Article

Reimagining the future of retail

By Susan Lahey/ Michael Schweidler

Published December 2, 2020
Last updated December 4, 2020

Virtual Reality and Augmented Reality have been creeping into retail for years, but COVID-19 has thrown them onstage and into the limelight long before their scheduled appearance. UK-based retailer Asos has been accelerating the rollout of its augmented reality (AR) “See My Fit” tool this year that allows shoppers to view an item on various models of different sizes and on different body types. The technology is intended to ensure “product presentation remains as realistic and engaging as possible while supporting social distancing by removing the need for models to enter the ASOS Studios.”

French cosmetics and beauty retailer Sephora already let customers that do virtual makeovers on their phones, trying different skin care and makeup products without having to wash their faces in-between. Zeekit, an Israeli startup that uses military-inspired mapping technology for fashion, exploded from having a few brand customers to preparing to open its own marketplace.
Zeekit, an Israeli startup that uses military-inspired mapping technology for fashion, exploded from having a few brand customers to preparing to open its own marketplace. In the meantime though Amazon has come up with it’s own version of AR fitting rooms, too.

Yes, there are privacy concerns with this method of shopping—but in a period where safety and social distancing are a primary concern, this may be, a trade many are willing to make. And once customers get used to shopping like this, it’s sure to become a habit.

«Virtual reality and augmented reality have been creeping into retail for years, but COVID-19 has thrown them onstage and into the limelight long before their scheduled appearance.»

Before the pandemic, the push was on to create stellar in-store experiences. Then COVID-19 happened. Now, department stores are closing and some consultants predict that globally half of them will never reopen. According to a recent McKinsey study, 63% of UK shoppers say they’ve changed their shopping behaviour since the start of the pandemic. What’s more, these new behaviours are also here to stay – more than eight out of 10 of those shoppers say they intend to continue with those changes after the pandemic. Footfall on Germany’s main shopping streets in Hamburg, Cologne and Berlin was as much as 50% lower than a year earlier, according to the German Retail Federation, while in London’s West End it was down 64% on last year.

Stores that have reopened try to help customers in and out in minimal time, with minimal contact, and with their fingers crossed they won’t have to engage in a potentially dangerous fight over the mask-no mask issue. Some retailers check shoppers’ temperatures at the door, ask them to shop by appointment, offer no beauty consultations or product testing, have closed off changing rooms and bathrooms, and put items that have been returned in quarantine. All of this, of course, sends the message: “Leaving so soon? Let me get the door.”

Shifting consumer priorities

It’s not just how people buy, that has changed, though; it’s what they buy. With the second COVID-19 lockdowns underway in Europe and the UK, many consumers currently rarely leave their homes. Unemployment across the whole of the European Union is expected to rise to 8.6 percent in 2021 in the wake of the Coronavirus pandemic. If schools and daycares have to close again, many people may not be able to work even if they have opportunities to do so. The devastating impact on families can’t be overstated.

But the picture isn’t all dark. Some have found the sudden shift of lifestyle has some unexpected positives, and it has changed their priorities in ways that may last even beyond the pandemic.

«It's not just how people buy, that has changed, though; it's what they buy.»

One fashion publication said people are consuming fashion much more consciously now. Only 13 percent are buying as many clothes as they did before the pandemic. Many are reevaluating their need for so many clothes; others say they will focus on comfort more in the future - athleisure wear is big. And many seem to be thinking more about the social ramifications of their fashion choices, from the political stand of the brand to sustainable fashion, made from natural fabrics and without toxic chemicals, to clothing resale.

One study by ThredUp and GlobalData showed that the global demand for reworn clothing was on the rise before the pandemic: 62 million women purchased second hand in 2019, up from 56 million in 2018. The market itself is expected to grow from $28 billion to $64 billion in 2024.

People also seem to be buying different things.Retail agency Sellic has analysed what people in Europe are buying (besides masks and hand sanitizer) includes indoor fitness equipment, cooking supplies, food and home care products (+47% in Italy) as well as toys and games (+36% in Germany).

David Duncan, senior partner for growth strategy and change at consulting firm Innosight noted that COVID-19 has suddenly illuminated the patterns that people had in their lives that they might want to abandon. “For people who are lucky enough to have a job and a way to manage the craziness of parenting and work and all that, this has been the ‘great pause.’ This is the first time I’ve been home for more than a month in a row for 25 years. I can reflect more, on all kinds of things.”

Duncan, who co-authored a book about Jobs Theory called Competing Against Luck: The Story of Innovation and Customer Choice, said Job Theory would work well to help retailers figure out what’s next. The theory says that people don’t buy products and services, they hire them to help them get a job done. If the product or service does a good job, they may hire it again; if not they may fire it. Pandemic or no pandemic, customers have problems to solve. They must feed their families, educate their children, pay their bills, protect their health, and find ways to still feel good about themselves and keep themselves from going crazy during the pandemic.

Giving shoppers an experience—still a priority

Some of those “jobs to be done” can be accomplished expediently by more utilitarian retailers focused on helping people get in, buy something fast at a low price, and get it delivered quickly. But retail handles another job, Duncan said, which is offering a positive experience, immersing consumers in the feeling of a brand or surprising them with a new discovery.

«But retail handles another job, Duncan said, which is offering a positive experience, immersing consumers in the feeling of a brand or surprising them with a new discovery.»

Some retailers do this through their websites. Outdoor clothing brand Patagonia’s site, for example, not only sells products, but features stories and videos about social and environmental issues, and about the types of places, adventures, and adventurers that inspire people to buy outdoor gear. Other companies are trying to simulate an experience in shoppers’ minds, and in their physical lives. In the UK cycling brand Rapha partnered with online cycling fitness provider Zwift to provide a series of virtual group training rides.

On the other side of the Atlantic high-end outdoor outfitter Canada Goose offers a Toronto shopping experience it calls “The Journey.” The socially distanced experience has shoppers enter via a walkway that looks and sounds like crunching ice surrounded by dark walls. They go into a cold room with real snow and vistas of snow-covered mountains. There’s no inventory in the room, but shoppers can order on an interactive screen inside the experience and have their merchandise within 24 hours or less. The company calls it a break from the pandemic insanity—though purchasing a $1,000 coat isn’t necessarily a break everyone can afford.

It’s possible that, in the future, the department stores and malls that do remain will no longer be the place where people shop for things. They might become interactive customer experience halls where people can engage with brands on a visceral level without any real merchandise, like Canada Goose. Or they might become much-needed warehouses for a burgeoning e-commerce business.

Shopping could go full on AR and VR. Perhaps someone will even make it possible to have the experience of shopping on the Champs-Élysées in Paris or in Milan’s Quadrilatero, then get the items at your house. One thing’s sure, the future of retail just got interesting, fast.