The future of retail is a seamless digital and physical experience
By Yeming Wang, Senior Director and Head of Global Key Accounts, Alibaba Cloud
Retail professionals operate in a world that’s more complex than ever. The digital revolution is levelling the playing field and creating many opportunities; so much so in fact, retailers could be forgiven for thinking that reports of their demise, as expressed in “death of retail” headlines, is somewhat exaggerated.
We’re already seeing the merging of online and in-store, with programmes like Refinity pointing to what lies ahead. This is a new sensory experience engineered to make retail come alive, by employing mixed reality and autostereoscopic objects, driven by ultra haptic displays.
For the consumer choosing something like a new bathroom suite in a store environment, as well as having a 3D view of the items, they can virtually touch, feel, and even smell products ahead of settling on their chosen design. This helps bring the creation and configuration process alive, making it more immersive in a way that has never been achieved before.
Across the multiverse
It is widely accepted that China and other advanced Asian economies are the home of New Retail. Chinese consumers buy products and services in manner that combines the physical and the digital in ways that have only started to seep into most European markets.
This type of engagement is expected by an entire digitally native consumer generation that has, in large, part-skipped internet shopping and gone straight to mobile.
European retailers have taken notice, and many are already revisiting their online properties to make them more mobile friendly, or are re-platforming completely to create app-based engagement experiences and transactions.
"How can a retailer roll-out a digital strategy that doesn’t overwhelm the operation when just the task of deploying and integrating the different elements already sounds immensely complex? The key is to find the starting point that provides the greatest benefit and is the platform from which to scale. And the best starting point, is data"
According to Deloitte,“Retailers across the globe are rapidly adapting to the fact that, from the consumer perspective, shopping is not about bricks versus clicks or one channel versus another. Instead, consumers are channel-agnostic. The shopping journey and pre-shopping research is a fluid process with consumers bouncing between online and offline along the path to purchase.”
When I want it, where I want it, how I want it
In retail, the front end is focused on new experiences enabled by machine intelligence, interaction and AR. The middle end provides new intelligence through Big Data, cloud storage and ML, while the back end is built on 5G and new hardware technologies.
But for those retailers on the journey to providing the total shopping experience of the digital age – a component-based approach built on point solutions such as AR, smart shelves, smart mirrors and app-based engagement - does not amount to a strategy.
The physical hardware solutions of digitalisation have seen some retailers ‘dip their toes’ by rolling out point solutions such as a kiosk, touch screen, or an AR headset onto the shopfloor. Too often this proves to be a disappointing experience for the merchant and for the shopper, involving high capital outlay, low engagement and impossible to measure ROI. The issue is not with the product or solutions. The issue is with the context in which they are deployed.
Only when deployments are part of an integrated data driven approach which spans different platforms, optimised production and supply chains and a wide ecosystem of engagement partners can a retailer be said to be thinking strategically.
The issue then becomes one of overcoming the fear factor. How can a retailer roll-out a digital strategy that doesn’t overwhelm the operation when just the task of deploying and integrating the different elements already sounds immensely complex?
The key is to find the starting point that provides the greatest benefit and is the platform from which to scale. And the best starting point, is data. By beginning with a data strategy, setting clear objectives and key milestones, retail can engage and scale up its digital and physical integration strategy – without betting the business.
Retailers must think in terms of building an ecosystem of partners in fulfilment, transaction, content and experience. Ecosystems are key to helping draw consumers and merchants together, narrowing the gap between supply and demand.
Today’s consumers want fast and secure multi-channel digital choices combined with great physical experiences. For retailers it is the only path to successful and repeat engagement.