Five ways the high street is fighting back
We are currently spending a staggering £1.2 billion a week online, but that doesn’t mean we’re all sat indoors 24/7, credit card in hand, glued to our computers. The latest Barclaycard data shows that although online spending grew 3.8% year-on-year in January, spend in physical shops also increased.
High street retailers are battling to keep people coming back and that involves staying ahead of the curve - it seems those who adopt new technology and adapt to changing consumer expectations for a better ‘experience’ are those most likely to succeed.
Recent Barclaycard data on consumer spending habits shows that the growth in spending on experiences is much bigger than that on material goods. In short, more people are opting for things like West End shows rather than shopping for clothes. So, while the best bargains might be available online, the best experiences can only be lived, in person, and that’s where the high street is at an advantage. For example, Tesco is opening more coffee outlets inside stores to give customers an incentive to battle through the weekly shop.
The high street itself is also changing shape, with a proliferation of temporary pop-up shops, cafes and up-market fast food joints to mix in with more traditional outlets. Even experiential outlets are gaining prominence. These are the sorts of places that give people the chance to take part in Crystal Maze-style group games, and they’re popping up in places we might expect to see more traditional retail outlets.
Making the payments process easier is crucial to a better customer experience, and if one of the draws to the high street is the experience of a good meal, it’s only rational that the eating experience should be improved. Barclaycard recently unveiled its ‘Dine & Dash’ trial, a new solution that enables diners to simply walk out after eating – bypassing the traditional bill-paying process. You simply download the app, then tap, eat and go. Italian high-street chain Prezzo is currently trialling the technology.
Dine & Dash comes hot-on-the-heels of another invisible payment concept, grab+go that Barclaycard piloted last May. Grab+go transforms a smartphone into a ‘pocket checkout’ and so far has been piloted by over 700 Barclaycard colleagues across five sites in the UK and US. Like Dine & Dash, it removes the physical act of making a payment by processing it in the background.
Checkout-free shopping is very much where high street retail is going. Amazon’s first checkout-free retail store - which launched in Seattle last December - shows that there is faith in bricks and mortar. Cameras are used to track when a product has been taken off the shelf or put back on, and puts them in a virtual cart. Amazon calls this combination of data processing “sensor fusion”; it’s able to tell what you've bought without taking it to the counter or physically paying for it. The sum of the products you've taken is then charged to your account, allowing you to just walk out of the store. Amazon Go is set to open to the general public from early next year and the launch of stores like this show how combining the ease of online payments with the physical experience of shopping allows retailers to borrow from both worlds, benefitting the customer.
Biometrics: easier payments
On the subject of making it easier to pay, we’ve already seen that contactless payments can save 15 seconds for each transaction when compared to cash, taking biometric payments could speed things up even more.
Facial recognition, fingerprints and retina scanning are three methods that have gained prominence, but vein mapping, which scans the unique patterns inside your index finger, is also seeing big investment. At the till, you touch a specialist device that uses infrared light to identify your unique ‘vein map’. This means both the authentication (previously a PIN number) and the card (either a plastic card or digital app wallet, wearable or phone) are both effectively registered to your finger. This biometric signature is a one-of-a-kind personal identifier, there’s a one in three billion chance of finding someone else with the same finger-vein print, so it’s set to be one of the most secure ways to pay. Fingopay - a version of this technology - is currently being trialled at Brunel University.
Retailers are already capitalising on Virtual Reality (VR) to improve the customer experience. Topshop’s flagship store in London recently installed a virtual waterslide that allows customers to take a twisty-turny ride down Oxford Street, but of course allowing them to remain completely dry in the comfort of the store. Augmented reality has more direct applications though. Most of us have spent time turning ourselves into dogs or angels using apps like Snapchat, but retailers Wayfair and Ikea are enabling customers to see what the latest trendy chair or cabinet would look like in their homes using the same technology. If customer services are required, shoppers can summon the VR assistant for some face-to-face help, through a VR headset.
The possibilities here are endless. An example of the next step in the evolution of VR is the Microsoft HoloLens. The HoloLens headset brings 3D holograms into the real world, enhancing our perceptions of digital content. The headset is still a prototype being developed by Microsoft, but it’s thought that NASA are in discussions to utilise the technology.
Bright future for the high street
Add these technical developments into the surge in payments innovations and the retail experience is set to radically change in the future. VR and AR help to enhance traditional bricks and mortar stores with superimposed images of the real world. Payments continue to become more frictionless because customers have e-wallets or logged payment credentials that can be invoked directly with ease.
The rate of change in physical stores is inevitably slower than online because physical changes to retail space can be costly and time-consuming. With technical developments and the fast pace of payments innovations, the retail experience is set to radically change. Retailers who adapt will not only offer a better experience but could turn online aficionados into high street supporters.