Augmented reality, which is yet to be successfully executed by any brand or retailer, will finally have its breakthrough year.
Long-heralded technologies will finally have real impact on the retail sector in 2018. But the success of augmented reality and blockchain will be driven by consumers’ Urban Mindsets and expectations around hyper-convenience. The technologies that succeed will be the ones that move from gimmicky experiments to practical uses which satisfy consumers’ need for attainment and brands’ desire for loyalty.
Yet retail will not be subsumed by materialistic narratives. Ethical consumption will still be an important trend, but will be shown in new ways, particularly through sustainable spending. No longer satisfied with buying products for the sake of it, consumers will look for more fulfilling spending moments that enable them to reduce their impact by spending consciously.
As consumers’ conscientiousness about their spending continues to grow, next year will be defined by more digital tools coming to market that will help shoppers evaluate the sustainability of their purchases.
The drive for sustainable spending is being pushed by nancial services such as online bank Aspiration, which has a tool within a mobile app that encourages spending with a conscience. The rm analyses data points of thousands of businesses to generate an individual Aspiration Impact Measurement (AIM) score. This valuation is based on how well the company treats its employees, as well as its environmental impact.
A vast majority (94%) of consumers say they are more likely to be loyal to a brand that offers full transparency, and brands that do not highlight their sustainability credentials risk losing out on an opportunity worth £859.7bn ($1.1 trillion, €966bn) (sources: Label Insight, Unilever). With consumers looking for brands they can trust, we expect sustainable spending offerings to grow in the coming months.
Industry Innovator: GatCoin
Big idea: Transforming the retail loyalty system by letting brands launch their own digital currency tokens that can be spent not only with their brand, but elsewhere or exchanged for cash.
Why it matters in 2018: Loyalty programmes have been suffering, and the ramifications are serious. Market research firm 500friends has found that consumers who are unsatisfied with loyalty programmes are more likely to abandon a retailer or brand altogether. As retailers try harder to regain customer loyalty in the coming year, GatCoin will give consumers a sense of security and control over their spending.
Thanks to the launch of Apple’s iOS 11 and its ARKit augmented reality (AR) application development platform, AR will finally enter the mainstream in 2018, and will have a huge impact on retailers and how they reach their audience.
Until now AR in retail has been a novelty, but in future the successful retailers will be those that use it to fix a problem. Both Amazon and Ikea are showing AR’s potential in the inspiration phase of shopping, with Ikea’s Place app boasting 98% accuracy in scale, and also rendering 3D images to react to light and shade.
In the US, home improvement store Lowe’s has launched an AR measuring tape that enables users to take measurements of furniture and spaces using their smartphone’s camera. It is the ability to bring AR to scale that could mark 2018 as the turning point for Augmented Retail.
Next year will be pivotal for the Chinese retail market, especially in terms of cross-border growth. Cross-border retail sales, which include those shipped directly to shoppers from overseas or that are from warehouses in China’s free-trade zones, are expected to hit £86.2bn (Rmb758bn, $114.2bn, €96.8bn) in 2018 (source: McKinsey/iResearch).
For overseas retailers keen to attract Chinese online buyers, the coming year will be crucial to attract new loyalty before the government intervenes with new regulations at the end of 2018. Live-streaming will be a vital discovery tool for local consumers. It ‘introduces brands to a new demographic of customers that are unaware you exist on Facebook, Instagram, or even at all,’ explains Liyia Wu, founder of live-stream platform ShopShops.
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