Algorithmic Retailing

Experiential Product Discovery is Reshaping Retail

 
January 23, 2020

Experiential Product Discovery is Reshaping Retail

From being a discrete activity intended to fulfill a need, shopping has now evolved into a multisensory experience where the ‘product’ itself has become a byproduct of the experience. This is corroborated by how the analog world of retail has evolved into an epicenter of diverse experiences in the places where you least expect them—tea tasting ceremonies in an electronics flagship store, yoga and aromatherapy sessions in a high-end fashion boutique, or a live herbs garden at a big box retail outlet.

However, unlike in a retail store where leading brands are spending big to get their items in front of customers amid a sensory onslaught, mobile continues to score low on the experiential retail quotient.            

Rather than deluging customers with run-of-the mill information on store hours, weekly promotions, and new arrivals, retailers need to design unique customer experiences for mobile. Instead of selling customers avocado, sell them a dinner idea, say, avocado zucchini pasta. Help customers make a decision–what to wear for a summer drinks party, plan a meal, stay fit, or renew a gadget’s warranty.

While designing customer experiences for mobile, retailers need to be cognizant of shrinking attention spans. Digital customers are ditching full length articles for 140 character tweets. Even with Twitter increasing the character limit to 280, people aren’t typing longer tweets; they are just engaging more.1 Of the top 100 apps on iTunes, there are only eight shopping apps – of which just two (Amazon and Walmart) are retailer apps.2

Having a mobile app presence is clearly not enough for retailers. Customers are not seeking shopping apps—they are seeking experiences. With digital product catalogs getting deeper, and text-based search throwing a few curveballs, let’s discuss the 3Cs that are upending the way customers are discovering products.

#1: Capture

Popular social media platforms have morphed into visual discovery platforms, driving 75% of a user’s purchase decisions.3 For instance, Pinterest Lens uses computer vision and deep-linked object recognition within an image to enable customers to find what they are looking for without necessarily describing it in words. There is tremendous scope for taking visual search into a whole new level. Sephora is already using Facebook geofilters on social platforms to take their try-before-you-buy discovery experience to digital channels. Brands are also using Instagram stories to make design decisions. JC Crew used polling stickers to decide which color of sweaters to make for the holiday season. New Balance did the same for shoes.

Visual commerce is poised to redefine the shopping experience. Fashion retail will be more visual with postcard images and videos displayed on digital shopping channels. A pinch zoom action on a specific object within an image will result in a search for the deep-linked object, showing similar or recommended products. The ability to use computer vision for product attribute extraction—to not only understand the RGB color of the dress, but also to understand the fabric, fit, size, style will be the next wave of experiential visual discovery. This paired with an intelligent backend that understands buying patterns, a strong recommendation engine, and hyper-personalization will result in increased wallet share. Visual product discovery serves well for grocery, home improvement, and sports retailers to provide delightful customer experiences.

#2: Converse

The growing popularity of Amazon Echo and Google Assistant is leading to an explosion in voice-based shopping. Smart speaker ownership has already registered a 128% uptick as compared to last year, with 1 out of every 6 Americans owning one.4 Consumers are already using voice to listen to news, podcasts, access information, and manage their smart homes. Both Amazon and Google used the holiday season to penetrate homes and gain market share.

We already got a preview of the power of voice and AI in the famous haircut appointment call by Google Duplex. The voice shopping market in the United States will rise from its current $2 billion USD valuation to $40 billion by 2022.5 With the use of voice recognition, natural language processing, deep learning, text-to-speech, and artificial intelligence, product discovery can be made extremely intuitive. Businesses must develop voice skills to integrate information of products and offers across channels. Currently, there are only 39 such apps within the voice shopping category. Retailers have to take voice across online shopping carts and past orders to enable product discovery. Voice has to evolve into a more sophisticated ‘conversational commerce’ such as the ability of voice assistants to have a dialogue and make a connection to a conversation that happened 30 minutes back. This has to be synergized with customer data to become powerful.

When a customer says, “Order peanut butter”, the system should be intelligent enough to place an order for ’JIF extra crunchy 4 pound’ pack by correlating previous purchases and matching the words against the exact SKU of the peanut butter.

#3: Customize

With brand loyalty on life support, the future belongs to retailers who can offer superior mobile experiences to serenade shoppers. Retailers are attempting to customize the product discovery process by using mixed reality (using virtual reality and augmented reality) for product visualization outside the store. Customers can not only read about the product, but also see how it fits into their space. Home Depot offers product visualization, live painting room, and a virtual toolbox. Sephora uses AR for trying on makeup online and getting a virtual makeover. While AR has worked well for home improvement and beauty, the apparel and fashion segments are still laggards in this space. The perfect virtual fitting room is a shopper’s dream and retailers have been trying to crack it for a while now. Virtual fits can get tricky with multiple body types, attributes, 3D scan, size, fits, and style of apparel. Hopefully, soon there will be a virtual fitting room that works next best to the real thing enabling apparel retailers leverage mixed reality for product visualization.

Conclusion

Much as the digital connected customers are a distracted lot, the good news is that they are using mobiles the most for product discovery. The question really is which of the retailers will be able to cash in on the five minutes of distraction and make the product discovery experience simple and exciting.

The seamlessness of voice, the intuitiveness of computer vision and the life-like extended reality experiences will enable retailers to deliver a simple discovery experience. A simple front end—vision, voice, and mixed reality, and an extremely sophisticated backend—AI, ML, computer vision, augmented by rich product master data, deep customer understanding, a powerful recommendation engine, and contextual personalization will be the key mix for winning this game. The winning formula is to be customer focused and technology driven.

Rolly Sitani is the Lead - Fashion.AI, TCS Algo RetailTM, Retail Strategic Initiatives, TCS. A thought leader designing Fashion.AI offerings for leading global fashion brands and retailers, Rolly is a specialist in identifying algorithmic interventions by reimagining the fashion value chain. She has been instrumental in solving business challenges using advanced AI techniques for global retailers. Rolly has been driving transformation programs across customer experience strategy definition, journey mapping, product discovery, and digital marketing over the past 10 years.