Global Retail Executive Council

The intersection of technology and store design

I had the opportunity again this year to address the International Retail Design Conference on the subject of technology-enabled design two weeks ago in Toronto. Out of the conversations stemming from this presentation, it quickly became apparent that this is a major area of both interest and concern to retailers, as the opportunities to bring the disciplines together are immense... as are the potential challenges.

In that presentation, I explored 5 "Do's and Don'ts" of technology-enabled design:


1. Don't let your competition design your shopping experience.

Designers are used to thinking of the in-store experience as self-contained and in their control. No matter what influences a 21st century shopper may have been under OUTSIDE the store (marketing/advertising, ecommmerce, social media, etc.), once they step into the store, they're free of those influences. That's simply no longer the case, as competitors can (and do) connect with shoppers at the store shelf using tools like Amazon's mobile app. With two touches on their phone, a shopper can go from considering a product in your store... to purchasing it from Amazon, at a lower price and without the overhead of bringing the product to the shelf. This leaves retailers with a simple choice: step up and create a better mobile enabled shopping experience that keeps the shopper engaged with the brand both physically and electronically... or cede half the shopping experience to competitors.


2. Do start thinking of yourself as an experience designer.

The discipline of store design is changed by the addition of the new tools next-generation technology brings to the table. Technology has in the past been relegated to the IT department and design constrained to the in-store experience... and never the twain shall meet. The future of "store design" is taking the shopping experience and expanding the touchpoints beyond the physical elements of the store. Store designers must embrace a future where their "designs" are experience that touch the shopper at home, on the go, and in the store... not just physical elements within the store itself.


3. Don't think technology use is (too) generational.

It's far to easy to dismiss technology as something that only the youngest generation of shoppers embraces, and therefore not relevant to "our target shoppers." The truth is that shoppers of virtually all demographics are rapidly adopting new technologies into their lives, and retailers that dismiss incorporating technology into their store experiences run the risk of being perceived as increasingly irrelevant by ALL their shoppers, not just the young ones. The fastest growing segment of Facebook users, for example, isn't college students: it's women 45-54, and these tech-enabled mid-life women represent a powerful buying segment who are already FAR ahead of most retailers in their use of technology.


4. Remember that 50% of shoppers will be carrying smartphones in 2012.

The window of opportunity for retailers to take a "leading edge" or even "fast follower" role in embracing mobile technology is closing rapidly. Ecommerce players like Amazon and Zappos already have strong mobile strategies in place, and retailers deploying mobile solutions will quickly see the perception of their innovation shift from thought-leader to also-ran. Analyst estimates vary somewhat, but all project a tipping point within two years where the majority of shoppers are carrying and using smartphones. And retailers should keep in mind that on average, the demographics of their shoppers will skew slightly higher than the "average" American... so the percentage of smartphone users amongst their most important shopping segments will likely be even higher.


5. Consider a trip to Japan for inspiration.

While examples abound all over the world of retailers who are "doing it right" with store design, Japan alone has the unique advantage of a very well evolved mobile infrastructure. Near ubiquity (and universal compatibility) of smartphones that can read a single barcode standard, display information, and even allow payment means that shoppers in Japan are simply more used to using their phones in the shopping process than any other single market. From Japanese gardens to convenience stores to public transportation, Japan abounds with cutting edge examples of mobile shopping. The JAPANSHOP expo in March 2011 offers a unique opportunity to see the intersection of technology and design both from the retail industry perspective and examples scattered around in stores.


6. Don't be afraid to take risks; this is the time to experiment.

There is no right or wrong answer to technology-enabled store design, and what will benefit retailers the most right now is the willingness and ability to experiment and make (controlled) mistakes. The bottom line is that there are many new shopping patterns and dynamics emerging, and taking advantage of these new shopping ideas requires trying new things, measuring the results, and deploying those that work. Without both a willingness and ability to learn from those trials, retailers will relegate technology into old paradigms in the store... a fatal mistake that will let their competition leapfrog ahead.

Obviously, this isn't a complete list, but starting here will give retailers - and in particular store designers - a good foundation for begining to bring technology into the store.

The entire presentation, including slides and video, is hosted on our Vimeo channel, and you can view both parts - or an eight-minute shortened version - below.

IRDC 2010: The Do's and Don'ts of Tech Enabled Store Design - Part One

 

IRDC 2010: The Do's and Don'ts of Tech Enabled Store Design - Part Two

 

IRDC 2010: The Do's and Don'ts of Tech Enabled Store Design - 8-minute Short Version

 

Augmented Reality in Retail: An Overview

 What is Augmented Reality?

Augmented reality (AR) or mediated reality is a view of reality that is modified (possibly even diminished rather than augmented) by a computer.  AR is not something new to people - sports scores on TV during a cricket match or a Super Bowl is a good example for simple AR. 

The recent technological developments have significantly expanded AR’s scope. Current Augmented Reality is a next level advancement of last decade’s technology buzz - Virtual reality. Advanced AR technology captures information about the surrounding real world using currently available technologies such as digital vision (digital cameras). 

Artificial information about the real time environment and the objects in the system can be stored and retrieved as an information layer on top of the real world view. This information gets processed through the integrated Object/pattern recognition engine to make it interactive and digitally usable to users.

Augmented Reality Application

Currently AR is being used in the space of advertising, support with complex tasks (such as assembly), maintenance, surgery, Navigation devices, Military, emergency services, Prospecting, Architecture, Tourism, Collaboration, Music, entertainment, education and all other Industrial Applications.

Advantage of AR is that it makes virtual gadgetry possible. Any data-oriented physical device (e.g : clock, radio, PC, PDA, informational posters/fliers/billboards, in-car navigation systems, etc.) could be replaced by virtual devices that cost nothing to produce aside from the cost of writing the software. 

With AR systems getting into mass market, we may see traffic signs, Christmas decorations, advertisement towers and more. These may be fully interactive even at a distance, by eye pointing for example. 

Developments in Augmented Reality arena

Several technology firms targeting retail segment such as Microsoft, Cisco and Google and leading retailers are already testing ideas with this AR concept. Although none have been successful yet, few of the products / concepts such as high capacity mobile computing (e.g. iPhone & DROID) and Microsoft’s ‘Project Natal’   seem to be promising to take this technology mainstream in the near future. 

Many software firms such as Metaio, Apple and Spot Metrix, and have started developing AR-SDK that could help developers to build AR based applications. These SDKs support all major mobile platforms and features the latest image recognition technologies, 3D rendering for animations with real time interaction and optimized components for mobile hardware. 

With these toolkits, it is possible to easily develop and deploy solutions at the interface between the real and virtual world. They make it possible to create fascinating marketing experiences, intuitive information design, mobile augmented reality games or innovative retail solutions. 

Gaming and personal exchanges is another possibility for this exciting piece of technology. Families are tracking and sharing virtual experiences with this product. Avatar movie became a milestone in the animated 3D cinema arena, based on which the team built a website http://www.avtr.com  in collaboration with Coca-Cola. 

Technology companies such as Microsoft, Intel and Cisco have already invested heavily on the R&D in AR space. In addition to that there are new companies which have started to build AR solutions in collaboration with the industry leaders. 

AR comprises of multiple technologies – image capturing (through a digital camera), geo-location information (from a GPS-enabled device, or added manually by the user) and imaging-matching algorithms and Analytics. More technologies are getting added to this list which expands the list of possibilities as well. 

An AR-based experiment that enables the user to lift textures from real-world objects in live video and apply them onto 3D objects that are overlayed on top of them, is underway. The general idea could be extended to other types of 3D primitives or potentially even more complex objects with some clever image compositing and UV mapping. 

General Motors has been working with several universities to develop a working next-generation heads-up display that turns an ordinary windshield into an augmented reality information dashboard (AR windshield!). This would improve safety and advance knowledge behind the wheel, visually identifying important objects in physical space like road signs and the edges of the road you’re on in conditions of poor visibility. 

Mobile Augmented Reality

The mobile phone has become one of the most personal devices people own. It is something they always have with them, twenty four hours a day, seven days per week. There are many choices of mobile devices available, allowing people to choose the device that meets their needs. Today, these devices have so much more computing power, more memory, and greater flexibility, and the network is increasing its bandwidth and availability. 

Modern mobile augmented reality systems use one or more of the following tracking technologies: digital cameras and/or other optical sensors, accelerometers, GPS, gyroscopes, solid state compasses, RFID, wireless sensors.

Mobile augmented reality, while possible on current networks and services, will improve with better cameras on mobile devices and the launching of higher bandwidth services such as WiMAX. This is extremely likely to be the main way of access content in the future. 

Over the past year, the Mobile AR technology has reached the mainstream, with applications released for cell phones equipped with sophisticated positioning sensors. So far, most are geared towards tourism and navigation. Telecom technology giant Qualcomm opened its Austria research center, established for the design and development of augmented reality and related technologies. Similarly Nokia is also developing AR platform for their cell phones. Industry analysts expect AR to be used by more than 30% of the mobile workforce in next 5 years.

Also, it is expected that as the Tablet market gains momentum, possibilities for AR technology based solutions go beyond imagination.  

Augmented Reality in Retail

Any new technological advancement captures the immediate attention of retail technology experts and they start to think about the viability of using these technologies to improve customer experience. 

Although AR is a cool implementable concept, retailers approach it from 2 key angles – a) Can this be a competitive differentiator that create a buzz among the customers?  b) Will this be economically viable and does it have an acceptable ROI factor associated with it?

Augmented reality need to be integrated to web in order to yield great results. As more consumers turn to web, need for social content is climbing up. This includes product reviews, prior to making to a purchase. Recent surveys in the retail industry confirm that social content plays primary role in customer’s buying decision. 

Accessing or adding to this valuable Web-based social content repository is mostly limited to computers far removed from the site of the shopping experience itself. Mobile augmented reality applications, which extends such social content from the computer monitor into the physical world through mobile phones, providing consumers, information on products instantaneously to make buying decisions.

Augmented Reality would play a significant role in improving customer’s shopping experience. Being aware of this, many retailers and product manufacturers have already started developing and implementing solutions in the AR space (as an experiment).  Following are some of the interesting examples to look into. 

1. Ace Jewelers Group is the first online jeweler in the world in which people can try on jewels virtually via their website using, a revolutionary augmented reality retail tool, Holition. 
2. An innovative company called Zugara has developed AR Dressing Room and online shopping application in collaboration with RichRelevance -  Tobi.com an online retailer who has integrated “Fashionista” (solution from Zugara) to their website where shoppers literally give thumbs up (and down) to recommendations through webcam. 
3. With 3D animation "softwear", Cassetteplaya managed to successfully merge the real and virtual world and showcased augmented reality for the first time in the world of fashion, at London.  The designers are looking to make the AR “softwear” available to public so that customers can enjoy a tailored virtual experience in front of their computer or laptop webcam. 
4. Hugo Boss has created a large scale interactive augmented reality scene in their London shop windows. They were able to reach a much wider audience by integrating interaction with a store display in a unique and engaging way.
5. A new Digital Cosmetic Mirror, made by Fujitsu for cosmetic giant Shiseido and now being piloted in Tokyo malls - All customer do is sit down and let the camera scan the face. The terminal then gives tailored recommendations. Pressing a few buttons on the touch-screen paints make-up onto the captured image in real-time, allowing customer to see the results instantly.

Technology giants have understood the importance of AR in retail space. As a result, they have developed several innovative retail solutions that could engage customers in a better way and improve customer’s shopping experience. Augmented Reality was in Top 5 list of technologies that were showcased during NRF BIG SHOW 2010. 

• Microsoft in collaboration with Intel, showcased retail solution based on AR technology, where a shopper would see promotions that are appropriate for their lifestyle or needs. A store manager would see outages that influence their profitability. A category analyst would see useful product affinities they can deliver.
• Cisco has developed Augmented Reality based retail fitting rooms.
• Both Google & Microsoft have integrated AR into their map platform.

In the near future customers could simply hold a product box in front of kiosks that would display information to the consumers as 2D and 3D objects, texts or even videos. Also customers who walk by the stores could try out apparels, jewelry, accessories or foot wear in the store window without even getting inside the store. 

Conclusion 

AR technology is still at nascent stage, but considering the potential opportunities, in next few years will see more and more viable applications within the retail space.

With the help of AR systems, we may see virtual window dressings, signage and more. These may be fully interactive even at a distance, by eye pointing for example. 

Based on the current direction and pace of AR, it is clear that the AR technology would make a great impact on the Retail industry and the possibilities of solutions are infinite for customers’ dimension (Search & Seek) as well as retailers’ dimension (Serve, Sell & Service).

In future, customers might wear a AR digital eyewear that could provide information on the product you look at based on eye pointing.  Imagine something like Arnold’s AR vision in “Terminator-Judgment Day” Movie.

When I mean ‘future’, it is not very far from today!

Disclaimer: The opinions expressed here represent authors own and not those of his employer or the site where it has been published. As an upshot of having an open mind, thoughts and opinions expressed here may change from time to time based on the industry dynamics and social circumstances. 

References:

Wikipedia - Augmented reality

http://en.wikipedia.org/wiki/Augmented_reality

Hugo Boss uses augmented reality in window display

http://www.doctor-retail.co.uk/hugo-boss-uses-augmented-reality-in-window-display/

Beyond Mobile: Augmented Reality for Retail 

http://www.bluemaumau.org/beyond_mobile_augmented_reality_retail

Augmented Reality: 6 Use Cases for eCommerce & Retail

http://www.commercewiki.com/innovation/augmented-reality-use-cases-retail/

84% of Americans influenced by online customer reviews

http://www.bizreport.com/2009/04/84_of_americans_influenced_by_online_customer_reviews.html

Customer reviews influence cross-channel buying decisions, study says

http://www.internetretailer.com/dailyNews.asp?id=24361

Augmented reality hits the Catwalk

http://www.gizmag.com/cassette-playa-augmented-reality-fashion-show/14651/

Augmented Reality For Tablets Goes Where No Man Has Gone Before

http://inventorspot.com/articles/augmented_reality_tablets_goes_where_no_man_has_gone_39333

Augmented Reality Apps For Your Cell Phone

http://www.technologyreview.com/blog/editors/24147/?a=f

Augmented reality Cosmetic Mirror in Tokyo

http://www.japantrends.com/augmented-reality-cosmetic-mirror-in-tokyo/

Augmented reality: the next frontier of mobile retail? (Part One: Nike)

One of the most intriguing areas where a mobile device changes the game is the area of "augmented reality." Augmented reality describes where the position and orientation of a video camera on a phone is used to establish what is being seen on the screen, and computer graphics are overlaid on top of the video image the user sees to "augment" the real images. For example, holding your phone up and pointing it at a restaurant's menu might pop up translations and nutrition information on the items on the menu.

This concept holds truly massive opportunities for retailers to explore in their stores, and over the next couple weeks, we're going to bring you many stories of how augmented reality is applied to retail. Our first example comes from Hong Kong, where Nike did a particularly innovative campaign to create awareness of their T-90 product line by giving consumers an incredibly rich content experience... right in the palm of their hand and right where they were likely to be thinking about the product, from the soccer field to the retail mall.

Watch a video of the Nike augmented reality project at McKann...

Augmented reality may seem like science fiction, but it's here today... and easily available through some of the most popular smartphones out there like the iPhone. So retailers face a simple choice: understand how mobile retailing works now, or play catchup to more savvy competitors next year. Agree? Disagree? Either way, join the conversation at the inaugural GREC Mobile Retail Experience event at the fall CTIA Wireless IT & Entertainment conference in San Diego on 7 October 2009. Retailers, industry analysts, and technology experts will be gathered to explore how retail will adapt to - and ultimately thrive with - customers armed with connected smartphones in the store. We'd like to invite you to join us at this exciting event, and you can learn more about it at http://www.mobileretailexperience.com