Since the pandemic, in-store technology has gone from nice-to-have to necessary.

What was once simply a way for retailers to refresh their storefronts has increasingly become a prerequisite. Consumers returning to stores in droves after the pandemic now expect to find the conveniences of e-commerce — such as the ability to easily find discounts or order from a brand’s full catalogue — in the brick-and-mortar experience.

But the rising costs of doing business — and unquelled recession fears — have made most brands and retailers reevaluate the kind of in-store tech they will introduce.

Before Covid, the brands investing in in-store technology primarily focussed on features meant to excite customers and encourage repeat visits. In 2013, Kate Spade created interactive display windows at its Saturday stores that let people buy goods on a touch screen. In 2014, Rebecca Minkoff introduced ‘magic’ mirrors in dressing rooms with screens that allowed shoppers to request additional items. Farfetch unveiled its “store of the future” retail concept in 2017, replete with its own version of digital mirrors.

Now, experts say companies are more apt to implement tools that solve infrastructural problems, like radio-frequency identification or RFID, which helps with inventory management and can be used for self-checkout, has gained traction.

For technology to be most effective in physical retail, it needs to help brands connect with customers, improve back-of-house management and enhance store visits, said Phillippe Lanier, principal at commercial real estate developer EastBanc and chief executive of software firm EastBanc Technologies.

The in-store tech “needs to be constructed or architected in some form where these three different needs can work well with each other,” Lanier added.

Identifying a Purpose

To find the right in-store tech, some retailers are thinking beyond creating “selfie moments everywhere,” said Frannie Shellman, head of marketing at multi-brand retailer Showfields.

Instead, they should focus on introducing specific elements that embed innovation in the in-store experience, help improve operations and underscore the brand’s DNA. Doing so can improve the likelihood that shoppers will engage with the technology, which allows companies to justify the costs of those features and make further enhancements down the line.

Showfields’ mission, for example, is to help consumers discover small or emerging businesses. In 2020, the retailer introduced Magic Wand, an app that users can download after scanning a QR code located in a brand’s in-store display to get more information on the label. Last November, Showfields increased its utility by adding discount codes to the app to be applied when shoppers checkout in-store, the same way they would online. The change incentivised consumers to buy goods as well as provided the brands Showfields carries with more data on who is shopping with them in-store.

“We’re always looking for things that are going to bring value to the brands and sets us apart from other platforms that they can work with for short term retail activations,” Shellman said.

Now that more consumers are accustomed to shopping online with endless options and fast checkout times, retailers should seek out technology that makes users’ lives easier.

“There’s still a lot of friction that exists when you’re shopping in a store that could be solved for,” said Jackie Trebilcock, managing director at New York Fashion Tech Lab, which connects brands with retail technology start-ups. “If I’m making a trek to the store, I want it to be efficient.”

Reformation recognised early on that it could digitise a key part of in-store selling: try-ons. In 2017, the eco-friendly apparel brand introduced touchscreen monitors that let shoppers request items without having to rummage through racks. It also unleashed its “magic wardrobe” concept, which allows customers to select additional sizes and styles on touchscreen monitors in every dressing room. Where such features may have been a one-off experiment for some brands, Reformation made these features a core part of its store experience by making them available in 28 of its 39 stores. They will be included in future openings.

Managing Expectations

In this economic climate, retailers are extra diligent with the investments they make. With technology, though, there are few truly safe bets: RFID, for example, often appears as a low-stakes expense because it helps fix inventory, but can be hard to implement because it needs to be integrated with a retailer’s existing systems. Companies that choose to spend on more cutting-edge solutions are taking even more of a gamble on what will resonate. To hedge their bets, many develop solutions they can change or update as needed.

Farfetch, for one, spends millions of dollars annually developing its own technology, including retail software capabilities, which it sells to other brands like Thom Browne and Harrods. Farfetch’s brick-and-mortar subsidiary Browns has seen an uptick in conversion from tools like its interactive mirrors, which show clients additional items (some of which are only available online, engaging consumers with e-commerce, too) and how those goods can be styled.

Still, the luxury marketplace has adjusted its expectations for what some of its other features can achieve.

At one point, the company introduced connected tags — sensors that go on specific items in the store — in Browns’ flagship store. Farfetch originally intended to track shoppers’ interactions in the stores, with the tags linking to customer profiles that sales associates could use to recommend products during future visits. The company found that the tool was better used to improve the overall product offering and how goods are merchandised in the store, said Sandrine Deveaux, executive vice president of innovation at Farfetch. (Browns is currently not using connected tags in its flagship boutique.)

“In terms of customer experience, more work has to be done,” Deveaux said. “We don’t always get it right the first time. That’s the point of technology, isn’t it?”