sean adds, remarking that the whole focus is on making a person’s shopping trip more experiential. And this was being discussed even before the pandemic took out all of the social aspects of shopping.

It’s easy to weigh up our current shopping experiences, particularly here in Australia where big in-store experiences haven’t quite got off the ground yet and expect empty units to crop up everywhere.

But, for Richie Cheng, manager of the hospitality and professional displays channel at Westan Australia, he feels that, to borrow a phrase from Mark Twain, rumours of the demise of the retail unit are greatly exaggerated.

“There will always be a space where people want to be presented with the wow factor and have face-to-face customer service. But we agree that online presence has had a huge impact on how we purchase our products and services these days.”

He feels that the overall convenience of online shopping has driven this trend, as well as generational behaviours where younger people have embraced new technology and are more comfortable with it.

Adam Mortimer, director of strategy and partnerships at Spaces Interactive, says that the role of technology has been hugely accelerated in recent years.

“I read an article that said, ‘every business is in the technology business, it just doesn’t know it yet’. There has definitely been a ten-year fast-track to the role of technology. Even thinking about brand experience, our expectations have shifted, and I think every retailer has a great opportunity.”

The Global Outlook

As previously stated, retail took a hit during the pandemic with global revenues in this area down about 25% according to AVIXA figures – Asia Oceania figures were largely similar at 23%, Sean adds.

“But retail is bouncing back strong with double digit growth for the last couple of years – 11% in both 2021 and 2022. It slows a little bit but has a really good growth rate as we go forward so retail is one of the stars of the coming forecast period, as things continue to recover.”

Digital signage, which is still one of, if not the biggest factor, in any retail AV installation, was not hit as hard as retail, Sean points out, because it was used in other sectors to convey health and safety guidelines.

In Australia, specifically, AVIXA is estimating the digital signage market to sit just shy of USD500million in 2021 with an expectation that it will grow from now to 2026 at a rate of about 5.9% compound annual growth to reach two-thirds of a billion by that end point.

Sean adds that, at present, digital signage is the second biggest market behind, naturally, collaboration solutions. But, with the projected rate, it could be the biggest market by the end of current forecast period.

Talking tech

Australia is slowly catching up to the notion of using technology in either functional or experiential ways in retail settings, but there is still a way to go.

Daniel Hewitt is the director and founder of FutureLabs, a creative technology company that works across parts of Asia where, he says, they are seeing a lot of trends in this area.

“The in-store experience is a big priority for brands in Asia. You’ve got brands taking things to the next level because if you don’t you get left behind. We’re starting to see similar trends in Australia. Integration of mobile phones in-store is moving towards a more personalised shopping experience.”

He adds that there’s also a sense of immediacy now, where people go to a shop and if something isn’t there, they can use digital touchpoints within a store to order stock or customise a product.

Adam agrees, saying that he sees it being framed in two ways: “One is utility – be useful to me really quickly. The second is the super imaginative – give me an experience I can’t get anywhere else.”

At the moment, technology solutions in Australian retail are basic but building a great experience isn’t just about the technology or just about the creativity, it has to be a marriage of both, and the solution might be easier than many might think.

Sean remarks: “We, as an industry, have an opportunity to create these crazy, interesting, engaging experiences out of what can be very mundane technology. Sometimes you do use something cutting-edge but, boy, it better work! Mostly, it’s fairly straightforward technology, it’s just being used in a creative way.”

Adam feels that the proliferation of 5G will change the way technology is used and how people interact with it, describing it as an ‘enabling platform’.

“There is audience appetite for enhanced experiences. 5G is now really enabling huge amounts of data and speed, and so everyone is tuning into more and more digitised hybrid experiences.”

Daniel agrees, pointing out that QR codes, NFC and RFID are seamless, easy to use, and widely accepted now by consumers.

“All of a sudden, you’re going back to that connected customer with their mobile in hand. So planning is key to how we merge that digital online customer data to an interested in-store experience. And it might be something as simple as welcoming the customer to the store or rewarding their loyalty but that takes planning on the backend,” Daniel says.

One of the biggest opponents to more complex solutions is cost. Coupled with reliability, there’s a certain hesitation to stray from tried-and-trusted because if it glitches or fails, a store is left with an expensive mess.

Sean says that mobile-driven technology like AR overlays in stores was something that he expected to have seen more of, but he expected that things like the Metaverse would bring this in down the line.

“I think it’s probably because it’s still challenging, it’s still expensive and it’s still cutting edge. It’s not something that necessarily scales really well or is reliable. Retailers want reliable experiences and a quality experience. Any hiccup, like your phone doesn’t work or something’s broken, it just ends up being a detractor instead of a differentiator.”

It’s probably for that reason, among one or two others, that we are still seeing relatively basic technology in retail at the moment. It’s reliable, it works and, as aforementioned, it can be striking if used creatively.

Richie remarks: “Digital signage that promotes and presents the product, the image, and the brand to LED and video walls to showcase and offer visual impact to touch screens that offer assistance, transaction and customisation are all part of the great on-site experience.”

In the same vein of using simple technology in inventive ways, Daniel talks about a supermarket that ran digital signage above its aisles with cameras designed to capture anonymous data of shoppers and contextually change advertisements on the screens accordingly. But projects like these are challenging, not least because of cost.

Daniel says: “It’s hard to run fibre cable to a basement in a shopping centre or to get a good signal somewhere, so it’s actually hard to do something seemingly easy, like running content to a screen, in those circumstances. But 5G will open that up and it’s way cheaper. It’s funny because it means 5G will probably overtake NBN, even after all the investment into the latter.”

Fancy a data?

Analytics have been around for a while and there has been constant talk around the notion of personalising a shopping experience – using AI and machine learning to make certain suppositions based on what a camera on an interactive display ‘sees’ of you.

For example, a group of friends together is shown the latest styles from a trendy boutique, a young couple is directed to home furnishings, or a woman and her child are directed towards a toy store. This might seem invasive but it’s the way of the world these days and we willingly use technology, every day, that does the same thing.

Our phones and laptops consistently push adverts and suggestions at us, even if we haven’t searched specifically for that particular product.

There have been plenty of horror stories about push notifications and targeted advertising gone too far – just look at the teenager in the US whose parents found out she was pregnant based on the childcare targeted coupons being delivered to them!

There’s a fine line between ‘enough data’ and ‘too much data’, and how much and often it can be used before we get annoyed.

Sean remarks: “The ability for retail to become better for us as an individual experience hinges upon our willingness to share information, which comes down to trust. There needs to be really robust data security behind it, and some ability to better filter and determine what information is really wanted by the person.”

He feels that technology will find the right path in this particular minefield but it will ebb and flow as companies trip over themselves and cause people to recoil.

On the other side of the data discussion is the positive aspect whereby personalisation of experience can occur.

Adam says it is about how retail experiences fit into a digitally-led ecosystem – what are the terms of exchange and what sensory experience do you have in response.

Daniel adds that there is always a debate over data and how it is used: “I think if you are aware of it, and you’ve bought into it then I see it being a good thing. If you want to be targeted and shown personalised recommendations to enhance your shopping experience then why not, you get your rewards and other things like that. As hardware gets cheaper and better, and software gets smarter, you’ll see more of that coming through.”

He adds that it’s up to brands to be open and honest, but it is easier said than done because how does a supermarket differentiate between someone who does and doesn’t want their picture taken in a store.

Things can only get Meta

At trade shows in the middle of last year (2021), a hot topic arose, notable more by its concept than reality.

The metaverse, according to reports, is a space where physical and digital worlds come together, offering interactive experiences for work, play, entertainment and anything else you can think of. If it sounds almost game-like, that’s because that’s our most immediate understanding of a ‘metaverse’.

Video games like ‘Fortnite’ allow users to personalise their look, purchase items and live in a different, virtual world and Daniel sees these as the clearest examples of what the metaverse is at the moment.

Adam sees the metaverse in terms of two values: community and culture.

“When I think of being able to enjoy community in a retail sense, it’s about getting out, having a shared experience. A live physical experience will be enhanced by the metaverse and that comes from a culture of being open to fresh ideas, new perspectives, different dimensions, all of which will also be enhanced by what the metaverse represents.”

Daniel says that the metaverse is offering a different world: “It’s a different audience, one that wants to immerse itself in a different reality. I’d bring it back to the idea of the connected omni-channel experience where if someone wants to shop in the metaverse, let them do so. But how can you then complement that act back in-store?”

Adam adds that there are both challenges and opportunities for retail outlets here.

“All retail needs to stay relevant. So, they’ve got to create and be at that edge, listening and watching for what culture is doing and what their audiences are doing. We’re living in a space that we’ve not really lived through before and we’re seeing access to technologies and experiences and concepts that we’ve not really had access to before.”

Staying on trend

There’s no doubt about it that retail is going to be an exciting technology space in the future and Sean expects all manner of trials, tribulations and reimaginations.

“I think it will be very closely related to venues and entertainment because clearly retail is going to learn, beg, borrow, steal what it can from those markets too. Especially as we continue to think of retail as perhaps another entertainment venue.”

He refers to an experience he had in Disneyland whereby he was able to tailor his entire day using his phone and he felt that similar in shopping districts would provide value and an experience for customers.

For Richie, he is keen to see how the digital and physical experiences complement each other.

“My interest will be to see how new technology will integrate and enhance existing positive experiences. Combining functionality and positive experience with imagination and thinking outside the box is key. Why do we need to split the line between online ordering and on-site ordering? Why not combine them so you still have the convenience of online but the wow factor on-site.”

Adam feels that collaboration will become more important than ever as the future incredible in-store experiences will be designed by people who have never worked in the AV space before.

“You’ll have people who understand design, wayfinding, content, human experience. These experiences will be created by artists and creative folk and designers in a way that we’ve not seen before. I think that’s a really radical shift. You’ll see people working alongside each other who may not have worked together before but the role of the collaboration in creating spaces will be quite profound.”

Daniel agrees and feels that this increased focus will foster better collaboration in advance of building such experiences.

“People will be looking for a similar experience to what they had in the metaverse, they’ll be expecting experiences they haven’t had before, and brands need to try to tell a different story or appeal to a particular emotion.”

Sean has the last word: “I think there’s a lot of cool things to look at, but this is one of those markets where the frontier is going to continue to be pushed for sure.”