The Retail Apocalypse Is Overblown. And Retailers Can Still Thrive.
Emily Wengert, Huge’s Group VP of User Experience, reveals how retailers can make their IRL experiences irresistible if they think more deeply about technology and design.
It seems like Amazon is bound to destroy every brick-and-mortar retailer still breathing. But what if we’re over-reacting? What if, beneath the headline grabbing doom and gloom, there are actually reasons for optimism?
What if the answer to surviving the apparent retail apocalypse was to actually double down on what the 21st-century store offers?
“Let’s not talk about Amazon. They swallow the conversation every time,” said Emily Wengert, Huge’s Group VP of User Experience, during her 2018 SXSW talk, “The Reinvention of Stores: Innovate to Survive.” As she points out, the outlook for retail as a category is not entirely bleak. “There is a surprise upward swing of brick and mortar sales,” says Wengert. “It’s actually just a piece of retail that is floundering — department stores.”
Physical retail isn’t dead. Boring retail is.
In the last few years, department store performance has been dragging down overall brick and mortar revenues. Since 2001, department-store sales have plunged 35%, while e-commerce sales have grown from $5.0 billion in 1998 to $335.4 billion in 2015. Overall, the picture is not so bleak: Only 10% of sales globally are e-commerce. More promising, the growth rate of digital sales is declining every year. We may soon be on the other side of a digital peak.
“I’d argue we’re at the beginning of an opportunity for a major retail transformation,” she says. “We should be evolving and changing, but it’s not all blowing up or going away.” To take advantage, retailers have to think differently about how they use technology in-store — and how offline and online experiences build upon one another. To quote Steve Dennis, the former SVP of merchandising at Neiman Marcus, “Physical retail isn’t dead. Boring retail is.”
There are two simple ways for retail stores to avoid boring:
Technology done right.
In many retail stores, technology has been an afterthought. Broken screens and error messages are rampant. Employees haven’t been trained on how the technology will benefit customers and, too often, generic branding takes up virtual real estate. Understandably, shoppers aren’t enthused.
The idea that technology and screens are added to an experience — not integrated — is the wrong way to bring digital to stores. Better to pay close attention to the customer and their context. Wengert points out that technology done right can address some of the worst weaknesses of retail shopping—by shortening wait times, helping customers find products and even improving the experience of workers.
“In-store digital has the power to actually enhance retail’s best traits. What in-store needs to be attractive is more in-store-ness.” The physical shopping experience is tactile, communal and encourages discovery. Asks Wengert: “When was the last time you sat next to a friend and said ‘Ooh. Let’s go shopping together on our phones?!’”
She points to brands like Coop Italia and Alibaba as examples of companies looking to amplify retail experiences with technology. Carlo Ratti and Coop Italia’s Supermarket of the Future concept details the story of every product in-store and allows supermarkets to cut back on waste by limiting the products on display. Alibaba’s AI fashion assistant helped achieve record-setting sales in 13 Chinese shopping centers by using deep learning to make personalized recommendations for customers by pairing their in-person choices with other in-stock inventory.
Huge’s own R+D cafe in Atlanta is testing out an audible that uses facial recognition to queue employees of the customer’s previous experience with the store.
“With the aid of technology. The focus here isn’t just on selling products anymore,” Wengert notes. “It’s about offering experiences.”
Invisible Tech.
Technology has to be woven into the experience as an enhancement every bit as integrated as the architecture or the service experience. Sometimes, that might mean screens. Sometimes, it won’t.
“We’re in a neat moment where technology is exploding in entirely new ways,” Wengert argues. There are great technologies being used inside and out of retail that can create contextual and surprising design elements. See-through screens, holograms, AR, machine learning, smart home technology and physical product design advances are just a few that can create serendipitous retail experiences. Sometimes, “technology” may not look like technology at all—rather, it might augment something every so slightly, elevating it above the commonplace.
Think of a store that magically conforms to the needs of the people visiting.
This is already happening in consumer goods. One example of seamless tech Wengert likes is the Ember smart mug. Ember’s ceramic mug determines the temperature of a liquid and then keeps it hot or cold accordingly, but the technology is so integrated that it can be mistaken for any other mug. By analogy, retail is waiting for mirrors that aren’t just mirrors, wayfinding systems that reveal more than you expect or register experiences that elevate the humdrum process of checking out.
Two examples of the shopping experience being rethought include BingoBox and Nike’s Maker Experience. BingoBox is a cashier-free convenience store being tested across China. The Nike Maker Experience uses AR, object tracking and a rapid on-site production process that allows users to design, create and leave with their own version of the new Presto X shoe in under an hour.
Retailers can use technology to transform their services by moving their focus beyond the typical understanding of users’ goals and needs to their higher order wants, loves and dreams. “I don’t believe anyone goes into a retail store to see screens or technology,” says Wengert. “The idea that technology is becoming more and more hidden gives us a new way to think about enhancing our spaces without having the technology be so obvious.”
To make technology truly succeed in store, retailers should think about how it can be integrated instead of used as an add-on. It also doesn’t need to be front and center. “It can be hidden,” says Wengert. “Think of a store that magically conforms to the needs of the people visiting. That’s exciting.”
The challenge is that many brands want experiences they can replicate and scale across multiple stores and regions. But when you replicate, says Wengert, you’re diluting your chance for surprise: “Instead here’s an idea. Think ‘How do I make it unexpected?’”
Magenta is a publication of Huge.
