How AI, AR & VR Impact Retail in 2018 (apocalypse not included)
Way back in 2017, retail industry analysts predicted a “retail apocalypse” due to the number of brick-n-mortar retailers that closed their doors. So far, however, the four horsemen of 2018 have not yet been summoned. Quite the contrary, in fact. Today, more businesses than ever are leveraging artificial intelligence (AI), augmented reality (AR), and virtual reality (VR) in retail to find new ways to attract and engage customers.
Here are just a few ways retailers use mobile and emerging technologies to commingle brick-n-mortar and digital experiences.
Artificial Intelligence (AI)
(aka machine learning)
Consider the explosive growth of interactive voice technologies like Alexa, Google Home and Siri. This recent “Future of Retail” study by Walker Sands states that twenty percent of US consumers made a voice purchase through Amazon Echo or other digital home assistant in 2017, while 1 in 3 plan to do so in 2018. Furthermore, according to Gartner, a whopping 85% of retail customer interaction will be managed by AI by 2020.
Nearly one in five consumers have made a voice purchase through an Amazon Echo or other voice-controlled device in the past year.”
These statistics suggest that one of the top enterprise technology investments in 2018 will be AI, and in learning ways to leverage it to create novel customer-centric experiences. Further, AI can be used to leverage the data captured by retailers to suggest answers to future queries or predict possible outcomes. AI technology can also optimize customer relationship management and shopper recommendations. And this is just the tip of the iceberg.
Augmented & Virtual Reality
In 2018 we also expect to see more retailers leveraging augmented and virtual reality (AR/VR). In fact, if you can believe it, Gartner predicts as many as 100 million consumers will shop via AR by 2020.
By 2020, 100 million consumers will shop in augmented reality.”
AR in retail isn’t all that new, IKEA began using it all the way back in 2013. And Lowe’s started leveraging ARKit last October. But the reason AR is starting to gain traction is because it delivers a simple, intuitive, high-value user experience for consumers (e.g. using your smartphone’s camera to place a virtual couch in your living room to check the size and see how it looks). The adoption of AR will be an invaluable tool for retailers by providing insight and information supporting consumer buying decisions. Using AR applications to layer digital information-text, images, video and audio-on top of the physical world, represents an easy route to deeper engagement, both in-store and at-home (and basically anywhere else).
With AR impacting consumer engagements in 2018, VR should also start to gain adoption by retailers this year. For retail, nothing is more asset intensive than the decision to remodel or redesign a store layout. Retailers will use VR primarily for testing a variety of store layouts, display concepts, category sets or other retail strategies before making major investments that may not achieve the desired results.
The biggest impact VR can provide in retail, however, involves the application of analytics to a VR experience. For example, an executive sitting at his desk in the corporate headquarters can use VR to stay in touch with the business by virtually walking through a store to see how it’s doing. Posting analytics through a VR interface that incorporates the store’s actual layout provides important context and may reveal potentially useful-yet previously hidden-information which might not be easily revealed by looking at a chart or graph. Like connections between product categories that are physically proximate, for example.
The bottom line is mobile and emerging technologies can and will impact retail significantly this year. However, retailers still need to do the legwork to determine how to best leverage these technologies and explore strategic partnerships to improve customer engagements and business viability. Don’t know how to get started developing an AR solution that will deliver high value in your retail ecosystem? No worries, just contact us. Propelics has helped countless retailers improve operational efficiencies and strengthen their connect with customers by designing engaging customer experiences that delight users and drive business growth.