Tech and the future of physical retail – a view from SXSW
Retail marketing has been a hot topic of discussion at SXSW so far. Rob Currie reports from the conference, with examples of how tech can save bricks and mortar retail.
Much has been made on the future of physical retail. Can it survive and thrive with the threat of ecommerce? Are we to see the death of bricks and mortar retail trading in the near future as online purchasing becomes the norm? The debate has raged across multiple platforms – and South by Southwest (SXSW) is no exception.
But instead of adding to the debate of one versus the other, it’s important to recognise that the two can work together, with mutual benefit.
Firstly, some facts from Emily Wengert, group VP, user experience at Huge, and PSFK who both spoke to the topic at SXSW this week. The message was clear: we are a way off any ‘retail apocalypse’. They pointed to the fact that only 10% of retail sales in the world are online and physical retail sales in the US continue to grow, (although department stores clearly are having challenges). Also discussed was a McKinsey report on China, a huge ecommerce market, which notes that “the appeal of ‘retailtainment’ has only increased in recent years. In fact, two-thirds of consumers say that shopping with family is the best way to spend time with them,” – an increase of 21% from one year ago.
On the flip side, BigCommerce’s ‘Omni-Channel Retail Study’ research shows that 96% of Americans now do part of their shopping online.
So what is really going on here?
It seems that there’s still a place for real physical retail – but perhaps not the retail that we have known in the past. This was best summed up at SXSW this week by Wengert, who predicts that “retail is not dead but boring retail is dead”.
In other words, physical retail needs to better embrace the key themes of blended technology and a branded experience in order to survive and thrive.
For marketers in retail, or with a product reliant on physical retail as a channel, what does this all mean?
Let’s talk tech first. We have all seen poorly integrated tech in retail. It either doesn’t work well within a physical environment, or it’s an iPad based product listing in store instead of actual product in store, or the content is about the brand and not helping the customer. Tech needs to support what is great about physical retail.
Here are a few examples to make the point:
In Mamas and Papas your child is matched to an animal character based on their weight which then matches to the car seat size.
An Italian supermarket can detect what fresh food you touch and then gives you information on the origins of the product. Another retailer can recognise what you take into the change room and suggest other matching products. The contactless and autonomous store is coming too, Amazon and Bingo Box being at the forefront of experimentation via facial recognition and phone scanning to enter.
The other area where the physical store can make a difference is design thinking to delight the shopper. The brief for your teams is to make the shopping experience memorable, unexpected and personalised. The museum of ice-cream in Japan includes life-sized replicas of their ice-cream cones – selfie heaven for customers. A fashion retailer helps you decide what bag to buy by providing everyday items you can put in it to test it out. Think about education and confidence building also – Apple is turning stores into workshop zones where you can skill up on new products and Lowes, the US hardware chain, is experimenting with VR demos of what your renovation might look like to help inspire you.
So the view from SXSW is this: The future of physical retail is not an argument of bricks and mortar versus online, it’s about providing your customers with a personalised or delightfully surprising brand experience that a more transactional online purchase will never match. It will be these experiences that will see the sector not just survive, but thrive.
Rob Currie is chief business director at WPP AUNZ.
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