Tomorrow’s retail-sector technology is now being tested and used

Though drones and augmented reality applications have not become mainstream, retailers from Amazon to Wal-Mart Stores are securing patents and testing cutting edge technologies that are beginning to tiptoe into the retail industry.

The Federal Aviation Administration released in June the basic guidelines that will regulate the commercial use of drones noting that drone flights could begin in the next few months once the rules were recorded in the Federal Register. Retailers like Wal-Mart and Amazon are already testing drones within their organizations, and Amazon made a successful drone delivery for online purchases in the United Kingdom in late 2016, a process not yet approved in the U.S., as the FAA continues to study the impact flying drones could have on commercial airspaces.

Amazon has received a patent for an airborne fulfillment center such as an airship or blimp that would float at an altitude of around 45,000 feet. The patent indicates drones descending from the floating airship/warehouse to make final deliveries for items ordered by consumers. One example provided in the patent was the floating blimp being used as a giant advertising board at a professional or college football game where customers may want certain items such as food or merchandise.

Wal-Mart has been using drones internally and is working within the FAA guidelines. Seth Waite, chief marketing officer for Bentonville-based Rev Unit, said drone usage for final-mile delivery in the U.S. still faces several hurdles given federal agencies must first give approval. Waite said technology such as drones and augmented reality have the potential to radically change traditional retail within a few years.

“I can see augmented reality creeping into retail this year (2017) as retailers try to differentiate themselves by improving shopping experiences. Virtual reality requires special devices and behavior changes are needed to make it work, but augmented reality can be accomplished with a smartphone,” Waite said.

With the recent popularity of Pokemon Go and its use of augmented reality, retailers are looking for ways to adapt this technology into their businesses. Waite sees retailers using augmented reality in three key areas — in-store, online/out-of-store and internal operations.

“Retailers will be able deliver more personalized experiences through augmented reality when used inside store by adding depth of information. It allows retailers to bring rich media content about products and related information onto the sales floor. Customers look through their phone to see product reviews, product demonstrations and other experiential information.” Waite said.

“In fashion stores, the magic mirror is already being used on a small scale and this allows customers to vision what they would look like wearing a certain item. They can change the sweater color, without having to physically get an attendant to bring them another color or size. This allows for a very personalized experience,” he added.

Waite said augmented reality can also turn stores into showrooms that give customers a glimpse at what large items might look at when they get them home. For instance he said a backyard swing set sold at Sam’s Club doesn’t actually have to be in the club. With augmented reality, a shopper can view an image of that item through their phone and see what it might look like in their own yard. Waite added that could be a space saver for retailer’s stores, allowing for smaller physical stores in the future.

He said there are already early applications of augmented reality being used by online retailers such as Wayfair that allows shoppers to see how well furniture pieces fit inside a room or how a painting looks on a wall in their home. He said IKEA is also using the technology that allows customers to not only see what items looks like in their home, it allows for shoppers to connect with other family members to consult on the product before is purchased.

“Think about purchasing a tent online and using augmented reality to allow you crawl inside and check out the space before you buy it and get it home. This technology is already being used at retail by some retailers and could become more mainstream in the next few years,” Waite said.

Pop-up stores and other applications for augmented reality to enhance the shopping experience are also being tested by retailers. In South Korea, Tesco tested an application of augmented reality in a busy train station. Instead of billboard advertising along the busy walkways, the retailer showed images of grocery milk, bread, cheese, cereal, etc. Consumers could simply walk past and scan the image with a smart phone and it was added to an online cart. That test proved popular with busy Korean families, according to multiple media reports.

Waite also said retailers will also have various uses for augmented reality within their operations, warehouses and backrooms. He said they will be able use the technology to increase operational efficiencies. For instance, there are applications that can allow workers to quickly locate products in a crowded back room or warehouse when the complete layout is part of the application. He said when redesigning modular layouts for stores, workers and suppliers can easy see how the modular will appear in stores. The modular may be built in Bentonville, but through augmented reality a store manager in Denver can easily see a 360-degree view of a completed modular before it’s built and shipped.

“Technology and data are not a bad things when they’re relevant and helping retailers get to know customers betters and make their lives easier. It can get creepy when the knowledge becomes too invasive and doesn’t provide any real convenience. When retailers use technology to become more personal with their customers it can enhance the relationship. Think about going to a corner store and everyone there knowing your name and what you like. Now technology can help mega retailers provide that same personal touch. I know it sounds strange but technology is allowing retailers to create relationships and act more human with their customers,” Waite said.