For many shoppers the end of the year signals a clamour for bargains and plans for big new year projects like home renovations. For retailers, this means potential for big business. So how can retailers maximise this peak sales period through new technology?
Technology has revolutionised the retail sector as ecommerce continues to close in on becoming the most favoured shopping method for UK consumers.
Despite economic uncertainty, online retail sales at the end of this year are expected to hit more than £60bn, up 14.9% compared to last year, according to the Centre for Retail Research.
New technologies like artificial intelligence and mixed reality platforms are poised to boost the growth of ecommerce and mobile commerce to new heights and completely revolutionise the idea of customer engagement.
2016 has arguably been a breakthrough year for virtual reality (VR). Some retailers have already spotted an opportunity here by investing in great brand experiences in store for their customers which are beneficial for awareness and loyalty. But I'd argue none have successfully harnessed the technology to improve online sales. The next big step will be for retailers to identify how VR, augmented reality (AR) and artificial intelligence (AI) can be used to improve the shopping experience for customers and in turn boost profits.
By embracing these advancements and pioneering new developments, UK retailers are standing on the edge of a new age of online shopping, with platforms able to learn and predict consumer purchases, and even allow them to 'try on' products in their own rooms before buying them.
AR is set to come into its own in the new year and become the standout tech of the year in the retail sector. While VR has so far been the popular choice for headlines in the mixed reality battle, from a commercial standpoint AR is where the real opportunity lies. Rather than immersing consumers in entirely new worlds, AR allows them create virtual layers on top of what they see in front of them. A key trigger point for AR is likely to be the introduction of the iPhone 8 in November which is rumoured to support revolutionary AR technology.
From a business perspective this will revolutionise the customer experience by allowing consumers to place new products, or remove existing ones, from their rooms or virtually try on clothes from online retailers.
In the online fashion space, there is arguably a clear opportunity to solve the 'problem' of consumers not knowing if a garment will fit or suit them before they buy.
We've already seen online retailers dipping their toes in the water in this area, from changing the look of a floor to redecorating entire rooms to fashion labels allowing consumers to virtually try-on products they see online to check sizes and appearance, but none of them have successfully seen a spike in sales as a result.
In 2017 and beyond, retailers keen to capitilise on the latest tech should think about their end users and the specific problems they face. Then identify ways in which technology could provide a solution.
Our team at DigitalBridge have focussed on a specific problem in the home décor sector which research shows consumers face - the 'imagination gap'. This occurs when shoppers delay or decide against buying items like wallpaper, carpets or furniture as they can't picture what it will look like in their own homes. These are often high cost items and consumers are fearful of making the wrong decision.
A YouGov survey commissioned by DigitalBridge during our initial start-up phase revealed that 70% of customers had experienced this problem in the past, with many saying the mental block has stopped them from making purchases. This should spark concern for retailers in this space, with so many potential sales falling through as a result.
If retailers can embrace tech in the right way to respond to specific consumer issues like this, they will be onto a winner in 2017. In the background some pioneering tech start-ups have been working to bring mixed reality into the commercial arena and boost the bottom line for businesses that are able to take advantage of it. I predict that being able to take an image on a smartphone or tablet and use AR to place new products within that environment, with products automatically scaled, will become closer to the norm by the end of the year.Suggest a correction