Getting ‘phygital’ with intelligent technology
4 mins read
There’s no doubt about it – shopping online is quick, easy, convenient and, in many cases, cheaper than shopping in a physical store.
When you shop online, the entire world is on your high street, delivering whatever you want, whenever you want it, straight to your door.
And it has really come into its own during the Coronavirus pandemic, when the closure of all but essential shops has meant that it’s been the only option available for anyone wanting something other than a loaf of bread and a pint of milk. In fact, during the UK’s lockdown, online shopping accelerated at a never-before-seen rate and enjoyed seven years’ forecasted growth in just seven weeks.
But there are drawbacks. You can’t enjoy the social side of shopping when you do it online or luxuriate in the smell of a perfume counter or the feel of a crisp cotton shirt. It’s difficult to imagine what a settee will look like in your living room or be sure that it will fit through your front door. Or is it?
Let’s get phygital
So where does retail go now?
In May 2019, 33.4% of sales in the UK were made online. Some of those sales will shrink back once the pandemic is over, but people have formed the online shopping habit during the lockdown and retailers will need to develop new strategies to keep hold of them.
The lockdown has also disrupted the retail sector, doing away with the peaks and troughs of a normal sales cycle and making planning for future demand impossible. Take Christmas, for example – normally a dependable peak shopping period, in 2020 people don’t know whether they’ll be able to enjoy a traditional family get-together, leave their homes, or even whether they’ll have money to spare for presents and extra food.
How retailers respond to this uncertainty will be a perfect measure of how they’ll be able to respond to the continued disruption and uncertainty that lies ahead in 2021. Some have already started putting contingency plans in place, to ensure they have the agility to make the most of any situation, while others are behind the curve.
In our opinion, the answer is technological – kick-starting retail by combining augmented reality (AR) and our conversational AI (CAI) tool to create a “phygital” shopping environment that brings online shopping into the real world and adds real value for customers.
A different reality
The extended reality landscape has many features, from reality itself to virtual reality and taking in different types of augmented reality plus parallel reality along the way. They each offer different levels of margin, customer engagement, sales conversion and agility for retailers and friction, effort and cost for consumers.
Augmented reality is only one step behind reality itself in terms of benefits for retailers and their customers. It works directly on people’s mobile devices, without the need for them to download apps or buy extra equipment, and allows them to augment what they’re seeing, rather than replace it.
Alternate reality devices have been around for two centuries – Charles Wheatstone invented the stereoscope, which turned 2D images into 3D ones for its users, in 1838 – but have never really made it into the mainstream. Until now.
A perfect storm is brewing that makes augmented commerce more relevant than ever before:
- A trend towards online retail that has been growing year-on-year
- The launch in 2019 of web AR, which ensures that 9 out of 10 mobile users can be reached with AR integrated into a website
- 67% of online purchases being made on a mobile device
- 5G being rolled out across the UK, providing faster connections and enabling people to use new real-time services
- Retailers need to consider hygiene, social distancing and loss of physical outlets, energise sales and reduce their costs.
Augmenting online retail
AR is the perfect answer to this perfect storm. It’s accessible to consumers – all they need is a smartphone and access to a retailer’s website – and gives them more confidence in their purchases. They enjoy a better, more immersive online shopping experience and can get access to hyper-local services.
They also make fewer returns when they use AR, because they can ‘see’ products in their homes – they can check that the sofa they like the look of online works with their colour scheme and is the right size for their living room – before they buy them.
For retailers, AR is a fantastic opportunity to attract customers and engage them with their brands and bring more people into their shops – crucial in an increasingly uncertain, changing, disrupted and competitive retail market. It creates a new marketing platform, new data and insight, and an opportunity to create user-generated content. It helps to improve conversions and reduce costs and inventory, and it enables pop-up stores and showrooming.
When you combine it with conversational AI, you create a unique and powerful tool that accurately answers people’s enquiries about the products they see online, by reading live website content and customers’ context and intent to provide the most up-to-date and relevant information.
There’s no doubt about it – AR can make online shopping quick, easy, convenient, cheaper than shopping in a physical store and just as engaging and productive.
The future of online shopping
We discussed the role of AR and conversational AI in kick-starting retail following the pandemic during a recent webinar. Capita's Alan Linter, and Michael Valdsgaard, London Dynamics, talk about the benefits for consumers and retailers.
Innovation and Data Science Director at Capita
In his current role, Alan is responsible for searching out new and innovative technology solutions that allow our clients to be at the forefront of customer service delivery. He is also responsible for our Data Science practice that looks to link complex data sets and maximise the value that data can generate for clients in improving customer experience, generating revenue and reducing costs.