Jewelry Industry and Retail News

5 Technologies Transforming Retail in 2018 - 2/5

From artificial intelligence to blockchain, five important innovations can help fashion businesses make their processes more efficient, enhance user experience and offer an improved overall customer value proposition.

2017 was the worst year on record for brick-and-mortar retail. By December, more than 6,985 stores closed across the US, according to retail think-tank Fung Global Retail & Technology. That’s up more than 200 percent from a year ago, according to the firm’s findings. It also beats the previous all-time high of 6,163 store closings that took place during the 2008 financial crisis, according to estimates by Credit Suisse.

The reality is that many stores are closing for the same reason they’ve always closed — they simply don’t meet the needs and demands of customers. But at a time when consumers are empowered with choice and market conditions are increasingly volatile, new technologies can help brands and retailers drive valuable business efficiencies, and improve the overall customer experience and value proposition.

“The biggest upside to technology in fashion will be the ability to offer consistency, and being able to personalize the customer’s shopping patterns,” said Robert Burke, chief executive of retail consultancy firm Robert Burke Associates. Indeed, fashion companies that effectively deploy the right technologies will be able to enhance their competitive advantage by personalizing products and shopping experiences, and refining logistical processes that nibble away at budgets.

However, fashion has been slow to harness many of these opportunities. “We’re only scratching the surface right now of technologies like virtual reality or artificial intelligence,” said Doug Stephens, a retail industry futurist and author of “Reengineering Retail: The Future of Selling in a Post-Digital World.” “But directionally, we can already envision a point where the margin of error for consumer shopping for clothing — both online and offline — will be almost nil.”

Here in this short series, we spotlight the five important technology innovations that can help brands and retailers boost their businesses.

2/5 Augmented Reality

Augmented reality’s roots go back to 1992 to a US Air Force-funded project, called Virtual Fixtures. The technology, which offers a real-time view of one's immediate surroundings altered or enhanced by computer generated information, was designed to help surgeons operate remotely, while enhancing their accuracy, by seamlessly blending in real-world information such as the location of major arteries. It improved performance by up to 70 per cent.

Augmented reality (AR) has evolved a lot since then, but often, it is still treated as a novelty rather than to solve real problems in fashion. For example, when Burberry launched an augmented reality feature, the tool was designed to interact with user’s cameras feeds to digitally redecorate their surroundings with Burberry-inspired drawings by artist Danny Sangra. The capabilities of AR are so much more, and could be a significant sales tool for the retail industry.

Unlike virtual reality (VR), AR has lower barriers to adoption. Unlike the latter, it does not require dedicated hardware as it is built to work with smartphones and tablets — devices that are already available to most consumers in the developed world. “AR capabilities are now available on over 300 million phones worldwide and it will be up to 1 billion by the end of 2018, especially as Google’s AR software, ARCore, comes online,” said Ari Bloom, chief executive of San Francisco start-up Avametric.

Unsurprisingly, beauty brands have been early to AR. L'Oréal is among the many cosmetics companies offering AR-focused apps, allowing for convenience and eliminating the mess of testing physical products in stores. It’s a move that is working: More than 20 million users have downloaded L’Oréal’s Makeup Genius app, whose AR function lets people test combinations of beauty products on their phones. Beauty app Meitu helped drive sales for Charlotte Tilbury: 13 percent of users who tried the lipstick through the app in 2017 clicked the "buy" button.

Some fashion brands are starting to explore the opportunities. In January 2017, Gap unveiled a digital dressing room, developed by Avametric in collaboration with Google, which allows consumers to “try on” clothes without having to step into a store. Eyewear brand Warby Parker uses a combination of facial recognition and augmented reality, so customers can see what they look like in different frames. In January 2018, Amazon patented a smart mirror that uses AR to virtually overlay clothes on to users, to help stylise their look.

“It’s the ideal mix of digital technology living in the physical world,” said Bloom. By letting customers try clothes on virtually, the experience places no restrictions on the number of items that can be tried on, which means that customers may easily be persuaded to explore more items of clothing than they normally would in-store. It can also suggest clothing based on known user preferences or whatever is popular at the time, allowing for customers to broaden their horizons. As for online retailers, it could reduce the number of returned items, an industry-wide frustration.