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Future of Retail: Artificial Intelligence and Virtual Reality Have Big Roles To Play

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From Artificial Intelligence to Virtual Reality, emerging technologies are rewriting the retail marketing playbook at an immense speed.

Retailers are already starting to integrate this tech into their stores and it is already yielding results! Fashion retailer Rebecca Minkoff have seen an increase in their sales with smart mirrors in dressing rooms, while American Fashion designer Kate Spade has had a hit with Everpurse, a smartphone-charging handbag and Topshop’s have a new incubator program, Top Pitch a wearable tech boot-camp, in a clever bid to achieve the same increase in sales at a time when its young consumer base is more likely to spend their money on smartphones than on streetwear.

Industry Challenges

One of the industry’s biggest challenges is “The speed of innovation is so fast today that even companies which embrace transformative innovation are finding that the pace of change, rather than being incremental, is far more rapid than they could ever have imagined,” Lucie Greene, worldwide director of the Innovation Group at J. Walter Thompson Intelligence. Our previous blog "Innovation at the speed of NASA" touched on this subject.

A key area to highlight for retailers, is to be aware of artificial intelligence. As tech giants have developed deep learning algorithms, big data is increasingly being used to power insights in retail that formerly would have only emerged from human intuition. The advantage in this is being able to bring the personalized experience of physical stores into the digital world.

Will Consumers be Receptive

The good news is that consumers want this tech implemented in the retail sector! Research from Sonar, shows consumers are interested in how AI will be used in retail: 70% of US millennials, and 62% of millennials in the UK, say they would appreciate a brand or retailer using AI technology to show more interesting products. Furthermore, 72% US and 64% UK, believe that as the technology develops, brands using AI will be able to accurately predict what they want.

The North Face is one brand that has been experimenting in this space already – working with a tool called "Fluid Expert Personal Shopper" powered by IBM’s Watson cognitive computing technology, which enables users to have more intuitive search experiences thanks to its natural language capability.

Virtual Reality and the retail sector

Virtual reality is also proving especially key within the retail sector. "Putting people in the centre of environments makes e-commerce more immersive, and can have a bigger impact on selling bigger items like furniture, as it will give them confidence to purchase" John Vary (Innovation manager at John Lewis).

Visual listening is another AI-related area that retailers are beginning to explore – being able to examine photos using algorithms on social media platforms like Instagram to see what consumers are sharing about their brands. 

The role of technology is also playing an increasing role in the physical store, with the fashion industry particularly looking at creating more experiential spaces driven by entertainment and emotion. It is again highlighting the power of immersive technology in telling a story for brands,

The number of active VR users is forecast to reach 171 million by 2018, according to a 2015 Statista survey, retailers are starting to invest accordingly. 

Virtual reality is the technology of 2016, and that could change or completely disrupt the retail industry over the coming years. Once this technology is accepted by the industry, a whole new world of possibility opens up to retailers, and many other industries, to reinvent the way we used to do business. Check our previous blog on all thing VR and how other industries are using VR technology.

If you are interested in making your brand stand out from the crowd, or want to take on an Artificial Intelligence/Virtual Reality project, we would love to hear from you!

References: Lucie Greene, Worldwide Director of JWT's Innovation Group. 

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