Retail Is About to Be Reinvented, Driven by Digital Technologies

The Retail Store of the Future Will Become the Hub of All User Data

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At the Sport Check/Atmosphere store in Canada's West Edmonton Mall, Huge created an interactive retail experience with 470 digital screens.
At the Sport Check/Atmosphere store in Canada's West Edmonton Mall, Huge created an interactive retail experience with 470 digital screens. Credit: Huge

Since around the time Amazon Prime began offering recurring orders on things like toothpaste and dish soap, people have been predicting the death of traditional retail. The ease of e-commerce, coupled with the reliability and speed of shipping, made the future of local shops and already struggling suburban malls seem grim.

Recently, though, technological advancements in near-field communication (NFC), interactive display and mobile payments have been bringing buzz back to the retail store. With this technology, marketers are merging digital and physical worlds to create seamless, predictive, personalized, and delightful environments that increase sales and brand metrics. Retail is on the verge of total reinvention. And that reinvention is rooted in the user-centric practices of today's most savvy digital agencies.

Think of it this way: A brand is a galaxy, and all channels and touchpoints -- social, websites and branded content -- are planets. While a physical store is a planet, it's one with many circling satellites; an ecosystem with its own set of orbital forces. Digital agencies are already keeping brand touchpoints in sync, but the retail store of the future will become the nexus of all user data, informing the physical brand experience.

Understanding customers' intentions has, of course, long been the aim of retail architects. Paco Underhill, an environmental psychologist, was one of the first to use anthropological methods to determine how people interacted in public spaces. His methods of analyzing how people shop -- from the way they explore a space to where their eyes are naturally drawn -- have dictated how physical stores are designed. But now, smartphones and NFC have broken the levee. These two worlds are merging, and digital agencies will help redefine our baseline understanding of what a retail store is.

From a customer's point of view, there will be tectonic changes in how consumers shop. Aisles precariously stacked with products will be trumped by open, interactive experiences. The idea of standing in line gives way to individualized mobile payment on the customer's terms. Online scheduling will allow customers to walk into a store to find a rep waiting, armed with information. Shoppers will no longer have to stare down aisles, guessing if they're in the right place.

On this planet, the user's phone is the navigation system, mapping to-do lists to the layout of large-footprint stores with efficiency and grace. Exclusive and supplemental content delivered at the right time in the retail experience will motivate purchases. Ultimately, the customer will be in control of the amount and timing of interactions to allow for an ideal, low-friction experience.

From a sales perspective, being armed with customer preferences and behaviors will provide a new level of personal service. Representatives can truly anticipate user needs to create a surprising and seamless experience. Supply chains, armed with user data, usage data, inventory data and sales data, will redefine the idea of inventory. And with mobile payment and 3-D printing, even the idea of a store having a static physical presence becomes antiquated -- why not bring the store to the people? How about a Dyson pop-up store in Black Rock City (a temporary city that is erected each year in Nevada to host the Burning Man festival)?

From a brand perspective, you will never beat the cost-per-square foot of a website. So, we need to rethink the goals and success metrics of the store. The palpable nature of physical shopping will always instill a sense of confidence for the consumer, but what more can the digitally powered store become? An event space? A help desk? A gallery? A test kitchen? A collaborative workspace? All of the above at a moment's notice? These experiential spaces will provide a deep understanding of product benefits, with brand affinity becoming the true metric. A website or app will work in tandem with, rather than as a substitute for, a physical store.

It's easy to see how stores of the future would be natural extensions of agency work. With the inclusion of in-house, technology-focused architects, the successful retail design projects would follow all the patterns of digital product development. Agencies will be best equipped to lead this retail revolution, to evolve and adapt to the constant change that is occurring as millennials are quickly gaining purchasing power and hitting the high street.

Just as data science departments were initially seen as a fad, but are now essential for every project's success, the agency retail discipline will quickly become indispensable. Architects and interior designers will work side-by-side with programmers and brand strategists. And digital agencies will be at the center of this real and virtual design and build collaboration, charting the future of the experience economy.

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