As daily lives increasingly move online and consumer behaviours change, ESSEC Business School, Asia-Pacific’s Reetika Gupta looks at how technology can help brands reinvent retail by complementing and connecting their online and offline shopping experiences.
Retail cannot be isolated from experience. Consumer attention is fleeting and brands must pull out all the stops to cultivate unique and memorable experiences that leave an impression. But approaches that worked pre-pandemic may no longer be suitable.
The retail landscape has been transformed and shoppers’ behaviours are forever changed. As much of our daily lives moved online, many consumers have become accustomed to digitalised experiences, leading to a rise in online sales. In Singapore, for example, nearly three in four (74%) consumers are shopping online more frequently and one-third have made an online purchase for the first time during this period.
However, despite this, people are starting to return to in-person experiences too. This raises a new challenge for brands in understanding consumer choices, especially in areas such as personalised marketing.
Given the active role of technology in the reinvention of retail, brands must up the ante in providing online and in-store experiences that use state-of-the art technology to complement and connect their online and offline shopping experiences. But where can they start?
The power of mobile
With the average person spending 4.8 hours on their phones daily, mobile devices will remain a vital channel for marketers to reach customers. This is especially true in Asia, where the region’s smartphone market alone represents half of the global market.
Recent advances in web and wireless technologies can now allow retailers to gather information about offline hyper-contexts such as weather, physical crowdedness and co-located individuals.
I have collaborated with researchers from other universities to explore the power of mobile in capturing yet another hyper-context factor – the social linkages and ties among individuals cohabiting a shared physical space, and the role that such ties may play in influencing promotion redemption behaviour. We call this factor “group cohesiveness”.
We found that consumers visiting a store in highly cohesive or closer-knit groups (e.g., close friends and family) often find immediate promotions that can be instantaneously redeemed more enticing, whereas those in low cohesive groups preferred promotions that can be redeemed later.
As brands are looking to lure shoppers back, both in-store and online, marketers should use these wireless and mobile capabilities to gather information about hyper-contexts that will help them develop more effective and personalised mobile-based promotions, and design marketing strategies that better align with their target consumers’ hyper-context, such as their group dynamics.
Immersive and engaging experiences are key
Based on the trends we saw before and during the pandemic, the future of retail must also offer personalised and immersive shopping experiences that increase engagement.
A key technological advancement that enables this reality is artificial intelligence (AI). Recently, developments in the field of AI and data analytics have been facilitating the automation of some consumer tasks.
In a survey conducted by PwC, 90% of respondents were familiar with voice-enabled products and technology, while the majority (72%) have used a voice assistant such as Google Assistant. This technology enables consumers to control other devices within their homes and perform online searches and bookings. Such assistants can also provide personalised recommendations based on the consumer’s previous searches.
Similarly, augmented reality (AR) technologies play a key role in providing consumers with a more immersive and personalised experience of a retailer’s products.
In particular, this immersive technology can considerably enhance the customer’s decision-making process by providing a preview of products, which can help to reduce post-purchase dissonance as it provides them with as accurate a product or service experience as possible before they decide to buy.
This approach has been successfully used by brands such as IKEA (it allows the IKEA products to be virtually placed in your own space) and Sephora (the Sephora Virtual Artist enables consumers to try out makeup products via facial recognition) and could be a helpful tool for brands to reach more customers.
While AI and AR can work well separately, the next generation of digital retail experiences should combine these two capabilities, known together as immersive-AI technologies. Used together, they can seamlessly blend virtual objects with the real world and support a richer and natural interactive dialogue with the consumer. For example, a consumer can point the phone around her living room and verbally ask an immersive-AI mobile app for furniture suggestions that would complement her décor and satisfy implicit space constraints, and the app would be able to discover and overlay products matching her preferences.
While the possibilities of using these technologies are endless, pitfalls must be considered as consumers may feel deprived of their ability to control their own choices (Consumers and Artificial Intelligence: An Experiential Perspective, Journal of Marketing).
Additionally, consumers may also feel more alienated from their ability to choose, and the impact this change may have on consumer well-being could be negative if not addressed.
Technology remains imperative to success and can be a competitive advantage when a key aim is to cultivate a positive customer experience, which in the long term can lead to greater customer loyalty.
As hybrid living is slowly becoming the norm, retailers must also be hybrid (or omnichannel) and should use technology to complement in-store and online experiences. Done right, technology can help boost top-of-mind recall and positive consumer sentiment. However, if performed poorly, it can tarnish campaign outcomes and brand reputation.
We are witnessing a digital-first revolution, one that could radically alter our perceptions and expectations. Brands need to evolve as quickly as technology or risk being left behind.