How Google Glass, Indoor Location, & Mobile Shopping Can Save Retail

3/15/13Follow @ByteLight

Retail is changing. Roughly $3.7 trillion in annual U.S. spending is up for grabs.

That’s a lot of money.

Some technology theorists, including Marc Andreessen, believe the change will be revolutionary in nature—predicting the outright death of brick-and-mortar retail. The theory is that soon enough, visiting a physical store will be as archaic as reading a physical piece of paper for the news. Physical space is expensive. Digital space is cheap. And shopping malls don’t follow Moore’s Law.

If you view shopping as an optimization problem, this outcome feels inevitable. Most technical folks think this way. I order almost everything on Amazon. It’s easier, less expensive, and oftentimes, more convenient. I’d rather have products appear on my doorstep.

But that’s a mistake. Shopping isn’t an optimization problem. Shopping is an experience. The change then is evolutionary rather than revolutionary, and there isn’t much room left for evolving the experience of e-commerce. Despite all of the people experimenting with social buying, subscriptions, and gamification, at the end of the day you’re still sitting in front of a computer screen.

Being immersed in a physical environment is completely different. There are sounds, sights, smells, and people. You walk into a well-designed space and a well-dressed salesperson asks you how your day is. A greeter says hello to me as I walk in. I feel important and valued. This can’t be recreated online (yet).

If you’re a brick-and-mortar retailer, the experience is your biggest advantage. Figuring out how to combine physical assets with digital ones will determine who survives—and who doesn’t. It’s a major reason why the retailers we’re talking to are so excited about the possibility of Google Glass. The idea of utilizing their storefront as a “custom showroom” for their own goods (not others) may finally be attainable. Furthermore, it will allow the shopper to seamlessly navigate from the storefront to store floor, while simultaneously shifting between physical and digital worlds.

Connecting physical and digital worlds

In advance of Google Glass and other augmented reality headsets hitting the market, the disruptive force evolving retail today is mobile. Online retailers physically invaded stores with the smartphone at the beachhead. Fearful brick-and-mortar retailers initially backlashed against it. They used Wi-Fi jamming equipment, just as the RIAA sued teenagers for downloading songs 10 years ago. Having been one of those teenagers, I understand that resisting change is futile. If you don’t evolve, you die. The smart retailers are evolving, and embracing new technologies to improve the experience of physical commerce.

Our company is working with five of the top retailers in the world, and it’s clear they recognize this idea. They, along with others, are turning mobile to friend, not foe. Many retailers are investing in wireless infrastructure, supporting the idea of the connected shopper. Retailers like American Eagle and Target are using Shopkick to enhance the shopping experience. We are in the first inning of a multi-trillion dollar transformation of how we buy.

The future of retail is in combining digital with physical shopping to win the last three feet.  Mobile is the delivery platform. And indoor location is the missing link. By combining the two, retailers are able to engage with shoppers at an unprecedented level of granularity. Knowing whether someone is standing in front of Cheerios or TVs is a big deal. Combining this knowledge of current physical location with online shopping behavior, purchasing history, and real-time inventory data allows retailers to provide a compelling physical shopping experience that’s better than Web-exclusive experiences. The end result will be higher conversions—and more satisfied customers.

Returning retail to its roots

When retail started, it was a marketplace. You visited a store because it was close by. The owner knew your personal preferences. There was a sense of personality and trust. If you needed help finding something, you asked one of the many store associates to help you out.

When the big-box model of retail took hold, the personal touch was lost. Stores were deployed to serve large swathes of customers. The familiar associates disappeared. Stores were designed to get you lost.

Indoor location and mobile finally allows retail to return to its roots. Your smartphone (and soon enough, wearable technology like Google Glass) will become your personal shopping assistant. It will help you find products, order them, ask for help, and make informed purchasing decisions. Location awareness will drive the entire journey from intent to purchase.

Mobile is set to influence $689 billion of U.S. retail stores by 2016. A lot is at stake. The future is about combining m-commerce, e-commerce, and physical commerce. The behavior of consumers will continue to evolve along with new technologies. But in the end, it’s all just commerce. And the retailers savvy enough to evolve ahead of their customers will be in the best position to serve the shoppers of tomorrow.

Dan Ryan is the co-founder and CEO of ByteLight, a Boston-based startup that provides indoor location with lights. Follow @ByteLight

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  • Richard

    Good read. In the UK we’ve had some big retail names close down, like HMV and Jessops, and everyone speculates it’s because they didn’t have a strong enough online or mcommerce model.

    I personally like shopping. I like browsing the products and being able to physically touch them. But as you say, this isn’t enough to entice people away from their screens. There is a missing element which adds personalisation, experience and character, which you nailed on the head in this article.