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The Future Of Retail: Google’s Online-Offline Vision

This week I attended Google’s Think Retail event which showcased the latest developments in its online retail product offering and the trends shaping the retail landscape. It’s abundantly clear that the future of retail, rather than online overtaking offline, is all about online and offline working more collaboratively than ever. We cover the essential updates from Google and what retailers large and small need to know to stay ahead.

ANTICIPATING THE MINDSET OF THE USER

This is key in order to be able to deliver the best options to shoppers. Google is trying to become much more predictive with information that is relevant for shoppers with developments such as anticipatory algorithms and reorganisation of pictures by places and things (which could be a nice boost for comparison shopping!).

Google is developing its machine learning capabilities further with google photos, enabling images to be organised by places and also things (e.g sky, dogs). This is exciting for me because my phone could easily group together pictures of my puppy through time, which makes me happy!

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Outside of personal use, what could this mean for visual mediums like Facebook, Pinterest & Instagram. Maybe photo types could be linked to what you already have an interest in, which could then lead to much more tailored advertising.

BUT DON’T IGNORE OFFLINE

Connecting with customers in moments that matter is still key. Online is being used to enhance offline, rather than subjugate it and we’re seeing this play out in interaction, immediacy, visibility and ‘phygital’ (physical-digital), all of which are encouraging the use of devices within store.  Beauty retailer Sephora’s Innovation Lab is a great example of this, showing how walking into a store is still an integral part of the consumer journey, alongside futuristic digital advancements that enhance the customer experience – it’s the harmony of the two elements that is crucial to retail’s evolution.

A pertinent example of this is Facebook’s recent launch of tracked ads for Facebook stores, allowing advertisers to map their physical store location. When a user who clicks on the ad visits the bricks-and-mortar store, Facebook will be able to tell using phone location services. This data will be made available to advertisers – allowing them to connect the dots between online advertising and offline purchasing.

Here at Croud we believe the development to be a logical and expected progression that for advertisers and retailers will provide further actionable insights with which to develop their businesses. If you accept the not-unreasonable premise that better targeted ads mean a better experience for consumers, then everyone wins. However, if you are in the psychographic that feels that tracking is creepy and a further invasion of your privacy, then you won’t be so accepting, especially as it seems that the only way to avoid it is by turning off location services (although that means that apps like Uber stop working).  For customers / Facebook users, the reality is that not paying for online services such as Facebook means taking chances on increasingly sophisticated advertising as a fair exchange.

RETAILERS MUST ADAPT TO THE NEXT GENERATION

This technology further underscores the role of digital in re-calibrating the customer experience to keep up with consumer demands rather than replacing it entirely. New ways of positioning the shopping experience such as AR are shifting the norms and raising the stakes for how retailers can keep customers interested. We’re also seeing things like emotional recognition via technology – Bentley’s inspirator app gauges facial reactions in order to provide a personalised experience, which is by all means exciting but we need to ask the question how technology such as these add genuine value.

Ever increasingly  tech-savvy shoppers will simply not accept the world as it is proffered to them, which means that retailers must up their game to keep them interested. This means being experimental, prioritise building a community and doing it with conviction. In practice, this looks like creating a ‘tomorrow store’ – an immersive retail space that people want to get lost in.

STRATEGIC DIGITAL TRANSFORMATION

Bertrand Bodson, Chief Digital Officer of Home Retail Group spoke about Argos’ strategic digital transformation that has led it to where it is today as a £4 billion business, 50% of which is online. The high street stalwart has successfully transitioned to a customer-first approach with universal appeal – there is more product choice available, faster and it is operating at a leaner and more flexible costs base. Bodson explained that working in this way has allowed Argos to open more, smaller stores in order to reach more customers at the same time as being more flexible online.

This, along with a delivery partnership with eBay has also helped Argos reach its position as the UK’s third largest online retailer. Mobile is of course key for the chain, and a well optimised mobile site teamed with quick click to order processes means that it’s now sixty seconds from order to collection in-store.

GOOGLE’S NEW MOBILE PAYMENTS

Florence Diss, Google’s head of EMEA commerce partnerships addressed the fact that 75% of shoppers are using their smartphones when retail shopping as an aid, yet less than 4% of transactions are actually happening on mobile. How can Google fix this? Well, mobile payments have to become universal (Google Wallet failed because it wasn’t, read more here), easy, valuable and invisible like Uber  – which Google is striving to do, regardless of the phone (following its introduction of Android Pay, launched in the UK on 18th May 2016). In a new development, users will be able to view their receipts linked to the store they bought their goods from on Google maps; a nice touch to make payment frictionless.

THE FUTURE OF MOBILE ASSETS

Shane Cassells, Google, Mobile Transformation Specialist told us how apps are trying to become more like the mobile web with features such as deep linking and indexing.

Google is supporting progressive web apps to leverage better, faster experiences; it’s essentially merging apps with websites so that it’s easier to maintain and keep developing for companies. A great example is the Indian e-commerce app Flipkart  – the first 100% progressive web app (check it out on mobile!)

GEOLOCATION = LOCATION + PROXIMITY SUPERPOWERS

We’ll see an increase in digital being harnessed to build loyalty in-store, in the integration of personalised loyalty schemes with geo-location. We’re already seeing this with stores such as Starbucks and Toys R Us offering customers a voucher tied to the loyalty card when you are within a specific radius of the store in the US.

Peter Lewis, Product Manager at Google spoke about Google’s Eddystone open beacon format – technology that sends nearby notifications to customers’ devices telling them what is around them right now that they can interact with. This is good news for retailers, who can more precisely work with in-store measurement, reliable place detection and remote / programmatic management of content.

Speaking of programmatic – TVTY is another example of linking offline to online and capitalises on competitors’ TV activity. The technology allows viewers to turn their  programmatic display ads on or off depending on what the user is watching on TV!

CHINA IS LEADING THE WAY

Stephanie Rieger, Strategist and Anthropologist explored how, for customers in China, their main shopping method is online and in particular mobile. China’s retail industry is much more mobile e-commerce focused via marketplaces (such as Tmall and Taobao) rather than individual retailers. This focus on large marketplaces is already transposing to other territories – we can see this in Africa with Jumia.

RADICAL AGILITY

Jerome Cochet, SVP of European retail giant Zalando coined this term for the connection of people to fashion by retailers, in a nod to how media consumption is now essential for any experience.  Interestingly, Zalando sees itself as a tech company now rather than a retailer, due to the fact they have invested so much in engineers and ensuring they are at the forefront of technology in online retail.

GOOGLE’S ONLINE-OFFLINE RETAIL VISION

Its new retail products are being developed to offer people the most assistance possible when they are ready to shop, both online and offline said Jonathan Alferness, VP product Management, Shopping & Travel at Google. Shifting with shoppers in this way is crucial to future retail success, emphasised by Google’s launch this summer of Customer Match For Shopping  which allows retailers to re-engage loyal shoppers as they shop on Google. This means that retailers can tailor campaigns even more based on their CRM data.  Local inventory ads within shopping is getting new developments too, with local in-store pick up links going live soon.

One thing’s for sure: it’s going to be an exciting few years ahead for the online retail space and I’m interested to see how these developments play out for retailers around the world, both online and offline.