Emerging technologies are changing the retail sector at an unprecedented rate. Industry watchers predict the global market for IoT (internet of things) hardware for retail applications will total more than $94 billion by 2025.
The market for virtual reality (VR) and augmented reality (AR) in global retail is estimated to reach $1.6 billion by 2025, according to research from ICX Association.
Walmart and Target continue to invest in technology innovations to run their burgeoning omnichannel businesses. As early as 2017, Target used augmented reality technology to allow shoppers to see how furniture would look in their own spaces using smartphone cameras that interacted with Target’s website. Target has also tested the virtual application of makeup online and in select stores. Walmart has been using virtual reality to train employees using VR goggles that transport employees into situations like working on Black Friday and cleaning hazardous spills.
But since COVID-19, the demand for all kinds of technology has exploded, said Deborah Weinswig, CEO of Coresight Research.
“We are seeing years of innovation in a matter of months,” she said.
For instance, as fitting rooms closed in brick-and-mortar stores last year, the concept of contactless fittings became a priority for some retailers. Brookfield Properties, a large mall operator, said last year it planned to add 3D body scanners that allow consumers to see which brands and sizes will fit them best.
Walmart recently announced the acquisition of virtual fitting room startup Zeekit for an undisclosed sum. Zeekit founder Yael Vizel, a former captain in the Israeli Air Force, has said her “Eureka moment” happened as she used telecommunications software to map the earth’s topographies. She said the human body is like a topography with mountains and valleys. She founded Zeekit five years ago and developed the application that was first used by Macy’s and has been tested by many top fashion brands.
Last year, Zeekit nearly doubled its staff to 40 to keep up with the demand. Vizel said that when shoppers can virtually try on apparel before making an online purchase, the average return rate drops from 38% to about 2%.
“Virtual try-on is a game-changer and solves what has historically been one of the most difficult things to replicate online: understanding fit and how an item will look on you. Zeekit will help us deliver an inclusive, immersive and personalized experience for our diverse customer base,” said Denise Incandela, Walmart’s top apparel executive.
Zeekit’s technology uses real-time image processing to map a person’s image into thousands of segments. Clothing is processed similarly, and the equivalent points of the two are mapped into one final simulation, Incandela explained. She said Walmart believes Zeekit’s technology is scalable and can also be used to create other fashion experiences, including the ability to build the world’s most extensive virtual closet and mix and match clothing seamlessly.
“These exciting technologies add a social element to the digital experience, allowing our customers to bring their unique personalities and preferences to shopping,” Incandela said.
Gartner estimates that nearly 100 million consumers will have an augmented reality shopping experience in-store or online this year. ICX notes that as retailers began to leverage technologies such as augmented and virtual realities, they will deliver more personalized experiences and bring products to life.
Ed Durbin, global director of retail solutions for VMware and researcher for ICX, said the shopping experience has dramatically evolved in recent years — from the robots that can identify shoppers’ purchasing habits to the immersive virtual reality experiences to the increased popularity of buying online and picking up in stores.
He said tech will drive the future of retail as consumers demand their shopping experiences improve. Retailers are expanding resources at unprecedented rates to minimize customer friction, improve customer experiences and improve overall efficiencies.
Retail businesses that leverage emerging technologies like AR/VR, IoT and mobility can offer more convenient, engaging and personalized experiences. Those who fail to adopt these technologies will fail to accommodate the growing demands of consumers and employees.
Michael Paladino, co-founder and CEO of Bentonville-based RevUnit, told the Northwest Arkansas Business Journal that retailers are beginning to integrate augmented reality. The increase in BOPIS (buy online, pickup in-store) is driving that innovation.
“We are working with one of our retail clients on an in-store experience that replaces printed labels in aisles with digital displays,” he said. “The displays will show labels and additional product content for employees and consumers. The idea is to eventually deliver AR/VR content through these displays to enhance the customer experience.”
He said RevUnit also has worked with a retail client that needed to integrate knowledge base access into the daily activities of its employees on the floor.
“To solve this challenge, we built a chatbot — an AI-powered virtual assistant that sits on top of a vast employee knowledge base,” Paladino said. “All employees have to do is pick up their device and verbally ask a question. Seconds later, the answer is provided.”
While the demand for AR/VR technology applications has never been greater in retail, Paladino said one of the industry’s and developers’ challenges is the lack of clean, aggregated data and content. He said the efforts require clean and accurate underlying data.
Charu Thomas, CEO of Bentonville-based tech startup Ox, said retailers continue to be challenged by inventory accuracy at the highest level. She said in stores, there are multiple people with the ability to touch inventory at the shelf — from customers, employees, third-party service providers and suppliers. She said the methods for tracking accurate inventory in retail stores are often infrastructure-heavy, whether it’s robotics, computer vision, smart shelves, cameras or even drones.
Thomas said COVID raised the urgency for retailers to ramp up their buy online, pick up in-store operations in addition to expanding delivery options. She said Ox works with companies to build technology tools that enable faster fulfillment as more stores are being micro-fulfillment centers in an omnichannel world. She said the Ox technology could also be integrated with robotics and machine learning for improved pick rates with optimal accuracy.
“The time for testing these emerging technology applications is up,” Thomas said. “Companies that want to best compete in this new world need to act and try to leverage the technologies with their business operations to drive improved performance on the back end and with respect to customer-facing applications.”
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