Can Technology Keep Brick-and-Mortar Alive?
CBRE Belgium
January 26, 2017
Can Technology Keep Brick-and-Mortar Alive?

The future of retail is still unknown, but one thing is becoming increasingly clear: While shopping online may be easier than ever, the physical store is not dead — far from it, actually. 

Brick-and-mortar stores are incorporating technologies such as smart fitting rooms to enhance the shopping experience and keep customers around. Although e-commerce offers personalization and convenience, the brick-and-mortar store offers new technologies and the human touch.

"But retailers have some work to do to get more tech-savvy in brick-and-mortar stores."
Uri Minkoff, president and CEO of Rebecca Minkoff, a luxury handbag and accessories retailer, says technology, such as self-checkout, can reduce the “intimidation” factor that Julia Roberts’ character, Vivian Ward, encountered in the movie “Pretty Woman.”

 “She walks in and there’s that intimidation factor of the sales associates,” he said at the 2017 National Retail Federation Big Show in New York, where he recently appeared with his sister Rebecca. Self-checkout is one way to keep the shopping experience more private, yet still be able to see and touch the items and try them on, he explained.

But retailers have some work to do to get more tech-savvy in brick-and-mortar stores. In a recent survey by IT consulting firm Capgemini, 54 percent of retail executives believed their stores haven’t gone far enough to adopt digital innovations.

Rebecca Minkoff stores aim to take the personalization features of e-commerce, in which sites suggest products according to customers’ interests, and combine them with the social aspects of the brick-and-mortar experience. It’s about providing a welcoming experience that inspires customers to come back once a week, according to Rebecca Minkoff.

“We made the user interface so easy, that if you are a 27-year-old girl or an 80-year-old woman, you will never feel intimidated by the technology, and that was really key,” she said. “Once you get into the fitting room, it really does mirror our website, so it’s nothing that you’re not already used to if you shop online.”

Keeping customers coming back to a brick-and-mortar involves providing a “human experience, [face-to-face] communication, all the things that you can’t experience from your mobile device,” Rebecca Minkoff said.

"Everything we do has a digital viewpoint or a digital lens."
Central to the retail transformation is a connected store, and Rebecca Minkoff has implemented fitting rooms that feature RFID-enabled smart mirrors. The mirrors display recommended products similar to what a customer is wearing and allow customers to make purchases from the tablets in the fitting rooms.

“Everything we do has a digital viewpoint or a digital lens,” said Uri Minkoff, who has a men’s wear brand and store of his own.

To embrace this digital transformation, Rebecca Minkoff’s organization is partnering with Pedro Torres-Mackie, founder and managing editor of Quotidian Ventures, a venture capital firm in New York, to launch a fashion-tech firm to fund emerging startups. Data warehousing company 42 Technologies will receive the first investment from the newly formed group. Torres-Mackie sees an opportunity to combine fashion and tech in areas such as deep learning and virtual reality.

Smart fitting rooms allow shoppers to gain some of the personalization they find online, such as using touch-screens to request specific sizes. At Rebecca Minkoff stores they can also control the lighting according to their preference and communicate with store associates.

“All of the communication is done via touch,” Uri Minkoff said. “You actually check out within there.”

For Rebecca Minkoff, her goal is to offer shoppers both privacy in their fashion choices as well as an upscale experience.

“One of the exciting things about creating our store was that we could cater to the woman who wanted to be completely anonymous throughout her entire shopping experience down to self-checkout and the one who wanted to be treated like a VIP,” she said. “I think we’ve allowed our store to curate both of the extremes and anywhere in the middle.”

Going forward, Rebecca Minkoff stores will explore how clothing interacts with the Internet of Things, according to Uri Minkoff. Also look for AI to impact customer service in the form of virtual assistance, he said.

As retail stores incorporate technology such as augmented reality, IoT, beacons and deep learning to gain more insight about customers and make the in-store experience more enjoyable, online and retail will become truly seamless.

“It really becomes a holistically 360 experience,” she said.

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