Can technology save retail?
From payment innovations to AR, tech is coming to reinvigorate the retail sector. But are retailers ready for it?
It's no secret that retail is struggling. Large name retailers such as Toys "R" Us and Oroton have gone into voluntary administration while others are sinking under the weight of their own mounting debt.
So, what's going on? Many blame the stupendous rise of online shopping. According to Australia Post's Inside Australian Online Shopping 2017 report, we spent $21.65 billion shopping online in 2016. The majority of this spending was on physical goods (excluding things like digital services), which rose by 10.2% to $17.7 billion. This is compared to the 3.3% growth of traditional retail spending.
It's not hard to see the lure of online shopping for consumers – convenience, speed and (in most cases) easy returns. Online shopping sites have been quick to catch up with consumer demand using technology. And now, many bricks and mortar retailers have made "online" a part of their growth strategy in order to compete. But is that what consumers want, or do they simply want physical retailers to embrace the technology that has made their online shopping experience so simple and enjoyable?
No pain in payments
One of the most simple ways a physical retailer can improve the in-store experience for customers is with better point-of-sale (POS) technology. Square Australia country manager Ben Pfisterer says that while some businesses have demonstrated an appetite for adopting new payment innovations, there are still many smaller businesses who are yet to take their first steps towards embracing the latest payment technology.
"The decline of ‘cash only’ stores is a huge sign that businesses are recognising the increasing need for business technology, especially when it comes to payments. The most recent RBA statistics show us that credit and debit cards have rapidly overtaken cash to now be the most used means of payment by consumers. And, while retailers have evolved to meet this demand, they are also beginning to realise the benefits that electronic payments can bring to their operations."
"More than 90% of our Square seller base have reported card transactions becoming more popular over the past five years, and the majority of them say that they now use Square to accept cards because they want to meet their customers’ expectations."
Consumer payment expectations extend beyond standard POS as well. Modern layby platforms such as Afterpay and zipMoney have been embraced wholeheartedly by consumers, meaning that it's expected retailers will offer one or both of these platforms both online and in-store.
By making simple changes at the checkout and incorporating tech-forward platforms such as card readers or interest-free credit payment options, retailers can give customers more choice while benefiting from the time-saving and support offered by these platforms.
Enhancing the physical
Other, not-so-standard technologies can also be an option for retailers looking to up their in-store game. Andre Selton is the marketing manager at Plattar, an augmented reality platform that helps online and physical retailers develop unique product experiences.
"One disadvantage of shopping online is the inability to visualise what a particular product may look like in ‘real-life’ or in sit," Selton says. "This is where AR comes in."
Selton says augmented reality (AR) gives retailers the opportunity to transform how people shop.
"For our customers who are bricks and mortars retailers, we help brands have an endless aisle in their stores. Allowing them to demonstrate there on the spot all the possible configurations and variations of the product, allowing the customer to make a more informed decision with the assistance of the staff."
"Retailers should remember that AR is not about creating a completely new reality; it’s about enhancing what already exists."
One retailer that uses Plattar's AR platform is homewares and accessories brand Escape to Paradise. The retailer used it to secure a deal with a major hotel chain by showing how their products could work with a refurbishment project. In the first month, Escape to Paradise saw a 300% return on investment.
Sacha Alagich, founder of Escape to Paradise said the hotel was much more confident in their decision when using AR.
"The hotels could actually see straight away how the cushions from our range go with their colour themes, making it much easier for them to plan the different products they will need to order for a refurbished project."
Makeup retailer MAC has also experimented with augmented reality, offering customers an AR mirror that lets them "try on" different makeup looks.
Selton says some retailers are becoming more open to new technologies.
"Australian retailers as a whole are waking up, they are more aware of which technology works well for their products, customers or experiences. We see business of all shapes and sizes willing to learn and understand how a particular technology works."
Are retailers ready for new tech?
However, while retailers like Escape to Paradise and MAC have embraced technology to secure new customers, Selton says not all businesses are moving this way.
"There is certainly retailers who are being more calculated in their uptake of retail technology, for a range of reasons. But unfortunately some have unfounded fears and are not aware of the changing nature of consumer habits. I see this often, due to the fact that they have an ideal customer, but don’t actually truly listen to their customer or attempt to see where their customers are going."
He says in the case of Plattar and augmented reality, it's important to know whether the technology is right for the customer.
"For augmented reality, we love working with retailers who see where their consumer is going and changing. We are also honest with building lasting relationships with retailers whose products can benefit from augmented reality and where there is great potential to the bottom line to be using the technology."
In terms of payments, the application is more general. Businesses large and small need to embrace payment technologies that are fast, safe and convenient to customers, but Pfisterer says all businesses need to be thinking about what payments solutions they can implement.
"On one hand, Australian businesses have demonstrated a leading appetite for adopting new payment innovation, wanting to streamline the payment experience for their customers both online and in-store as much as possible. Unfortunately, there are still many smaller businesses who are yet to take their first steps when it comes to embracing the latest payment technology," he said.
"Some of the most common misconceptions we still come across is business owners believing that they are too new, too small or too regional to accept card payments. With solutions like Square now in the market, and available at thousands of retails stores across the country, it’s now easier than ever for any business to pick up a fully integrated point-of-sale system that they can use to start accepting card payments in their business instantly."