The coronavirus pandemic has pulled retailers in a number of different directions as they react to shifting shopping trends and new expectations generated by the explosion in ecommerce shoppers. Retailers, platforms and solution providers discussed how they’ve been rising to the occasion during the Redefining the Connected Retail & Consumer Experience virtual event, hosted by the IoT Consortium and GS1 US.
The biggest takeaway from the panel was the importance of flexibility when embracing new technology. The pandemic has permanently altered both customer expectations and supply chain demands, and the best retailers have been working overtime to meet these challenges in new ways. Some of the most compelling takeaways from the virtual event included:
- American Eagle is implementing innovative new programs both online and in-store to let customers shop however they want without sacrificing the experiential elements;
- Kroger is rethinking its business models to improve the customer experience during a period where a quicker, more contactless experience is often better, including through optimizing logistics on a store-by-store basis; and
- Snap is working with retailers to enable bigger, better AR experiences — and with 100 million users playing with AR daily, this technology is quickly growing from a curiosity to a vital part of business.
American Eagle Emphasizes Flexibility and Customer Empowerment to Win Over Wary Shoppers
Retailers with a heavy physical presence saw some relief over the summer, but shoppers are still wary of brick-and-mortar stores as we approach the holiday season. American Eagle has shifted 50% of its sales to ecommerce — an important move for a brand with a young, digitally native audience — but that still leaves the retailer with lots of real estate that it can weave into its online offerings.
“We just dove into the strangest holiday season of my professional career, because the customer seems to be all over the place in terms of their comfort and willingness to engage in the physical environment,” said Craig Brommers, CMO of American Eagle during the panel discussion. “Our approach is: however, wherever, whenever a kid wants to engage with us, we’ve got to figure out a way to do that.”
One way of meeting shoppers where they want to be was through the launch of an AR pop-up store on Snapchat in collaboration with Disney. The effort is mainly experiential, featuring just 15 items, but it reached more than 1.5 million engagements in its first week.
Some of the other offerings American Eagle is planning for the holiday season include:
- Scheduling personalized sessions with My AE Influencers who can provide their own specialized perspectives on style and help shoppers build their wardrobes;
- QR-enabled kiosks that let shoppers scan an entire outfit and pick it up within 30 minutes for a completely contactless shopping experience; and
- Live video shopping with associates, to give customers an in-store experience from the comfort and safety of their homes.
“A lot of these things would have been niche projects in in any other year besides 2020, but some of these are really truly scalable meaningful parts of our business for Q4,” said Brommers.
Kroger Tailors Frictionless Offerings for Specifics of Individual Stores
The requirements for safe retailing under COVID are well understood — set up sanitation procedures, add signage to enforce social distancing and emphasize touchless commerce wherever possible. However, this creates a new challenge in maintaining an optimal customer experience, particularly in touch-sensitive retailing segments like grocery.
“When you think about customer intimacy and your ability to guide and touch and feel, and engage all the senses, the safety component of this pandemic requires you to remove them from some of that,” said Wesley Rhodes, VP of R&D and Technology Transformation at Kroger during the panel discussion. “I need to have space between you and others, I need to have space and barriers between you and something else that somebody else might touch. Challenge number one was how to craft and optimize an experience within those constraints. It took a lot of experimentation and it also took some business model changes in order to think of new ways to deliver.”
One way Kroger has simultaneously improved the customer experience and safety is through an emphasis on friction-reducing technologies. Even something as straightforward as curbside pickup inspired serious consideration by the retailer: each individual store serves a unique clientele in a unique geography, with a unique selection of other retailers nearby, and all of these factors must be considered when rolling out these pickup programs.
Cost is a factor as well as new technologies come to the forefront, and the way a shopper wants to receive their order, as well as the store’s proximity to warehouses, affect the nature of last mile logistics. Kroger handles this with a range of solutions, from macro-level initiatives like its purchasing partnership with Walgreens to locally tailored fulfillment options.
“We think about it as personalization for the customer in last mile delivery and understanding the geography well enough to understand how they want to receive their goods,” said Rhodes. “It’s all about the customer intimacy and the economics of what options we can offer them.”
Snap Sees AR Playing an Ever-Growing Role in Retail During the Coming Quarter
While many shoppers are still reluctant to return to physical stores, they still see the value of (and often miss) the in-store experience. Snap has been working with companies including American Eagle, Gucci, Kohl’s, Nike and Walmart to help both retailers and shoppers overcome the limitations put in place by the pandemic.
This has made augmented reality a core part of Snapchat’s platform, and the technology has proven particularly useful for a product that is perhaps most reliant on the in-store experience: shoes. Snap launched its AR try-on technology with Gucci in June, letting shoppers see how shoes would look on them using two kinds of lenses. Snap then provided Champ’s and Nike with AR to show off their own collaboration in China.
However, apparel isn’t the only category interested in AR. “We’re also seeing beauty really lean in here,” said Sharon Silverstein, Head of U.S. Verticals at Snap during the panel discussion. “Think about beauty and how AR works for that category. We did a great execution with Sally Hanson in August where they were launching a new palette nail polish, and the user could actually put different colors on their hands to see which one they wanted to purchase. There’s been really great executions around AR try-ons, and you’ll continue to see a ton of partners throughout this quarter bringing that in-store experience online.”
The aforementioned American Eagle pop-up goes beyond try-ons to let shoppers explore a virtual store on Snapchat. The flexible experience lets shoppers get what they want from the experience — purchasing directly through the platform, adding items to a wish list or simply enjoying the view. While this particular initiative is small and experimental, it’s an important bit of experimentation — something retailers will need in an environment that will continue to change rapidly regardless of whether a vaccine becomes available soon.
“I think that consumers find a way,” said Brommers. “The flexibility that retailers are going to need, to try stuff and scale things quite quickly, is something that is going to continue. I actually think that coming out of all this mess will be a lot of exciting innovation, and as long as we’re humble and hungry there are going to be a lot of winners out there.”