Inside the shops of the future
Forward-thinking retailers are crunching data and experimenting with technology to create personalised, experiential stores of the future.
Those who happened past the Hermès store on New Bond Street over the festive season may have noticed an interactive experience set within its intergalactic-themed window display. Passers-by stopping for long enough could have their faces tracked using technology by digital studio Holition, then beamed onto a 1960s depiction of the moon. From there they became part of an animated trip into space.
As abstract as that might sound, it’s a fitting analogy for the future of retail in many ways: a creative or entertaining reason to visit a physical space, but more than that – a wholly personalised evolution at the heart of the experience. Personalisation is today’s big buzzword for retail, yet in reality it’s an old characteristic of shopping. Store visits of yesteryear would have regularly seen you known by name. The shopkeepers, seamstresses, tailors and more would have remembered what you’d bought on previous occasions, they’d know what size you needed things in, they could probably even recall your mother, brother and daughter’s birthdays.
Several industrial revolutions later, however, and the shopping that we know today even at the most high-end of boutique stores is more often than not an anonymous affair. In the online world, conversely, there’s more personal information captured about us than ever. During an average five-minute session on luxury e-commerce site Farfetch, for instance, 15,000 data points are collected about each shopper.
In its bid to connect the online and offline worlds, Farfetch launched a strategy on the “store of the future”, focused predominantly on this aspect. José Neves, CEO of Farfetch, said at the launch in 2017: “It’s absolutely imperative that we bring data intelligence into our [bricks-and-mortar] businesses and deliver to customers incredible, mind-blowing experiences that only data allows us to do.”
Research shows that while e-commerce may only account for around eight per cent of luxury goods sales, the impact of digital stretches to 75 per cent, meaning three out of four luxury purchases are influenced by what shoppers see, do and hear online. “The irony is that as we move into this new realm of data awareness, we’re really moving back to a time when merchants knew their customers personally and could serve them as individuals. If anything, the era of mass marketing through the 1900s was really the departure from the norm,” says Doug Stephens, retail futurist and author.
The store of the future may look increasingly like the store of the past, but this time it’s data, or what technology like artificial intelligence and machine learning does with data, that makes personalisation possible. “AI provides new opportunities to better connect with consumers and to establish a new kind of anticipatory, responsive and personal customer experience, thanks to big data and the ability to map and act upon individual preferences,” adds Ana Andjelic, strategist, writer and doctor of sociology.
With Farfetch, we’re starting to see this become a reality. The store of the future concept is a key part of its new Browns East store in London. In beta at the moment, it offers VIP customers a personalised experience via an app the sales associates have on hand. From this, they’re able to receive tailored recommendations based on their clients’ previous purchase behaviour, for instance.
There’s also a connected fitting room where smart mirrors present different outfit choices, while a link to the back office checks the availability of each item in real time. If any particular product is not in stock, customers are offered the option of having it delivered to that store within an hour. They can also make payments through the sales associate’s app.
“It’s about making the experience super-intimate and personalised, but also about tapping into efficiency, because we know how to do that well and customers really want it,” explains Sandrine Deveaux, managing director of Farfetch’s store of the future initiative. Deveaux believes that in the “on-demand” era, when we are used to obtaining everything from our taxis to our regular food orders at the swipe of a finger, removing any level of friction is a big part of the future shopping experience. That means things like standing in queues or waiting for the right size need to disappear, so that everyone can eventually feel like a VIP customer. “We might spend three hours exploring the store, but when it comes to payment, it has to be fast and easy. Customers want to be able to have a really immersive experience with the efficiency of what they are used to in the online world. Luxury brands are slowly coming to that realisation,” she explains.
Farfetch and Browns East aren’t the only ones playing with the idea of a store of the future or technology in the fitting room. Tommy Hilfiger’s recently renovated Regent Street store in London comes fitted with smart mirrors too – an opportunity for visitors to see further information about the items they’ve brought in, as well as order other looks or different sizes without having to leave the changing room. Tapping on the mirrored screen sends a notification to the sales associate’s tablet for them to then deliver items directly to you.
Meanwhile, shoppers can browse whole collections on different devices and screens around the store. “The technology we are embedding into all areas of the store is designed to bring more convenience and simplicity to shopping, and at the same time open up access to the world of Tommy Hilfiger with more collections than could ever fit in one retail space,” says brand CEO Daniel Grieder.
“Consumer preference and shopping habits are leading the changes in our industry. Millennials and the next generation of consumers are digital natives. They no longer want to just walk into a shop to buy a product. They want engaging and personalised brand experiences and expect access to the widest assortment of products. We’re investing in digital and technological innovation that merges in-store and online channels, providing a premium and personalised way to explore and buy products.”
Over in the US, womenswear brand Rebecca Minkoff was one of the first to offer a connected fitting-room experience, but has taken that concept one step further with a self-checkout for its millennial customers. The idea is to shave off the time they spend waiting in lines and give them a sense of complete control around how they do their shopping, CEO Uri Minkoff said at launch.
This idea of “luxury convenience” has also rolled into the beauty industry. Make-up brand Charlotte Tilbury, for instance, introduced a smart mirror in the middle of its Westfield London store. Created by the aforementioned Holition, it allows shoppers to virtually try on all of the looks from the brand using augmented reality to map it onto their faces in real time.
As a result, users get a quick and easy understanding of what suits them, ultimately saving them time in the try-on and purchase process. But the experience is also about bringing some theatre into the physical store space, argues Holition CEO Jonathan Chippindale. “What’s great about the mirror is that there’s a little bit of Charlotte in there. She’s all about using make-up design to make women feel amazing and that’s what the mirror does. It’s like having your own personal makeover from Charlotte herself.”
This desire for new and different experiences is more relevant than ever for retailers. Competition now isn’t just e-commerce sites or other luxury brands, but entirely different businesses altogether. Today, 78 per cent of millennials, for instance, say they’d rather spend money on desirable experiences than on material items, according to Eventbrite. That presents a big challenge for a company that trades primarily in product.
What it comes down to is presenting a reason for customers to spend their time with you, Andjelic notes. “Stores should attract consumers as community hubs, gathering places, educational settings, Instagram opportunities, galleries and storytelling contexts.” According to Boston Consulting Group, the more time customers spend in store, the more likely they are to make a purchase. And the more touchpoints a consumer engages with – from e-commerce to social media and, indeed, physical stores – the more loyal they’re likely to be.
Apple is a prime example of a brand thinking in this way. It no longer calls its retail outposts “stores”, but “spaces” or “town squares” in each of the cities where they reside. As can be seen in its Regent Street renovation in London, it’s about creating a place where people want to gather and spend time, and about offering them all sorts in the way of community, entertainment and education to encourage it.
Matchesfashion.com is also thinking in a much broader experiential context. Its new store at 5 Carlos Place in Mayfair – a 465sq m, six-floor space – will include a regular events programme, ranging from talks to trunk shows, as well as different installations and classes. The intention is to open up the space for anyone to come and be inspired.
“As we become increasingly tethered to technology, and as more and more of our behaviour is being guided by algorithms – Facebook telling me who to “like”, Netflix telling me what to watch, LinkedIn telling me who to connect with – the craving on the part of consumers for physical, social, serendipitous and emotional experiences is only going to increase. Retail spaces can and must step up to be these experiential havens,” Doug Stephens explains.
In that sense, the store of the future isn’t necessarily about technology at all. But if the focus is the personal touch, the question is whether personalisation has the potential to become a little too creepy to the user. Is it intrusive to live in a world where walking into a Farfetch-enabled store means you are instantly known in a multitude of ways by someone you’ve never laid eyes on before? Ana Andjelic believes privacy is all about balancing delivery. “Companies may be armed with indescribable amounts of data, but they need to learn how to behave like a butler, not a stalker. The difference between the two is that butlers anticipate our needs, are flexible in responding to our demands and are effortless while doing so.”
What it further comes down to is maintaining a human element in everything. While there are stats bandied about – such as that 85 per cent of all retail interactions are going to take place without a human on the business’ side by the year 2020, according to Gartner – Chippindale of Holition emphasises the role people still have to play. “The best technology should be invisible. If we can hide the tech and be profoundly human, that is the real store of the future,” he explains.
With what Deveaux’s team is trying to build for Farfetch, it’s also about technology enhancing, not replacing, the sales associates. And again, it’s about using that view from the store of the past to create an increasingly relevant and frictionless store of the future. “When you sell luxury, you sell a dream and a story. Tech doesn’t necessarily do that, but people do, and so the store of the future is about how you can do both. That’s what we strongly believe in.”