Unless you’re selling sweatpants, which sold out 80 percent faster in April versus February this year, most fashion retailers face a dire spring and summer.
J.C. Penney is the most recent casualty among retail giants, joining Neiman Marcus, Macy’s, and others in filing for bankruptcy. Meanwhile, April retail sales in the U.S. plunged 17.8 percent compared with 2019.
Stores in some parts of the U.S. are reopening, but not fully. The number of customers allowed inside stores may be limited, and many people will continue to stay away from non-essential businesses.
To survive the financial fallout, retailers need new ways to stay close to customers virtually.
Here, two startup founders and an SAP expert describe how technology can help retailers survive and recover — all while keeping their brands and customer followings intact.
Augmented Reality Brings the Store to Your Home
Vntana Co-Founder and CEO Ashley Crowder thinks that 3D and augmented reality (AR) solutions like the ones developed by her company can increase conversion rates for online shopping.
“Vntana makes it easy to take existing manufacturing design files and immediately create 3D and AR experiences proven to more than double conversion rates and reduce returns by 40 percent,” she said.
Vntana works with customers like Shah Jewelry to create virtual versions of products that let customers “try on” items at home. Even before the pandemic, Vntana saw increased conversion from browsers to buyers among companies that provide 3D experiences for customers. For example, Crowder says Ikea experienced a 30 percent increase in revenue when consumers could virtually place products within their home.
Crowder believes AR and virtual reality (VR) technology is here to stay: “Artillery Intelligence, an AR and VR research publication, did a consumer study that said 45 percent of consumers want to try AR/VR shopping. Thirty percent said if that can provide good enough information to make a decision to buy, they would never want to go into a retail store again. So people want this content and they want this option.”
She expects adoption to accelerate because of the coronavirus crisis and points out that the companies that move quickly now will be better positioned for survival and future growth.
Hyperlocal E-Commerce Boosts Bricks and Mortar Retail
Sandeep Bhanote co-founded Radius8, a startup that improves shoppers’ e-commerce interactions by providing hyperlocal, personalized experiences. Like Crowder, Bhanote is a participant in the SAP.iO Foundries accelerator program in New York, which currently supports a cohort of customer experience-focused companies.
Radius8 solves this challenge. E-commerce looks the same no matter where consumers are located, which can result in subpar experiences for online shoppers, particularly if the retailer has many stores across the country.
“Our technology takes the consumer location and determines their proximity to any one of those stores within that retail chain and dynamically changes the e-commerce experience to reflect where they are,” Bhanote explained.
Bhanote believes that uniting the digital and physical store experience will propel retail to the next level.
Using geospatial data, Radius8 gives consumers a better online experience while also boosting in-store sales by driving people to specific store locations. Bhanote explains that the focal point for integration between virtual and physical stores has been limited to understanding inventory.
“But the reality is all these physical stores have all these wonderful things that are happening that almost never get communicated digitally — not even within the radius of that physical store,” he said.
Bhanote said customers — including adidas, Lucky Brand, Snipes USA, Orvis, and Eddie Bauer — already use Radius8 to create great experiences across virtual and physical sites.
Intelligent Enterprise Delivers Unique Experiences and Agility
Matt Laukaitis, executive vice president and global general manager for Consumer Industries at SAP, believes that maintaining customer intimacy is paramount for retailers.
“It’s the ability to continue reinforcing that connection with consumers,” he said. “We’re seeing a lot of innovation from brands large and small, where people are doing creative things with virtual personal stylists and individual video-shopping sessions to give customers a unique experience.”
Whether it’s an online or traditional brick-and-mortar experience, the winners of the future will maintain brand consistency while increasing customer relevance and loyalty. “That’s what’s going to enable them to successfully execute as they reopen stores,” Laukaitis said.
Retailers’ agility to respond to the pandemic will make or break them. “The companies that will be able to best navigate the crisis are the ones that can be creative and agile operating in the current environment,” he said.
Companies that have already embraced digital transformation and invested in an intelligent enterprise infrastructure will have a leg up on competitors. They have the speed, simplicity, and flexibility required to adapt business models while delivering on consumers expectations.
One thing is for sure: E-commerce is growing quickly. The recent U.S. revenue growth rate for e-commerce was almost 80 percent year-over-year. And the crisis has sped up people’s need for better digital experiences.
Newer technologies like AR and geospatial, combined with a strong digital core and traditional customer experience technologies, will allow retailers to pivot fast and keep customers.