Predictions about retail are always a risky business.
In December the CBI reported that 37 per cent of retailers recorded an increase in sales volume for the month, compared with the same time last year. This news arrived despite the so-called squeeze on household incomes that was supposed to be depressing sales.
Statistics aside, what can we expect to see from retail in 2018? Here are my thoughts.
Physical stores will continue to thrive
The physical store is alive and kicking and set to be given a real uplift by the implementation of some dazzling new technologies.
Our research has found that 81 per cent of UK consumers see the physical store as vital to shopping and 70 per cent say they enjoy the full experience of going into stores to browse, see what’s new and buy what they like.
So it is clear that bricks-and-mortar stores are still very much the lifeblood of retail. Those who believed ‘showrooming’ was the future of the high street may have to think again.
Physical stores will continue to evolve as will the technology they deploy. Too much is read into retail failures and not the success stories. There are some amazing examples of retailers that have made their physical stores very much a part of their online success story and others are sure to follow. It is instructive that despite tech gurus predicting the end of the traditional till and a move to mobile payments, we see many retailers upgrading their trusted workhorse to the latest high-spec point-of-sale systems. Why? Because it gives them a greater range of functions, together with more processing power and enhanced reliability.
Artificial intelligence makes life easier in-store
Artificial intelligence (AI) has almost limitless potential and many store chains are going to expand, or experiment further with its deployment. It is most commonly encountered by consumers in chatbots and voice-activation technologies such as Amazon Echo or Microsoft Cortana. In stores we can expect to see more use of voice-activation technologies by staff to provide instant access to information about products and services via a headset, saving time for customers.
AI-based virtual assistants and applications will also remove a lot of queuing by enabling consumers to pay quickly on their smartphones. Our research has revealed that consumers like the idea of using AI-powered, in-store screens (known as kiosks) to search out products that fit their needs but which they were not previously aware of.
Voice-recognition will continue its move into the mainstream
Throughout retail, voice commerce is a hot technology. Voice-recognition technology combined with artificial intelligence (AI), is now so effective that any instruction, request or command that you would have typed into a search engine can now be spoken. Intelligent, voice-activated systems can search for items and complete purchases without physical contact.
Voice commerce will continue to revolutionise the way in which we use the internet and buy goods and services online.
Contactless cards are not the end of the payment revolution
Over the last 24 months the public has been switching heavily from cash to cards for purchases, but while retailers and retail services companies are all bending the knee at the altar of the contactless card, I’m reluctant to believe the hype. I believe that we’re on the verge of a breakthrough that will see the plastic card side-lined to make way for far more convenient methods of payment, probably based on smartphone apps.
While contactless payment technology is relatively new to market, the plastic card is a fairly dated payment format. In an age where convenience is the driver, a payment that requires the consumer to carry an unnecessary item is surely due for extinction. Whatever form they come in, the advantages of faster payment methods will make a noticeable difference on both sides of the counter.
AR and VR will enhance the retail experience
The picture is similar with virtual reality (VR) and augmented reality (AR). VR headsets, which create an incredibly immediate but entirely artificial 3D environment, are increasingly part of the infrastructure of gaming.
Yet for the moment, VR in retail tends to be restricted to providing spectacular promotional experiences, such as test-driving a car in dramatic landscapes. AR, on the other hand, will continue to expand. This combines reality with the artificial images generated by the software and has more direct impact on helping shoppers make exactly the right purchase. We can expect to see more AR in stores, whether it is smart mirrors that allow customers to see themselves in clothes without trying them on, or smartphone applications that overlay furniture and accessories in the store on a 3D image of the consumer’s living room.
Whatever the vagaries of retail, it is certain that technology will be the driver of its continuing prosperity. There is no reason for much of the gloom that encircles retail news.