Imagine a self-driving car dropping you at a shopping centre—or a drone delivering purchases to your home. These services are just around the corner with the shop of the future. Want to know how a jumper would look in a different colour without leaving the changing room? A smart mirror can let you see immediately. Wondering how that sofa would look in your lounge? Augmented reality (AR) room simulator technology can show you—and you can even play with different paint colours to match the sofa. These are just a few examples of smart technologies that are already shaping the future of retail.

Using artificial intelligence (AI), robotics, the Internet of Things (IoT), and VR and AR, retailers can make shopping personalised, frictionless, contactless, and social. The key is to deliver immersive data-driven experiences that prioritise convenience and engagement above all else—even sales.

Smart store technology: Smart mirrors, smart cars, smart shelves

Smart shops are built on smart technologies that streamline and personalise shopping experiences while also automating mundane and repetitive tasks. Smart store technologies shaping the future of retail include:

• Smart mirrors: At first glance, a smart mirror looks like a regular mirror, but it uses VR or AR to allow customers to virtually try on different styles and sizes of clothing, get personalised outfit suggestions, or play with different shades of makeup. Smart mirrors also allow customers to check product availability and pricing, and they can act as a display—showing the time, the weather, the latest news, and offering wayfinding support.

• Smart trolleys: Using built-in scales, cameras, image analysis, and AI, smart trolleys track and tally a customer’s purchases while also making recommendations such as suggesting that a customer buys cream to go with their coffee as they’re shopping. Customers also pay for groceries directly through the trolleys, speeding up the checkout process and limiting contact with shop employees during a time when everyone is conscious of social distancing.

• Smart shelves: Smart shelves are IoT devices that incorporate RFID technologies, digital signage, and weight sensors to turn a shelf into a selling tool. Smart shelves don’t just automatically track inventory in retail shops; they can also optimise inventory, customise product displays, and give retailers real-time sales data and alert them to shoplifting or theft. Smart shelves can even make marketing and cross-selling suggestions and personalised offers to customers.

• Retail robots: According to Gartner, retailers are increasing the use of robots in their shops even more due to the pandemic. Retail robots—used for tasks such as floor cleaning, shelf scanning, and wayfinding—not only improve cleanliness and social distancing, they can help retailers reduce costs and respond to persistent labour shortages.

• “Just walk out” technology: “Just walk out” technology uses cameras, weight sensors, and deep learning to track a customer’s purchases and automatically charge them when they walk out. It’s easy for customers to set up an account with their credit card or through an app, and, like smart trolleys, the technology allows customers to skip the time-consuming step of waiting in checkout queues or self-scanning their items.

• Mobile POS (mPOS): An mPOS is a wireless point-of-sale terminal that turns smartphones and tablets into cashless payment processing devices. Because they’re wireless, mPOS terminals offer retailers the flexibility to run transactions at multiple points in a shop or sell items at remote locations such as pop-up shops. When businesses are equipped to accept cashless purchases, impulse buying increases. Some mPOS systems can also help with stock management and sales reporting.

• Real-time inventory: The use of unique barcodes, RFID tags, IoT devices, inventory software, and QR codes drives efficient stock management and minimises the risk of customers receiving a dreaded “out of stock” message. Real-time inventory management allows retailers to proactively manage their supply chains and reduce unnecessary expenditure.

Experiential retailing: What’s in store?

While shopping is an experience, purchasing is an action. And the shop of the future will enhance both—whether customers are shopping in person or online.

Brick-and-mortar locations are being redesigned to focus on interactions and experiences over transactions—because consumers often need a reason to go to a physical shop when they can easily buy online. Increasingly, shops will offer exclusive products, workshops, cocktail parties, and other opportunities for learning and socialising that draw customers into shops. Physical retail locations are also the perfect spaces for customers to engage with products—testing devices, giving sports gear a trial run on a basketball court or climbing wall, or trying cookware in a test kitchen.

The shop-within-a-shop concept is another hallmark of the shop of the future. By offering dedicated space within their shop to a partner brand, retailers can maximise their space—while introducing both brands to new customers. Experiential retail opportunities build connections between brands and consumers in a way that cannot be replicated online.

With e-commerce sales set to reach almost 35% of global chain retail by 2023, the shop of the future will also need to maximise online capacity and efficiency. Shoppers will expect to seamlessly switch between physical and online during every step of the customer journey—from online shopping baskets replicated in store to goods purchased online and collected at the physical space or at a third-party location.

While shopping and purchasing are becoming increasingly frictionless, returning items is still a roadblock for retailers and customers. However, options such as “buy online return in-store” (BORIS) or offering returns through third-party hubs can ease the bother of returns. With 92% of consumers saying they would continue to buy from a retailer with an easy-to-navigate returns process, returns are an important part of the customer journey.

Smart retail becomes personal

The shop of the future has the potential to make people feel seen and recognised. Consider these statistics:

According to McKinsey, retailers “have access to a broad array of data sets: internal data on customer interactions, transactions, and profiles; widely available third-party data sets that cover customer attitudes, purchase behaviours and preferences, and social media activity; and new data sets on customer health, sentiment, and location generated by the Internet of Things (IoT).” This data can be utilised to personalise the customer journey from end to end.

Retailers can send push notifications to shoppers in real time, letting them know about new products or special offers while they’re shopping or alerting them when they pass their favourite products. Gamification can be added to loyalty programmes to make them more engaging and to offer different rewards based on customer value. This level of personalisation strengthens customer relationships, drives ongoing loyalty, and increases basket value.

Sales associates can further enhance the customer experience. With immediate access to customer analytics, they can act as hosts, product experts, and brand ambassadors. They can offer the highly personalised, relevant experience that consumers crave. After all, who doesn’t want to shop where everyone knows your name? And your shoe size.

Omnichannel shopping is clever shopping

Omnichannel shopping is at the core of the shop of the future. It offers shoppers a holistic, consistent experience no matter how or where they shop. The retail space is developing into one where the customer gets to choose their own adventure and that journey must feel seamless.

As channels for customer interactions proliferate, it’s more important than ever to provide a unified experience. Soon, customers will be able to shop from within YouTube, Snapchat, and streaming channels. Their experience extends through social media, email communications, social media, and live chat support—so consistency is key.

In-person and digital experiences are also beginning to blend with the rise of “phygital” (physical plus digital), which takes omnichannel to the next level. With phygital, physical experiences are enhanced with data—and digital experiences are enhanced with human connection. Phygital often uses geolocation or beacon technology to make this happen. For example, a shopper who abandons her trolley online and drives to the shop instead, could be sent a text message with the aisle number and exact location of her items.

The shop of the future is sustainable

The pandemic also accelerated the demand for more sustainable shops. Sustainability is growing in importance to consumers, so much so that, according to McKinsey, “65% of German and UK consumers now say they will buy more high-quality items that last longer.” The same study reports that 64% of Chinese consumers will consider more environmentally friendly products.

Retailers can focus on everything from packaging to fulfilment to delivery to reduce their impact on the environment. Here are just a few ways smart shops are building sustainability into their brands:

• Offering in-store recycling options for difficult-to-recycle items such as some plastics, batteries, clothing, and devices

• Investing in sustainable shop design, which could include using renewable energy, building with recycled or reclaimed materials, or even using biodegradable mannequins

• Giving shoppers the choice of slower, more eco-friendly delivery options to offset the carbon-heavy impacts of same-day delivery

These sustainability efforts don’t need to start and end in shop, however. Retailers also have the opportunity to build sustainable techniques and resources into the supply chain to improve productivity, help protect their reputations, and make their supply chains more resilient.

The race for retail digital transformation

Technology has changed the way we shop forever—and in many cases, the shop of the future is already here. Retailers around the world are digitally transforming to take advantage of technologies like AI, augmented reality, smart shelves and mirrors, and “just walk out” capabilities. They’re racing to deliver innovative experiential retailing, hyper-personalised omnichannel shopping, and greener products and business practices. Consumers have come to expect everything, and every retailer is under intense pressure to deliver.