Let's get virtual

BY Australian Retailers Association
16 January 2019

Virtual changing rooms might be in fashion, but are retailers using this new technology effectively?

There has been quite a lot of talk around virtual changing rooms but have you ever used one? Are they really the next best thing?

Changing rooms should not only allow customers to fully immerse themselves in an experience historically exclusive to inside a retailer’s physical store, but they should also be fully integrated within the retailer’s broader omni-channel service and fulfilment capability. With the majority of retailers still grappling with the logistics of how to integrate the online and in-store experience, there is a risk that – without proper investment in integrated back-end systems – the technology could miss the mark and end up having a detrimental effect on the customer experience. Which in turn could well have a negative impact on customer loyalty and sales.

Interacting with a single retailer in multiple channels needs to be seamless. The brand should be represented in the same way; offering the same promotion online and offline and linking the channels together with services like Click & Collect. Often, though, the seamlessness in operations isn’t as smooth as the front end. Fulfilment operations and store networks operate in semi-silos, legacy systems being pushed to their limits doing things they weren’t designed for and virtual sticky plasters in place helping to integrate disparate systems together and deliver what the customer wants. However, if retailers invested in their front-end customer propositions, retailers could create new and rewarding customer experiences.

With the right supporting systems underpinning the virtual fitting room, the retailer has at its disposal a unique service capability not available for bricks-and-mortar stores. Consumers are able to literally walk through a virtual store from the comfort of their own living room if they wish, with the store’s layout, inventory and fulfilment options fully customised to meet the needs and preferences of each individual customer. With access to purchase history, wish lists, shopping baskets, preferred fulfilment options, and importantly a real-time picture of available inventory from across their entire network, retailers can tailor the customer’s shopping experience at the same time as maximising the likelihood of converting a sale and utilising the engagement to cross-sell and up-sell.

Further, the retailer can serve up a range of fulfilment options with algorithm-driven technology. This system automatically calculates the cost of fulfilling an order with inventory from different network sources and via multiple potential delivery services, ensuring a profit is made on every sale regardless of the delivery option and irrespective of whether those goods are returned.

I think we can all agree that virtual changing rooms can undoubtedly play a key role in bringing the online and offline world together. And they are capable of being much more than just a ‘smart’ mirror. With the right, supporting, back-end technology infrastructure, they have the power to become an integral part of the shopping experience and streamline the whole customer journey. As with any technology, it needs to add value and provide what the consumer wants, while still serving as a driver for improving loyalty, sales and profitability.

Raghav Sibal is the Managing Director, Australia and New Zealand of Manhattan Associates, a technology leader in supply chain and omni-channel commerce, converging front-end sales with back-end supply chains. Learn more at manh.com.au.

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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