WIRED Retail together with Valtech is our annual exploration of the ever-changing world of commerce, featuring leading technologists, entrepreneurs and creatives innovating in sectors as diverse as robotics, virtual reality and the future of home delivery. Here are some insights from Valtech's presentation.
It's all about the experience
Retailers are no longer only selling products, but experiences, and that's increasingly blurring the line between digital and physical worlds at the shoe store, supermarket and beyond. Businesses who don't realise that shift won't survive, let alone thrive.
You have to accept the idea that what used to work may not work anymore. Shoes can't simply sit "dead" on shelves, shoppers need to be able to interact with them. The line between where the physical world stops and the digital world starts is increasingly blurred and that line is going to go away.
Product is not enough. As a traditional retailer, the focus has been 'let's find the exclusive product so customers see our store as a destination. That's no longer enough. The difference is the experience. The experience becomes the product.
The new in-store experience
A trip to the mall in 3D
What does that mean for your weekend trip to the shopping centre? Potentially, big things; Valtech has already helped a Canadian retail firm roll out touchscreen displays in its malls with an interactive, 3D-animated hostess who will make gift suggestions ahead of Christmas. It's already being used in Montreal's Eaton Centre, and is set to roll out more widely before the holidays.
Shoes in an augmented reality
In store, interactive displays could fill in for the lack of specialist expertise of sales staff. Sports brands might offer in-depth details on running shoes instore via an augmented reality tool, for instance; pick up the shoe and a sensor embedded in it triggers the display of information on a nearby screen; turn it over to examine the tread, and the display explains the key engineering information that might help runners make their decision to buy.
Frying bacon in an immersive virtual reality
Of course, if you're buying shoes, you can at least try them on and walk around the store, or do a few sprints up and down the aisles, but what about if you're refitting your entire kitchen? They're 'dead products', you're not going to go up and start cookin in the store, and that means you won't know exactly how to use that new hob, or how well it cooks the dishes you like to make.
To address that gap, Valtech worked with appliance maker Thermadore to develop an immersive virtual reality experience so customers can pop on a headset get a better sense of how their new kitchen will fit together and work - though you still can't fry up a bit of bacon in store.
Safe is definitely risky
All of this means the future of retail is exciting, but also intimidating. Previously, innovation leapt forward in five-year cycles, that's not fast enough for leading retailers or startups, but funding it all is problematic given budget cycles are built on a much longer term.
Two major symbolic milestones have marked the retail world: BestBuy's slide from innovative retailer to struggling shop, and Amazon pipping Walmart to largest market capitalisation for retailers in the world. The retailer which has the highest value in the world has no (only one) store.
An advice to retailers is to empower innovation by starting a feedback loop with customers, better syncing budget cycles to allow new ideas, and to watch startups to see not only what they're creating but how they work closely with customers to build their experiences. Safe is definitely (too) risky.