Is AI the next step for stores?
In the first half of 2017, over 2500 high street shops closed their doors across 500 UK towns and cities. It seems like a bad time for bricks-and-mortar, but is it all bad news? While it’s true that many household names are trimming the fat by closing underperforming branches, e-commerce is taking a surprising turn.
From clicks to bricks
A slew of online retailers have followed in the footsteps of Amazon and opened physical shops, including men’s clothing label Bonobos, cult makeup brand Glossier and fashion retailer Missguided. It’s a bold move to roll the dice with expensive physical locations when the high street is struggling.
Over 2bn people use their smart phone or tablet to shop online. Yet there’s still plenty of demand for physical shops: 95% of users enlist the help of their devices to look up local information like branch locations and opening times. A search on a mobile device is more likely to bring up details for the nearest branch before a retailer’s official website. This, along with services like click & collect, makes it seem like tech is working as much in favour of the high street as against it.
The conversion conundrum
The problem is that getting people through the door is only the first step. Once inside, customers are returning to their smart phones to cross-check prices and surf online for a better deal. So, what can retailers do to bump up conversion rates and prevent bricks-and-mortar stores from losing out to e-commerce?
“Taking advantage of the ‘real world’ situation for a consumer, when they are in a store, is a big benefit for retailers and brands,” explains Martin Kelly, MD of Big Group Retail, award winning forerunners of international design, development and project management in retail. “With the continued expansion and development of the consumer class on a global scale, the pace is not set to slow down for many decades to come. Connected consumer engagement and enhanced retail experiences are fast becoming the driving factors in this new retail landscape.”
‘Connected consumer engagement’ could translate to bringing cutting-edge technology, such as virtual changing rooms, interactive digital display screens and proximity beacons, onto the shop floor. Bridging the gap between physical and digital shopping to boost the customer experience could be just the ticket. But is it enough?
“Far too few [retailers] are doing anything radical to reinvent themselves,” says RSM UK partner and Head of Retail, Andrew Westbrook. “Just slapping up a website and offering click and collect is not enough. It needs to be far more radical than that.”
Rise of the machines
For many, ‘radical’ in retail translates to artificial intelligence (AI). A study by IFTTT projects that by 2020, retailers will have increased their spending on AI by 53%. AI is already making waves in e-commerce. Assistants like Amazon Echo’s Alexa, Apple’s Siri and Google Home are revolutionising the way we shop at home, and brands like H&M, Domino’s and North Face have been using bots on messaging apps for the last year.
Customer-facing AI bots appear to be the logical next step. Retail chatbots appease the demographic of shoppers that turn first to social media for assistance, before customer service helplines or in-store employees. Customers can communicate with chatbots via voice commands or touch screens, without using data or downloading apps. The chatbots answer simple questions, recommend products, check real-time inventory and help to locate items. Cost-effective and efficient, AI seems like the perfect solution.
A big revolution
However, Big Group Retail believes that survival of the fittest will boil down to far more than just cutting-edge technology. “The only way to gain traction as a retailer in 2018,” Kelly says, “is to bring together the competitive tech of tomorrow’s high street and the human interaction that keeps customers returning to physical shops today.”
Formed in 2017, Big Group Retail is the result of 30 years’ expertise in 3D retail design, consumer experience and technology innovation, and merges Frontline Display International, m4 and Big Group Limited.
Kelly adds, “What makes us different is we can deliver the ‘visionary future of retail’ today – it’s a really exciting time for brands and retailers, and we are at the forefront of bringing the physical and digital retail worlds together.”
Big Group Retail will be at Retail Design Expo, Olympia London 2-3 May. Visit Stand D221 for a chance to win VIP tickets to the Hyundai Mercury Prize 2018!