Voice shopping, augmented reality, seamless payment – the retail industry is ripe with innovation. We asked Stephanie Atto, Senior Research Consultant, ACRS Research Unit of Monash University, to share her insight on how technology is revolutionising retail and how retailers can navigate changing customers’ shopping habits.
In a competitive retail landscape standing out is something of a challenge. Leading brands and retailers are always looking for new ways to engage and interact with customers, trying them out and learning from them. While the principles of good retail are the same, retailers need to be nimble and open to trying new things to connect with customers.
Online voice shopping is predicted to jump to $40 billion in the US and Britain by 2022 and it’s shaping up to be big in Australia too. The growth of smart digital home assistants such as Amazon’s Alexa, Google Assistant and Apple’s Siri as well as voice enabled speakers such as Amazon Echo, Google Home and Apple’s Home Pod will influence the way many of us shop in the future.
According to Stephanie, if retailers sell products online, they’ll be selling them through voice over the next few years. It stands to reason as voice shopping is a more convenient and personalised experience for customers. It also makes it easier for retailers to reward customer loyalty with one-click ordering, personalised recommendations and basket-building.
Voice is already taking off in America and China. In 2017, Walmart teamed up with Google to launch voice shopping for its customers. Two million Walmart items were added to the voice catalogue so that shoppers could simply speak to their Google Home to purchase items from Walmart. Google Assistant can also scan your purchase history and ask, for example, “Do you want to reorder Colgate toothpaste for $3.99?” and with a single response you have your toothpaste.
“If retailers have an e-commerce strategy at least a piece of that will now be a voice e-commerce strategy. And it makes perfect sense – it’s fast, convenient, and is much more natural for us as humans than interacting with a screen for everything.
But there are challenges for retailers, the biggest being discovery. How will anyone find your product via voice unless they’re asking about it?
Stephanie explains that if a customer has previously purchased a particular brand of toothpaste, then they are likely to be offered the same brand and type of toothpaste when they are searching for that item again. This narrows the customer’s choice compared to seeing something on shelves or on a screen and also means that marketers have a more difficult task to ensure their brand cuts through.
“Targeting will have to be highly personalised and possibly opt-in in order to succeed. Brands will likely avoid mass advertising and instead recommend the products they know their customers have already bought and rated highly—particularly if they’re replenishable.”
Challenges aside, there are benefits for retailers who embrace voice shopping.
“People speak to voice assistants in everyday conversational language in the same way that they would talk to their friends. This allows brands to connect with their customers in a deeper way and helps build greater intimacy. So, with the speed and convenience of voice shopping, brands can build loyalty while selling more.
She believes that voice assistants offer an additional level of convenience and speed over other shopping channels.
“Conversational commerce enhances the customer experience by allowing customers to speak with brands directly and in real-time, while also offering a personalised service. Voice assistants enable retailers to replicate a more natural shopping experience for consumers by swiftly and simply asking qualifying questions and providing customers with tailored recommendations immediately.
“As more consumers own IoT enabled devices, voice assistants present new opportunities for retailers to ease friction in their customers’ lives.”
While voice shopping helps retailers to strengthen their relationship with customers and drive brand loyalty, one of the best outcomes is that voice has opened the internet up to new audiences.
“Research has shown that populations that are not your typical early tech adopters are adopting digital voice assistants, particularly older generations and visually impaired people.”
However, retailers must remember that voice is simply another digital channel to engage with consumers and needs to be integrated into a larger omnichannel customer engagement strategy.
“Sales through voice assistants generate transactional and behavioural data that retailers can use to optimise their strategies. Retailers will need to think about integrating voice into their brand experience online and in stores, and will need to develop strategies that can seamlessly move back and forth between screens and voice assistants,” says Stephanie.
As digital assistants are becoming more mainstream, a retailer’s brand voice, tone, and personality are being put under the microscope.
Oren Jacob said, “We cannot separate having a conversation from thinking about whom we are having that conversation with”.
Stephanie explains that when we are having a conversation with a computer, we automatically start to assign it human traits.
“When retailers think about their brand having conversations with customers, there are some important decisions to be made about brand personality. What accent do retailers give the brand - do retailers give the brand a broad Australian accent or perhaps a ‘posh’ British accent? Does that say something about what the retailer is trying to communicate as a brand? Do retailers give the brand a masculine voice or a feminine voice? What about the pace of the voice – is it extremely fast and excited or perhaps slow and relaxed? Retailers could also use sounds, music, or trusted voices to establish their overall brand personality.
“It is imperative that retailers seriously think about brand personality and what they want to look like and sound like to the world,” she says.
“AR is typically associated with vision and there are retailers using it in google headsets, through smartphone screens, and even magic mirrors,” she says. Stephanie says there are many great examples of retailers using AR to enhance the customer experience and make life easier for customers.
IKEA’s application, IKEA Place, allows users to see what a piece of furniture might look like in their chosen space. Products are in 3D and true to scale so customers can ensure it's the right size and design.
Sephora’s Virtual Artist, scans your face, figures out where your lips and eyes are, and lets you try on different looks. Customers can play with lip colours, eyeshadows, and false lashes. The app also offers virtual tutorials such as contouring, applying highlighter and creating winged eyeliner.
Timberland created virtual fitting rooms by using AR mirrors to let customers try products on more conveniently. They turned their virtual fitting room into one of the main window displays, which was a strategic move to drive more foot traffic. Shoppers stand in front of a camera and see a virtual version of themselves on a large screen. They choose different products to try on without having to step foot in the store or search for their size and go through the fitting room experience.
Stephanie says that AR will allow designers to move past simply imagining their product through 3D models, to experiencing the product and its applications, shortcomings and potential, long before they begin to build it. This will translate to lower testing and design experimentation costs, greater opportunities for innovation, and ultimately a better product with a lower price tag.
For retailers, AR delivers personalised experiences and increases consumer engagement by allowing customers to explore the features of a product, which helps in the purchase decision.
“AR is a new way of interacting with the physical world using technology. In the physical store, retailers can build deeper messages via AR in all in-store signage, have AR hosts direct consumers to specific areas within a store, and allow customers to try clothing or other products amongst other benefits.
As with most of the latest technologies, seamless payment aims to make the purchase journey as convenient and frictionless as possible for consumers.
According to data from the Reserve Bank of Australia’s Consumer Payment Methods survey, the percentage of cash payments in Australia fell from 69 per cent in 2007 to just 37 per cent in 2016.
When it comes to what customers want, the trend is towards tap and go and digital devices — there’s a desire for more speed and convenience.
Stephanie believes that heightened consumer confidence, a rise in proximity payments adoption, and ongoing developments in biometrics have collectively resulted in the payments industry’s digital transformation, which is expected to continue to improve driving more positive customer experiences.
A recent evolution in the payment space, and one that will continue to grow, is biometric payments. Alipay in China have begun trialing a system where customers ‘Smile to Pay’. A register recognises a customer’s face and charges a transaction to the credit cards stored against their Alipay account.
Another example of seamless payments is the recently launched Amazon Go store, which automatically tallies a customer’s shopping cart as they shop. Customers can add and remove items from the cart, and upon leaving their card tied to their account will be automatically charged. This technology removes the need for cash registers, check outs or a transactional interface at all.
“The days when a trip to the ATM was compulsory before strolling to your local shops are numbered. Instead retailers are faced with a new breed of cashless consumer and are adapting to suit,” says Stephanie.
The future of retail is exciting and the shift in shopping habits and consumer expectations is an opportunity for retailers to create refreshed retail propositions delivering new products, services and experiences.