The story of online shopping goes back to 1994 when Amazon, a network of bookstores, opened as one of the first e-stores in the world. After almost 25 years, retail in digital has significantly changed the way customers look for items, make decisions and spend their money. The online shopping experience has also affected the way customers shop in physical stores, with increased demands and expectations.
We’re witnessing the evolution of powerful tools that will help you meet all the expectations presented above. The technologies that online stores use to drive their operations create an environment that enables different sorts of interactions with customers. Technology reshapes consumption models and it’s impossible to isolate human behavior from it. The goal of every online store owner should be to analyze these changing behaviors and adapt the offer to their needs.
Technology reshapes consumption models and it’s impossible to isolate human behavior from it.
Let’s take a closer look at the technological advances that will help you create the future-proof online store.
Artificial Intelligence and Big Data
To personalize and facilitate the online shopping experience, you need to gather a lot of information about your clients to get to know them better. But simply collecting data won’t get you where you want to be. Big Data and Artificial Intelligence exceed the capabilities of human analytics and thanks to their algorithms, you can achieve a higher level of responsiveness to customer needs:
- Recommendation systems. Based on collected data and behavioral patterns of certain client segments, online stores can make accurate and insightful recommendations to make the customer put more products in their carts and increase the final revenue.
- Prediction mechanisms. Based on gathered data and behavioral insights, AI-driven systems can forecast likely future customer behavior. Prediction mechanisms enable you to respond to these potential behaviors by offering, for example, a special discount for particular products or informing customers about a new item that might be interesting to them.
Let’s move on to other technologies deriving from the phenomenon of artificial intelligence. Let’s start with image recognition, since it’s a much simpler concept than computer vision. Take Google image search, for example. Based on the image’s URL inserted into the search engine, you’ll obtain results featuring similar pictures thanks to image recognition. The system analyzes the picture and tries to detect certain objects by shape, color, size, etc.
However, this is just a simplified explanation of what the mechanism does. There are much more innovative ways to incorporate image recognition into the retail experience. Customers can now use 3D online fitting rooms, such as Fitle. Based on the photographs of the user, it creates a 3D avatar depicting the actual size and silhouette. Customers can browse items provided by partnered online stores, try them on in a digital environment and order immediately.
When it comes to computer vision, the possibilities are much more complex. The goal of computer vision is to emulate human vision or even go beyond that, enabling users with superhuman capabilities: see clearly in the dark, through walls, over long distances, and process all of that intake quickly and in massive volumes. For the purposes of retail, these superpowers are certainly not essential, but this technology creates a whole new quality of store management for offline retailers.
An example use of computer vision in retail is Trax, a store monitoring and intelligence platform. It helps retailers take real-time action when it comes to the shelf stock and team management in order to elevate the customer experience. By using insights obtained from computer vision software, it enables the retailer to optimize the physical store space in a quick and easy way.
From the customer’s point of view, they can enjoy the benefits of computer vision using solutions like Amazon Go. It’s a checkout-free shopping technology in which all the user needs to do is scan a code in a mobile app when they enter a shop. The systems installed in the store automatically add new items to the shopping cart and charge the Amazon account as the customer leaves the store.
Natural Language Processing
Machines can not only see what we see, but also listen to us and respond in the appropriate way thanks to Natural Language Processing. With Apple’s Siri, Amazon’s Alexa, Google Assistant and Microsoft Cortana, any online customer may demand that you hear him or her out — literally. Thanks to its information extraction capabilities, natural language processing is commonly used in machine translation or word search, e.g. in spam filters.
Of course, there’s still room for improvement, especially in the matter of machine responses to an emotional human message, but NLP is already used widely and can be implemented in e-commerce. NLP search engines can respond to complex requests like “What running shoes should I get this spring?” At this point, artificial intelligence algorithms come in. The system will be able to answer the question with the highest possible probability of the purchase based on the customer’s behavioral patterns and preferences.
Digital changing rooms
Digital solutions take over spaces you wouldn’t expect them to. How about a smart mirror or an online-connected changing room? This introduces the digital shopping experience into a physical store, which may be an effective way to attract digital natives, such as millennials and Generation Z shoppers. Take a look at this example developed by the brand Rebecca Minkoff:
Digital solutions implemented in the connected store offer several features, such as:
- Online store available on every digital mirror, ready to browse for items available in the physical store
- Call for a sales assistant when needed, which eliminates unwanted interactions and distractions from the staff
- Customized changing room space with a selection of light settings
- Instant check-out in the changing room
- Collecting valuable customer data for online and offline retailers
Digitized checkout rooms take online-offline integration to the next level.
Quality photos of the products available at your store are a necessity to drive sales. However, it’s no secret that photoshoots, editing and publishing are a time-consuming and costly process. To shorten time to market and streamline photo production, digital mannequins are an ideal solution.
How do digital mannequins work? The photoshoot is held in a studio using a green screen and a green mannequin, which will be replaced with a human image in the editing process. With a blank canvas offered by a green screen-like “model”, the editor may pick any looks the model needs to have—facial features, hair color, skin tone, and posture (plus size options are also available). Such technology provides the possibility to re-edit the photos and present the same item on different virtual models.
Augmented reality and virtual reality
We’ve discussed augmented and virtual reality in the previous module about social media, so let’s summarize in a few words. Virtual reality (or VR) refers to a computer program experienced by a user through special equipment, such as VR glasses. Augmented reality, on the other hand, can be used with regular mobile devices. It means that virtual objects appear on the screen as an extra element—an augmentation. It has already been used successfully in marketing for various industries.
One of the iconic applications of AR in advertising are IKEA catalogues. Using a special application and a physical catalog, the customer can “try on” different items in their own home space. Through the screen of their mobile device, they can see a selected item placed in the desired spot. It’s like a changing room for a living space, with furniture instead of clothes.
Another example would be Nike’s limited-edition sneaker campaign. When releasing a new model in collaboration with the famous chef David Chang, the buyers could make a purchase only through an iOS app called SNKRS. To make a purchase in the application, the user had to go to the product page, tap on a 3D model of the sneaker and then point the smartphone’s camera at a menu of Chang’s restaurant – physical or online.
This way, the brand won against buying bots (simple bots used by resellers to buy items faster than a manual checkout process takes so that they can resell for a much higher price). And earned even more hype for their new release, of course. Maybe they even saved lives as some people resort to extreme measures when it comes to getting their desired pair of shoes.
New technologies for retail won’t be new forever!
Today’s customers have high expectations when it comes to their shopping experiences. In a world where customers are spoiled with endless choices for every kind of product, an easy buying process and personalized communication are musts. Brand new technologies are here to help delight the customer and create a sense of loyalty both to brands and retailers.
Even though the technologies we discussed are fresh and exciting right now, new ideas and solutions will come soon. A continuous search for innovation and improvement will help you stay ahead of the competition and discover high-performing retail strategies.