Customisation and innovation: the pathway to the future of retail

One way of innovating the retail shopping experience is augmented reality – the superimposition of digital information on the in-shop sensory experience. Spanish retailer Zara staged a pop-up pilot project taking augmented reality to 130 of its flagship stores around the world during the second half of April.

Something as simple as being welcomed to a shop with a “Good morning, how can I help you?” could soon be a thing of the past, or, at least, not hearing it from a person but a robot that customises the interaction according to the data the establishment has on the customer. Even now, both the role played by the shop assistant and the management of online information and purchases are fundamental.

“Retailers are working to provide a seamless experience for customers, between online and offline shopping. We are now seeing customers browse online and pick up in the store; or visit a physical store to touch and feel the product and then purchase it online,” explains Barbara Kahn, professor of marketing at The Wharton School, University of Pennsylvania.

Building a strong brand that the consumer can identify with and a supportive brand experience is one of the approaches retailers are taking to adapt to these changes. “Retailers like Eataly, which offers premium Italian restaurants, cooking schools and groceries all in one space, provides an experience that is difficult to copy,” says Kahn.

Amazon is also tapping into the trend of “shaping the future” of retail. In January of this year, the online retail giant opened the highly-anticipated Amazon Go convenience store at 2131 Seventh Avenue in Seattle. It has a staff of cooks and assistants who recommend products, but no cashiers, and no checkouts, because the shop is equipped with an automatic payment system using weight sensors on the shelves and a network of cameras that recognise the items selected by the customer, who has been given a QR code.

“Generally, retail shopping is booming in the e-commerce sector, creating jobs in delivery, packaging, warehouse management, logistics, and, of course, opening markets for producers outside of the main retail chains,” says Irmgard Nübler, senior economist in the Research Department of the International Labour Organization (ILO).

“Voice user interface and artificial intelligence will replace some retail jobs but probably spur more consumption overall due to better information efficiency between demand and supply at the micro level.”

Big opportunities also mean big challenges. Following a string of strikes for decent working conditions in Germany, Italy and Spain, Amazon worker representatives from several countries – including several non-European ones – met in Rome at the end of April to create a common front, largely headed by Italy, France and Spain.

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“We are going to work together. We are all confronted with the same problems, be it health and safety, collective bargaining or work-life balance. They are the same, wherever you are, whichever way you look,” said Douglas Harper, the CCOO union representative at the Amazon logistics centre in San Fernando de Henares, Madrid, who attended the meeting in Rome.

Cross-border purchases, robotics, artificial intelligence, augmented reality…

To protect consumer rights, in February of this year, the European Parliament approved, with 557 votes in favour, 89 against and 33 abstentions, the removal of barriers to cross border e-commerce in the EU. Under the new rules, buyers will be able to choose which site they wish to buy from, without being rerouted to another website or blocked based on their location, country of residence or the place where their credit or debit card was issued.

The regulation will apply to the sales of products such as electronic goods, fashion, domestic appliances and tickets to sports events, music festivals or leisure parks. Products protected by copyright, such as video games, e-books or downloadable music will, however, be excluded for now.

Day by day, the sector is evolving towards omnichannel retailing, a mix of physical and digital experiences. “Customers will be looking for the best on offer in terms of the physical experience (humanisation, customised attention) and the most up-to-date in terms of the in-store technological experience (the latest trends and technological innovations). The store’s success will lie in finding the right mix between human and digital service,” says Raquel Roca Albertos, a consultant, speaker and author of the book Knowmads. Los trabajadores del futuro (Knowmads. The Workers of the Future).

What will technology offer customers? “It will offer new experiences: fun, surprising and innovative experiences that also ‘make life easier’. Smart fitting rooms, for instance, that take your measurements with a scanner and allow you to try clothes virtually; access to a huge digital catalogue; real-time product customisation; interaction with robots (as part of the experiential game); sensors that detect your mood; storytelling (through videos, music, etc.); virtual payment allowing you to skip checkout queues; smartphone interaction to keep the connection going after you leave the shop (games, prizes, etc),” explains Roca.

Robotics and artificial intelligence are entering our lives almost without us realising it, according to Mónica Muñoz García, a founding partner of The Innova Room, a consultancy firm specialising in space design and innovation. “From robot-run hotels to customer service bots, coming across a real human voice is increasingly rare.”

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One way of innovating the retail shopping experience is augmented reality, the superimposition of digital information on the in-shop sensory experience.

“This opens up huge scope in terms of ethical and responsible consumption, healthy consumption, product labelling, the supply chain, carbon footprint, etc, given that customers can access all this information in real time and use it to make their buying decisions,” says Muñoz García.

Spanish retailer Zara staged a pop-up pilot project taking augmented reality to 130 of its flagship stores around the world during the second half of April. The shop windows, in-store podiums and the online order delivery boxes were converted, through the Zara AR app, into stages on which models Léa Julian or Fran Summer were brought to life on each mobile device. Customers were able to make online or in-store purchases of any of the items modelled by clicking on them.

The role of shop assistants will evolve to the point that they become ‘facilitators’, showing customers how to use the new technologies, ironing out any inefficiencies or tensions that may arise during the buying or collecting process. “The staff will have to update their skills to be able to take on new roles related to analysing the buying process, alongside their interpersonal skills,” says García Muñoz. “They will become leaders of their shopping community, experts and perhaps even co-creators of relevant content for their customers.”

Should workers be worried? For Nübler, the answer is no: “New technologies and innovations are not deterministic, and the destruction of jobs in retail will trigger the creation of new jobs in different sectors and in new production modes.”

“This requires the transformation of economies and such transformation is not automatic. They require societal learning, and new political choices. Fiscal and wage policies that redistribute productivity gains from innovations and increase demand for customised goods, for example, will create new jobs.

“Education policies are instrumental in transforming mindsets and consumption patterns, and the way shopping will be organised in the future,” she concludes.

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