(Source: Forbes.com | By Kevin Guppta | July 16, 2015)
Make no mistake: eCommerce will emerge as a dominant player in retail sales.
Companies like Amazon, Alibaba, and even Ebay want to make sure that happens. To be fair: this won’t mean the end of physical retail stores, but it will mean rapid transformation in the way retailers view logistics and customer habits as technology increasingly influences both. So how will technology eat away at the astounding 94% market share that brick and mortar retailers own?
When you comb through the different studies being published on the future of retail, you start to see some interesting insights crop up. It brings to mind a few unique questions on what businesses can expect from customer habits, and how quickly technology will influence the retail experience.
Here are some questions that came to mind:
Can virtual reality and augmented reality replace the brick and mortar experience?
It’s an early play but 35% of consumers surveyed by Walker Sands for its Future of Retail Study said they would give virtual reality (VR) or augmented reality (AR) a go. Both formats have the potential of creating personalized immersive shopping experiences for customers directly in their home. You can see how a dress might look on you in your living room rather than dealing with line ups at the fitting room. Plans to reorganize a room in the house can be visualized by mapping out the room through a much more responsive app. VR/AR might be useful for how a product looks on you or in your environment, but it’s still unclear what the technology can do for the feel of your purchase. What will a fabric feel like on your skin? How will the wood grain on furniture enhance your living space? These are tangible challenges that both formats will have to address because shopping still requires a tangible aspect to the experience.
Will shopping become cashless?
A cashless future is inevitable. But the trust factor–the security that comes with having and handing over cash–has yet to be beat. 56% of US consumers told Walker Sands they still use cash for small or big ticket purchases, but mainstream awareness of new services like Apple Pay are slowly shifting mindsets onto the digital wallet. Smaller factors like seamless or consistent experiences are minor hurdles for customers, but at the end of the day most people simply don’t feel safe with a cashless payment system. Whoever cracks this one will be ahead of the pack for sure; someone just needs to set the standard. Pay attention to the companies that go after multi-currency conversion formats, attractive service fees, and even incredible rewards programs for purchases.
How will the Internet of Things (IoT) transform logistics?
Smart devices are increasingly being built to cater to our every whim. Google Now wants to tell you what you want before you’ve even asked for it. Amazon’s Dash button wants to make sure you never run out of household items like toilet paper. These services hope to always be connected to your habits or your home, and they’re going to radically reshape what retailers understand about supply, demand, and logistics. But even technology as instant as Amazon’s or Google’s faces an uphill battle for adoption. Consumers just aren’t at that point of use yet. Last year, Acuity Group concluded that 87% of consumers were unfamiliar with the term “Internet of Things”. That same group was also unclear of how IoT influenced devices like wearable tech, thermostats, and even smoke detectors. This is a long term play that will certainly have big benefits.
Will the “sharing economy” be the end of retail?
This one is a bit of fear mongering. It’s absolutely untrue that what the tech industry has dubbed as the “sharing economy” will displace the retail industry. Sure you can share a car, or a house and avoid ownership of those products but it won’t replace buying goods and services outright. Whatever phrasing you choose to apply to the concept (collaborative economy is another one), all the technology will change is how we pay and barter for those services. Uber, Airbnb, and other services provide fantastic options for specific needs customers have, but they’ll just be one facet of a new retail landscape where some products can be dispersed between people through local resources.