What does the future of retail look like?

David Ripert, CEO and co-founder of Poplar Studio

The nation is eagerly awaiting the full lifting of restrictions this summer, and retailers will be anticipating a boost in footfall as a result. The real question is whether consumers will revert back to shopping habits pre-lockdown, or maintain the ones they’ve developed over the last year. As we know, online shopping greatly increased (48% on the previous year) throughout the pandemic and the competition to stand out from the digital crowd for brands and retailers has been a weighing pressure. 

One way that they have done this is through utilising technology such as augmented reality (AR) and 3D modelling to enhance the digital customer experience. The technology is enabling consumers who have been forced to spend time at home to recreate the in-store shopping experience through visualising products in their own environment (eg. furniture) to see if they fit, without having to purchase and return them, as well as provide more accurate 3D models of products instead of 2D photos to give a realistic idea of shape, size and colour. Regardless of the pandemic, this will become a more and more desirable use case as it saves time, effort and even money. Visualising cosmetics products on your own face, for example, while online shopping has become a tool used more frequently by marketers and brands and will likely become a regular stage in the customer purchase journey, both for ease of not having to try on lots of samples and to save on returns as well as from a health and safety point of view.

Digital is here to stay, but in-store shopping will return

So how does this look in terms of statistics? According to a recent report by Shopify, 88% of UK consumers did at least half their shopping in person prior to the pandemic. That number dropped below 50% during lockdown, as would be expected, but is poised to return to around 75% post-pandemic. The fallout of the 13% decrease in retail shopping post-pandemic means that retailers need to understand that in order to encourage shopping in-store, they need to change their approach and offer customers the value they get from digital shopping, but in a physical space. AR has allowed customers to visualise products in their homes, or clothing and cosmetics on their bodies and faces. Embedding these technologies into a hybrid retail model will provide the best experience for customers from both the digital and physical journeys. 

Post Pandemic Trends

Consumers will naturally return to shopping in-store post-pandemic, but it will unlikely to be to the same levels as previously.  63% still favour health and safety measures like masks/social distancing in store with 51% of consumers expecting to shop locally more often post-pandemic than they did before. With these figures, it’s likely that the in-store shopping experience will return and help salvage what remains on the high streets, with a clear win for local independent stores. With 68% of consumers indicating that the main reasons for shopping locally are convenience, supporting local business owners, and proximity, the local high street will benefit from these purchase decisions. Businesses should look to be offering multiple fulfillment possibilities and experiences to your customers, by blurring the lines between traditional and online retail. The AR retail hybrid model will play an important role in enabling shoppers to make a decision prior to going in store.  

71% of consumers expect retailers to offer an AR experience. Customers are aware the tech is available to retailers and are beginning to expect this level of engagement and convenience for online shopping. This is a great way for brands to get creative with the way that they use innovative technology in their e-commerce strategies as well as their in-store approach. We’re seeing more ecommerce-only brands turning to AR to improve the online shopping experience (eg. Murus, a company that sells artwork, is providing links to AR experiences through 3D modelling for their entire catalogue, so people can visualise it in their walls before purchase).

The advancements and common practice of the technology let customers visualise a product to see if it fits or how much space it takes. A washing machine or a TV is a big purchase, not only in price but in space too – AR alleviates the worry of something looking out of place or not being a right fit and enables the consumer to make a clearer decision. 

In a world where retailers are vying for customers’ attention, personalisation sticks out. AR gives people the opportunity to customise a product and visualise that customisation before buying it (e.g. a Nike shoe), or even learn about a product. For example, if someone is considering purchasing a new Mac computer, through AR experiences the product opens up to show the inside, and Nespresso coffee machines show how the product works on the inside with 3D animations. People can now visualise more options for products than retailers may be able to showcase in store, such as virtual showrooms for kitchens, bathrooms and garden furniture. Beyond shopping, brands continue to engage their customers throughout the world of entertainment with the ‘share’ ability developed by social platforms. As an example, if you’re at a football match you might be prompted to scan a mural in a store or venue to bring your favourite player to life in front of you with Snap, or engage with a face filter that can be shared with your network and friends across social media. We’re seeing more brands incorporating AR into their marketing with platforms like Instagram Shops and taking advantage of social retail (where users shop within the social media app). 

Viewing 3D models in AR increases conversions by up to 200% – AR increases customer engagement by 66% and there is a 40% decrease in returns from 3D visualisation. For retailers to increase their chances of repeat business, AR is a crucial part of the customer journey. From introduction, awareness, product, consideration, purchase and then telling their story, AR is pivotal throughout. 

It’s important that retailers set themselves up for success and the ability to meet customer expectations with alternative means of experiencing a product in store, which can be enhanced and facilitated through AR.

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