A very short time ago, we saw the introduction of the Internet, smartphone, and tablet. All disruptive technologies that sparked billions in new revenue and changed the way we live and communicate, along with how we work and operate on a daily basis. These technologies paved the path for what we are about to see in retail over the coming years.
Brett King, best-selling author, likes to call it the coming “Augmented Years,” which promise a level of disruption, behavioral shifts, and changes that are unparalleled. He states, “Over 15 to 20 years, almost every aspect of the way we live our daily lives is set to change.” This level of disruption can be seen in every industry, including retail, and will have tremendous impact on the consumer experience, retail operations, security, and productivity of day-to- day workers.
While it is important to look at trends spanning the retail industry as a whole, three key areas poised to have a major effect on retail by 2026 include hyperconnectivity, wearables, and augmented reality (AR). All will play a major role in the evolution of retail over the course of the next decade, according to a new Ovum study.
Hyperconnectivity means everything is talking: person to person, person to machine, and machine to machine. According to Ovum’s study, hyperconnectivity will create new dynamics in retail. By 2026, consumers will be living in a hyperconnected, high-speed world where the Internet of Things (IoT) will be part of the everyday fabric of life. In retail, we will see hyperconnected devices such as display cabinets and smart product tags, enabling retailers to track, demand, and report on stock levels in real time, improving supply chain effectiveness.
Indoor and outdoor digital signage equipped with sensors will also enrich consumer engagements in retail. Content and advertising streamed to connected displays in stores will be adapted in real time to anticipate and target the needs of consumers based on local conditions, such as geographic location, time of day, and weather.
There will also be a rise in connected appliances in smart homes that feed into services such as Amazon’s Dash Replenishment Service (DRS). With DRS, customers can order direct from the appliance and have products shipped right to their homes, in seconds, without having to create long grocery lists and wait for the next time they visit a store.
Through hyperconnectivity, retailers will need to rethink many of their fulfillment services and in-store interactions. We will begin to see devices used for much more than a basic gift registry, endless aisle, or mobile point of sale (POS). Devices, appliances, and products will explode into multi-dimensional layers enriching customer experiences and streamlining operations from the front of a store, home, or office to the distribution center. As retailers look to prepare for this momentous shift, they need to be looking at their current IT infrastructure and device portfolio.
Wearables will become a platform for mobile commerce. The number of wearable devices coming to market is swiftly increasing. Ovum expects the installed base for wearable devices to reach 650 million by 2020. For retailers, this means more consumers will be wearing devices such as smart watches when coming to stores. These smart watches will store important payment, personal identification, and shopping behavior information. Tap-and-go mobile proximity payments, where consumers will no longer need credit cards and signatures to make a purchase, will become the most common transformation use case. Through wearables, facial recognition and biometric technologies will be instituted when a customer buys a product, increasing security and accuracy at checkout.
For mobile advertising, wearables will be a source of data insights and new types of behavioral and usage data. They will have the ability to capture a wide array of data related to a user’s contextual activity, health, and emotional state. The information collected can be used to tailor both products and marketing messages.
Augmented reality (AR) may have the greatest impact on the retail experience by 2026. In retail, AR is thought to blur the lines between online and in-store shopping experiences by offering online customers an in-store experience. This will eliminate the hesitation many online shoppers have today, allowing consumers to virtually try on clothes and jewelry from the comfort of their own homes. With this capability, it is believed that AR will help decrease returns on products such as clothes and home furnishings because consumers can virtually see the items on their bodies or within their home environments.
For example, Lowe’s Home Improvement Store implemented the Holoroom to transform the in-store experience. Burberry, is another great example of how retailers are bringing together the physical and digital world to transform the shopping experience. In London, Burberry opened their largest, most technologically advanced store in the world. The purpose is to provide an enhanced and interactive experience for customers. The store incorporates digitally-enabled galleries, 500 speakers, and 100 screens, including the tallest indoor retail screen in the world. Devices, screens, and speakers are set to synchronize throughout the day to engage customers and enable disruptive digital takeovers.
Change is Coming
It is inevitable that a change is coming in retail, driven by the growth of digital technologies and consumer adoption rates. In order to remain competitive and relevant in the market, retail leaders must prepare their organizations and brands with a digital strategy to be executed in phases over the next decade. Working together with VMware, retailers can implement digital solutions to address key market trends, including hyperconnectivity communication, wearable enablement, and augmented reality management.
To learn more about VMware and how 19 of the top 20 retailers are using The Secure Digital Workspace for Retail powered by Workspace ONE visit www.vmware.com/industry/retail, and watch the video below.