Findings to sub-question two

As discussed in the previous section, there are many different consumer trends that impact and reshape the retail industry. Digital technologies play a key role in context with consumer trends. In the following, the findings to the sub-question two will be presented. The findings to sub-question two were coded by digital technologies.

Sub-Q2: Which digital technologies can retailers implement to leverage the most relevant consumer trends?

Virtual and Augmented Reality

One of the most in-depth discussed digital technologies is Virtual and Augmented Reality. This technology is mostly discussed in context with the trends Experience Shopping as well as Webrooming & Showrooming. Ten experts are discussing this technology, categorizing it in the phases awareness and evaluation. Experts see Virtual Reality as a platform for virtual showrooms, which customers can sink into and experience a virtually recreated store where they can freely move around and explore products just like in a real store. The technology was discussed for both the physical and the online channel.

The automotive industry was a common example that experts utilized to explain the benefits of the technology for physical stores. With the help of VR, the amount of models in the store can be reduced, as missing models simply can be shown in the virtual showroom. Here, the entire product range can be explored and cars adapted to customers preferences, IV6 explains. Especially with the drastically increasing rents and the lack of space in the inner city centres, IV8 and IV11 are convinced that through VR these problems can be solved in an elegant way. IV1, IV5 and IV8 see not only VR, but also AR as a great way to attract customers and bring them into the store.

The complexity of setting up the technology as well as the costs for creating the virtual worlds was often mentioned as a down side of the technology. IV3 criticizes, that it is necessary to permanently have someone assisting the customers using VR. Beyond that, a lot of computing power is necessary to generate the pictures, and the space around the VR-area needs to be secure to prevent injuries. The interviewee further explains that customers are usually not keen on wearing VR-glasses due to hygienic issues and ruined hairstyles after wearing them. Despite the fact, that the costs for creating virtual worlds are decreasing vastly, IV1 and IV8 still mention that VR is very

cost intensive and thus often unattractive, as the business impact is hard to measure.

IV8 also notices that VR is most definitely not a technology for private households.

Not many customers have access to such technology, as it is still very costly and at a very early stage of development.

On the other hand, experts still see massive potential for Augmented Reality. Despite widely spread support technology, i.e. smartphones, not many retailers are making use of the opportunities of the technology, wonders IV8. IV10 agrees, stating that the usage of AR will further increase in the future.

‘There has been a lot of early experiments with AR, I think moving forward it is really going to be key in engaging people with this evaluative way, Story Telling, explaining the products a lot better in depth, than you potentially could with other

types of technologies that we had.’ (IV5)

IV1 and IV5 further agree that AR and VR are extremely innovative ways of explaining products and strongly support the awareness and evaluation phases of the customer. With the help of AR, products can easily be pushed into the centre of attention, without the customer realising. Subsequently, the brand awareness can be increased and the brand loaded with emotions, that further helps drive the sales on a sustainable basis, IV5 explains.

‘If we think in the direction of VR, AR, then you have a few powerful tools, that can replace a showroom visit.’ (IV4)

Interactive Digital Signage

Interactive Digital Signage was discussed by six of the questioned experts, mostly linked to the consumer trends Experience Shopping, Social Shopping and Omni-Channel Shopping. Interactive Digital Signage can support all phases, except for the delivery phase.

IV1, IV5, IV7, IV8 and IV12 are convinced that Interactive Digital Signage can boost the customer experience inside the store. The experts find different fields of application for the smart screens. IV1, IV5 and IV8 mostly see the screens as an additional helper for transferring valuable information about products and services to the customer during the evaluation phase. Furthermore, they can be utilized as an order tool which encourages customers to browse through product portfolios, select products

and directly purchase them. IV12 explains, that Interactive Digital Signage also can be used to build the bridge between online and physical, by displaying user-generated content from Social Media channels on the screens. This increases the engagement of customers, takes customers anxieties and provides additional information about how others are utilizing certain products.

Experts further discussed the benefits of Magic Mirrors, a sub-type of Interactive Digital Signage, which is mostly applied in the fashion industry. By scanning the customer’s current outfit, best fitting products can be recommended for the customer to try, IV12 explains. Also arguing with the advantage that customers can independently check the availability of products, sizes and colours, which is often faster than asking the working staff, IV5 agrees to the statement of IV12. In the context of Magic Mirrors, IV4, IV5, IV6 and IV8 also discuss optional 3D-features, which can lift the customer experience to a whole new level. By scanning the customer’s body, the system can recommend products in the optimum fitting size.

‘Throughout the purchasing process I believe, something like fitting, meaning does the product fit, body scanning, how does the product look on me, (...) is going to play

an important role in the future.’ (IV6)

IV5 and IV6 mention that it helps to reduce the evaluation time and can vastly prevent cognitive dissonance. IV8 remarks that returns can be drastically minimized, as customer purchases become more precise. Despite all positive feedback about Interactive Digital Signage, IV9 positions himself strongly against such technology.

The interviewee is not convinced of such technologies, stating that there is no real value added for customers, as great customer service can provide much more than any digital technology.

Robotics

Three experts mention robotics as a technology to cope with the trend Experience Shopping. The technology was only classified in the phases awareness and evaluation as many experts still see considerable limitations with robots in a retail environment.

IV3 sees robots mostly as concierges greeting customers when entering the store. From experience the interviewee explains that in most cases companies are using robots for PR reasons, as they help create an external image that stands for innovation. IV5

describes such technology only as shenanigan but is convinced that in the future an increasing amount of minor tasks will be taken over by smart robots. They can help navigate customers through the store, and at the destination a staff member will be already waiting to assist, IV5 explains. Also talking about robotics, IV8 sees such technologies as a great feature to create a great customer experience in the physical store, as customers mostly do not expect to experience such technologies. The word of mouth effect is very strong, the more innovative it gets. Hence, the experts conclude that it is a great way of generating awareness and in the future will help support evaluation.

Drones

Three experts discussed drone technology as an alternative form of delivery in context with the trend Now-Economy. The experts see the strongest benefit in the shortening of the delivery-phase, yet all three are not convinced that it is an alternative that will eventually displace the conventional delivery services.

IV8 believes that drones, just like robotics, are only utilized as a tool to create a large show-effect around a brand and grab the attention of the public. Due to the density of cities, IV8 further states that drones are better applied in rural areas where there is enough space and delivery chains are slower rather than in highly urbanized cities.

IV10 agrees with the opinions of the other interviewees and comments on the extreme noise the rotation of the drone’s rotor blades create. The interviewee believes the technology for taking pictures and videos will continue to grow in the private sector.

There are other technologies which can help simplify the delivery process; drones, however, are not the key to it, IV6 concludes.

‘Unfortunately drones are not going to be the saviour for logistics. I think we have to rethink about how we can deliver products quicker, but not through the air.’ (IV10)

Self-Service Technology

Self-Service Technology (SST) is an extremely important topic to the experts. Seven out of twelve interviewees discussed this technology in the context of the trends Experience Shopping, Now-Economy and Omni-Channel Shopping for the phases purchase and delivery. Self-Service Technologies, such as the digital check-in and checkout, are experiencing a high rate of acceptance.

SST ‘is becoming more and more relevant. People have moved away from sales people. (...) I think it’s the classic car sales man, the classic tax person or whatever,

there are some roles, that people just got fed up with.’ (IV10)

Experts repeatedly bring up the example of McDonalds. The fast-food chain in recent years has been implementing self-service kiosks step by step, allowing the customer to autonomously order and directly pay, IV3 IV4 and IV10 explain. Experts see the biggest benefits of self-service technologies in the elimination of waiting queues and the load relief for the service staff. It allows employees can start focussing fully on customer service, as IV2 and IV8 explain.

Despite all the positivity, IV3 also mentions the downsides of SST. Unhygienic surfaces, technical issues and low quality screens are among the points that can lead to a negative customer experience. On top of that, the interviewee notices that SST often does not accelerate the checkout process due to user unfriendly UX-design and the customers’ missing knowhow. Hence, the number one aspect to the success of self-service technology is a high level of simplicity, concludes IV5. Only when there is a high ease of use, customers will accept and use it. Experts conclude however, that in the future SST will slowly but surely dismantle the traditional checkout process.

‘And I believe, that the next advancement will be that a classic checkout-process will no longer exist. Instead, I will just leave the shop, automatically will have paid,

and everything will be recorded digitally (...).’ (IV6)

Mobile Payment

When elaborating on digital solutions in the purchase phase, eight experts refer to mobile payment in context with the trend Experience Shopping, Omni-Channel Shopping and Now-Economy. The payment process until today has often been a very complex and time intensive part of the customer journey, too often customers bounce before conducting a transaction, says IV8.

With the help of RFID and NFC chips, IV8 explains how the checkout process could be modified and improved, by allowing customers to pick up products in the store, scan and automatically pay them through an app. The interviewee emphasises that while customers save a great amount of time in the checkout process, retailers can save an immense amount of space by dismantling the traditional checkout systems and

further explains that staff fully can focus on providing good customer service, similar to the results of SST. IV2 notes that such technologies are especially beneficial for customers that do not want human interaction throughout their shopping activities. The interviewee refers to the example of Apple, where as a customer you can complete a purchase without any form of human interaction.

‘I don’t have to take the cover, queue at the checkout and pay by cash. I can scan that myself through the application, directly pay and leave the shop, without ever

having seen one of the staff members.’ (IV2)

From personal experience, IV3 tells about the frustration of having to queue, which often relates to an abandonment of the shopping experiences in one of the last stages of a customer journey, similar to what IV8 mentioned under Self-Service Technologies. Both IV3 and IV4 state that especially at busy times, Mobile Payment can improve the customer experience and help generate sales that otherwise would have been lost. IV9 further mentions that with the establishment of such systems, retailers have access to an even greater amount of data. This data further can be used for a retailer’s advantage in the aftersales and awareness phases.

However, mobile payment is not only important in the physical but also in the online channel. IV7 and IV8 explain the importance of allowing customers to freely choose the way they would like to conduct a purchase, not only in the sense of which channel and touch point to choose, but also through the sort of service. Apple pay and AliPay are strong references here to underline the importance of such services. Moving forward, the interviewees discuss that not only direct transactions should be possible, but also the completion of leasing and financing models should be enabled. IV6 and IV8 are convinced that this will further elevate the customer experience at a critical point of the customer journey to a new level. Again experts refer to the importance of the ease of use as key to the success of such solutions. Complexity is a killer factor and fully has to be removed from the paying process, say IV3 and IV6.

Data Analytics / CRM

One of the strongest tools, to cope with the trend personalization throughout all phases, is data analytics and CRM software. These systems operate in the background, containing an assortment of historical and newly collected customer data, allowing

personalized recommendations, IV3, IV8 and IV12 explain. Such software mostly supports the phases awareness, evaluation and aftersales.

To be able to make use of such software, it is crucial to have access to the right data in the right quality, IV2 and IV8 explain. Furthermore, the interviewees say that many companies are already collecting lots of data, but they are not aware of how to utilize it. IV5 criticizes, that especially in the luxury industry, many retailers have sophisticated databases, but often are not aware of how to create correct customer segments, to allow personalized and individual communication strategies.

IV8 further notes the fact that systems have to be fully integrated to allow successful data interchange throughout all channels and touch points. The interviewee also mentions cloud applications as a relevant feature for data analytics and in the long run even sees the chance for blockchain-technology to take over tasks in this field. IV1 further adds that tracking through cookies on websites allows the re-targeting of unknown customers, once they return to the page. With the help of digital twins, IV6 agrees that even new leads can be approached in a personalized way. Based on tracking records, leads can be categorized into certain target segments, which then receive audience specific content. Another great feature of analytics software that IV1 and IV12 mention is A/B-testing. To identify which communication strategy works best for customers, companies can apply such features and measure which messages actually reach the customer with the highest response rate. As all this is happening in real-time, retailers immediately can adapt their communication strategies to ensure the highest success rates.

IV3, IV8 and IV12 explain that with sophisticated CRM-systems, retailers know the context of each customer and know every single product that the customer owns.

Hence, there is a new level of cross and upselling potential, as goods and services that are directly related to previous purchases can be offered with perfect timing. The customer relationship can be further improved, as retailers are becoming a guardian over-watching customers’ needs and serving them before a need occurs. With the implementation of more digital touch points in the PoS, data nowadays can also be collected in a physical environment, IV2 explains. With this 360°-tracking, retailers are able to create a holistic view of the customer and lift the personalization activities to a whole new level.

‘I simply think for the customer, also that the customer never will get into any sort of negative experience.’ (IV8)

On top of that, IV8 explains how retailers can extend the endorphins from the moment of purchase until the delivery specifically for online shops. With the help of CRM systems, the customer can be penetrated with product-context-sensitive information, such as videos, pictures and other related products and services.

‘We quasi extend the lasting period of endorphins and quasi carry them up to the door step.’ (IV8)

The experts repeatedly were in agreement concerning the importance of delivering a consistent and orchestrated message throughout all channels and touch points, no matter which channel or touch point a customer is currently using. This can be achieved with CRM-software which includes campaign management features, IV1 explains. These features ensure retailers have a consistent and orchestrated communication strategy throughout all channels and touch points. IV8 and IV12 both state that in the Aftersales there certainly is some form of AI included in the process.

(Predictive) Artificial Intelligence

As explained under the consumer trend Personalization under sub-question one, the experts state that retailers have to act increasingly predictively throughout the customer journey to further boost sales and drive customer satisfaction and loyalty. It is not very surprising that AI was one of the key technologies with reference to that trend. Experts see this technology applied in the phases awareness, evaluation and aftersales, in context of the consumer trends Experience Shopping, Omni-Channel Shopping and Personalization. As experts mentioned under data analytics, AI is a key technology to make sense of collected data and to be used to a retailer’s advantage to design and personalize targeting, IV4 and IV5 explain.

AI can take over many different roles of a retailer. IV10, however, believes that currently the largest role is in the advisory, telling customers what they actually need.

The interviewee notes that customers in the future are likely to have even bigger time constraints. With the help of AI, IV10 suggests that retailers will have to be able to automatically predict which products are relevant to which customer. This will open huge potential in the two phases awareness and aftersales, as IV8 and IV9 state. It can

be used to automatically generate next best offers and help create context-based

be used to automatically generate next best offers and help create context-based