The Lux List / Business of Luxury

Augmented Reality at Retail Destinations shows the Future of Luxury Consumption

As selected luxury malls in Singapore incorporate Augmented Reality technology, blurring the line between online and offline luxury retail, there’s great potential for deepening customer relationships and engagement

May 25, 2020 | By Jonathan Ho

 

Almost four months into the COVID-19 pandemic, businesses across international markets face the fact that whatever “new normal” is, it remains uncertain. For the fashion industry, stopped orders and supply chain disruptions have resulted in high street brand losses and some bankruptcies.

With the lockdowns and threats of a second virus wave, customer travel both domestic and overseas are at an impasse — whether its weekend shopping at your local mall or destination shopping — brands need to discover new strategies to attract and retain homebound shoppers. As countries move into latter stages of the pandemic, so too has media consumption increased across all in-home channels: web browsing is up 70%, followed by 63% increase in  (traditional) TV viewing increasing while social media engagement has rocketed by 61%.

Overseas travel constraints present a particular problem for luxury brands targeting the Chinese market, in which a large proportion of luxury spending occurs overseas. In 2018, roughly 70% of Chinese luxury consumption took place at travel destinations according to McKinsey’s China Luxury Report 2019.

Phase 1 of New Normal: “Going Dark”

According to data intelligence consultancy Kantar, many brands and manufacturers are considering ‘going dark’ in order to save costs with the reasoning that since consumers are tightening their belts, consumption is at its lowest. However, Kantar believes that a six-month absence from TV is going to result in a 39% reduction in complete brand communication consciousness, possibly delaying recovery in the post-pandemic entire world. Having said that, a potential new out-growth of nascent augmented and virtual technology have noticed a recent shot in the arm since brands experiment with new channels beyond conventional advertisements in an effort to re-discover lost ground ceded to the coronavirus pandemic.

Ms. Bell Beh started Buzz AR, while studying Technology and Law at UC Berkeley, and recently, she’s been the pioneer in implementing this emerging technology at Singapore’s premier luxury shopping destinations with participation from the Singapore Tourism Board.

 

 

 

Augmented Reality at Retail Destinations shows the Future of Luxury Consumption

Retail shopping has been enduring a reckoning over the last 10 years and the coronavirus pandemic only served to quicken the growing trend towards digitisation of luxury shopping experiences: Stores will be like websites and websites will be like stores. Several emerging technologies will play a predominant role in shaping the way that people experience shopping. Augmented Reality (AR) is just one of those technologies, but it’s one that will take a central point. Why? Because if you’re trapped at home or reluctant to enter high traffic locales with strangers (whose potential viral loads are unknown, you’re going to want brand flagships to bring themselves to you. Given the ubiquity of high speed internet and the highest household computing device penetration rates in modern history, the powerful combination of Augmented Reality (AR), Virtual Reality (VR), and Artificial Intelligence (AI) will make the future of luxury shopping a reality.

Phase 2 of New Normal: Post Pandemic Retail blurs Offline with Online

Sears and Toys-R-Us were the two greatest profile retail failures of 2018, but since the pandemic struck we’ve seen giants like JC Penny and Macy’s follow suit. In Southeast Asia, Singapore’s retail sales have fallen for the seventh consecutive month in August, compared to a year ago. Against a backdrop of e-commerce growth with Amazon Prime at Singapore, Lazada, and Shopee, spending a cool $1 million for Cristiano Ronaldo to star in a 10 second advertising spot, conventional retailers and direct-to-consumer manufacturers will have to adapt to an increasingly complex retail environment. tWith this being the greatest recession since the Great Depression, brands and businesses will need to rethink the use their shopfronts, while utilising technology and data in smart ways.

 

How bricks and mortar can survive and thrive

Some of Singapore’s pre-eminent luxury shopping destinations are showing a potential way forward by adopting the emergent technology provided by Ms. Beh. Buzz AR is implementing AR wayfinding, a process of introducing fun, unique elements of guiding footfall in one of Singapore’s labyrinthine luxury shopping complexes. Whether its a simple matter of Mario or a game of Mario Kart guiding you to interesting shopping destinations, Buzz AR is but one element of a growing body of apps that have seen brands adopting. Most recently the absence of runway shows have driven designers like Marc Jacobs, Sandy Liang and Valentino to showcase their latest styles in Animal Crossing, the recent Nintendo smash hit game.

Direct-to-consumer brands understand they’re not only selling a product, they are adding value to their customers’ lives.

Even post-pandemic, AR and VR technology like the kind that retailers and retails points are adopting through Buzz AR also raises to the next level other physical retail elements, further blurring the line between off-line and online interaction – this truly is the futuristic vision where shopping is a matter of 24 hour convenience independent of operating hours and physical dimensions (visiting one is a matter of choice, and no consumer has ever been unhappy about more choices):

  1.  Point of purchase technology: “where brick and mortar shops create unique, one of a kind experiences for shoppers,” states CEO of MVP Interactive. “Whether conveniences are subtle like additional lounge furniture or more sophisticated like focal point of sale technology, the encounter will need to feel unique and distinctive to the shop.
  2. increase engagement digitally: retailers have to perfect the craft of participating with their audience digitally — creating seamless shopping experiences, believing mobile-first (like their viewers ), building a sense of community and mastering content development to foster loyalty. The focus now is about bringing the new experiences to life in the physical universe.
  3. Through the use of AR Billboards: a true shopping experience is created engaging and relevant through User Centric advertisements, an improvement over the one dimensional content centric advertisements, where consumers are continuously bombarded with exactly what they do not wish to see.

While some Singapore luxury malls are implementing AR Wayfinding during the initial roll out, the next stage includes the use of AR Billboards and this is where Ms. Beh truly believes the future of luxury retail lies. Think of it as Silicon Valley ‘Big Data’ meets luxury retail: in a universe of large data, new digital channels such as AR Billboard collects (1) user level information; (2) location based data from consenting users. This data set further allows these luxury retailers to project overlay data onto consumer mobile devices that just flash what users want to see if they enter a shopping mall, even in the restroom waiting areas or storefront, even since they navigate from point A to B.

As a result, the ads are still immersive, interesting and targeted. It increases footfall, user experience while simultaneously understanding customers’ spending behaviour and preferences. Once users launch partner’s mobile apps, like Trip Advisor, the user can navigate while catching codes/ flash links on the augmented overlay billboard.

Gucci, an early adopter of Augmented Reality

Kering Group flagship, Gucci has been persistent with updates and new features to drive direct e-commerce. Since launching version 6.0 two months ago, the app has already had five updates, the latest being the unveiling of its new Augmented Reality feature. Upon going into the interface, users can view exactly what Gucci’s new shoes, eyewear, hats, and lipsticks appear like on themselves through AR try-ons, which they can also use to explore decorating their fresh workspace/home with Gucci furniture. Additionally, users can also play arcade games and view a gallery of places that have cultural connection to the fashion house.

That said, the luxury industry is steeped in centuries of tradition and technology remains a blind side as East Asia, in particular China, continues to drive the industry both as its growth engine and as its second largest group of consumers (in terms of the East Asian region). Since 2017, big e-commerce players like Alibaba have made AR and VR in-roads into a “new retail era,” where online and offline merchants learn from each other and provide a brand new shopping experience for consumers.

Augmented reality would also improve the process of buying and selling homes — luxury realtor Sotheby’s International Realty is bringing AR into its international listings. Working in partnership with VR/AR developer Rooomy, Sotheby’s Curate is a virtual staging app that enables an empty home to be filled with the prospective buyer’s choice of interior decor and furniture, then viewed in real-time 3D.

Technology enablers and the in-store encounter

The most innovative brands are already using technology to enrich and curate the customer experience in-store, and those which haven’t, will be playing catch-up. Now, brands can display product information and inventory on tablets, and can use their understanding of customers to customise the encounter in-store, by way of example, taking away the requirement for physically processing payment.

Using touchscreens to discover more about a particular product, AR and VR tech like those of Beh’s Buzz will take away the awkwardness of the sales experience where a customer can be potentially perceived as difficult if they happen to be fickle or unsure of what they really want. An integrated purchasing experience as well as the pairing augmented reality experiences means that consumers get the benefit of not feeling the pressure of taking up a sales person’s time with the added benefit of browsing and trying (albeit virtually) multiple product categories. While  self checkout kiosks will eventually be commonplace in regular retail, with cellular point of purchase choices similar to what is used at Apple stores, the last step of a consumer’s journey in luxury retail could be simply either to have a white gloved service deliver to your home or to summon a sales associate to wrap up your item to go.

“Luxury brands will survive based on their clientele and those who will fail are ones that don’t reinvest dollars into experience inside their stores or ones in which their products can be found heavily discounted online.”

What’s Going to separate Successful merchants from the Pack

  • Early adopters will win this game: The brands which realise this soonest will benefit the most; those who choose to ignore it will face the same fate that travel agents faced when airlines started selling tickets online. Most major retail brands seem to be aware of the imminent transition and are already studying how and when to innovate. As Bridget Dolan, head of Sephora Innovation Labs explained, “we want to stay ahead of our customers in digital technology — but not too far.”
  • User centric information: Successful retailers will be the individuals who can comprehend the varying requirements and expectations of their clients — whether in the digital or physical world. Leveraging consumer centric data and putting customer experience at the heart of decision-making is the key to creating powerful, omni-channel (instead of cross-device) journeys.In addition, he stresses the use of data. “For the mid to high end of retail that the expectations from store experiences are high, and it’s not just about the usage of technology, but also how it becomes seamlessly incorporated to the shopper’s journey. One which can begin in any channel and culminate in a different. Having the capability to cross correlate the shopper across all accessible interaction stations, and supplying store staff with the relevant data and actionable information that might assist them influence a purchaser greater, is what’s going to set them up for success.

 “A significant portion of the population of developed countries, and eventually all countries, will have AR experiences every day, almost like eating three meals a day.” – Tim Cook, Apple CEO

Engagement now, Revenue over time.

AR brings content which is designed to keep our attention spans for longer periods through visually immersive articles and conversational talking points. .AR advertisements also drive earnings directly. AR lenses are developing in a way that allow consumers plant and picture products in their immediate surroundings. These can be demonstrable and extremely engaging advertisement experiences on Facebook and Snapchat, such as attempting on fashion accessories.

While Loewe en Casa is running an ongoing series of online workshops and events through Instagram Live. The project, which concentrates on arts and crafts, including artistic collaborators and Loewe Foundation Craft Prize alumni is still very much a passive experience. Using Facebook’s Camera Effects stage, Michael Kors built a campaign which lets users jump out of a News Feed ad to some front-facing camera activation which almost strives on sunglasses. Nike spotlighted a new shoe release by allowing users put it virtually in their space then walk around (and purchase ) the shoe.

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Topic II of #PradaPossibleConversations is "Love in the Time of Coronavirus," a candid discussion between artist/filmmaker #FrancescoVezzoli and philosopher #EmanueleCoccia that took place on #InstagramLive on April 21, at 6pm CET. Now on IGTV. The conversation comes ahead of Vezzoli's newly announced @FondazionePrada project, "Love Stories," an exploration of emotion through the language of social media.⠀ "Love in the Time of Coronavirus" is part of a series of closely considered conversations that focus on the cultural impacts of our quickly changing world.⠀ With each conversation #Prada will donate to @UNESCO – an organization whose work during the #covid19 pandemic focuses on over 1.5 billion students worldwide who have been affected by school closure.⠀ ⠀ ⠀ Discover more via link in bio. ⠀ ⠀ ⠀ #StaySafe #StayHome

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That said, Loewe’s project provides customers a rare look into the artists’ studios and skills, Loewe finally wishes to demonstrate how far it cares about craftsmanship and the people behind it and that still is a real emotional connection provided by a virtual experience of live demonstrations revealing ancient Galician basketry and weaving techniques by the likes of Chilean jewelry artist Rita Soto, and Spanish artist Álvaro Leiro.

Aside from doing workshops and tours like Loewe, Prada has initiated a string of digital discussions connecting great minds in style, art, architecture, theatre, and thought to converse with one another, creating a romantic user-experience much like a Zoom call.

Foot Locker along with Jordan Brand similarly invented an AR effort to run on Snapchat. Utilising Snapchat’s “Advertisement to AR” format, users up on a related story to show a lens that is branded. In this case, the lens featured an AR animation to get a new shoe release, and ability to purchase the shoe.

This makes AR a “complete funnel” advertisement format such as brand awareness and direct-purchases. This attracts increasingly data-hungry and ROI-oriented advertisers, and breaks down AR adoption barriers.The Singapore luxury retail scene is simply ahead of the curve.

 

 


 
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