App Insights

The IoT and placemaking: turning high street shopping into a true experience

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The next time you walk down your local high street, take a good look at what’s going on around you. Are there empty shops – and how long have they been empty? Has the choice of retailers changed in recent years? And what’s the footfall like compared with before?

According to a report from PwC, the first half of 2016 saw an average of 15 shop closures every single day, with the number of new openings falling to its lowest level in five years. Predictions from the British Retail Consortium suggest that a million retail jobs and thousands of shops could be lost by 2025.

Against this somewhat bleak backdrop, online spending reached a heady £133bn last year. The money is there, but it’s digital retailers now taking the lion’s share. It’s not all bad news, though: retailers can weather the storm and boost footfall by bringing the digital into physical stores via apps and the IoT, giving our high street back its sense of place and adding to the omnichannel brand experience.

Creating an experience

There’s a strong relationship between the IoT and retail placemaking: big data from the former can be used to turn a bricks and mortar store into a truly original shopping experience.

The word ‘experience’ is key here. Kevin Jenkins ,UK and Ireland Managing Director for Visa Europe, describes a shift to an ‘experience economy’. “We increasingly see a trend for consumers to spend more on experiences than on products,” he says. It’s clear that high street stores need to do something different to increase footfall – and thereby sales. The combination of placemaking, technology and the IoT is one potential solution, and it’s already working for some.

Success stories

Let’s talk about nails. Retail consultancy Local Data Company claimed that the number of nail salons in the UK increased by 16.5% between 2008 and 2012. In this increasingly congested market, the question new brands had to ask is: how can a single brand stand out?

WAH Nails has done just that by creating a shopping experience which goes above and beyond what you might expect from a retailer. On the first floor of its Soho store – opened in November 2016 – you’ll find the ‘play and discover’ area, complete with a VR nail designer that allows you to try nail art designs in real time. Designs can be printed or painted directly onto your nails, or customers are told which products they’ll need to buy to recreate the look yourself at home. It’s a fusion of social, digital and retail that even includes a cocktail bar in the basement to add to an innovative, bespoke twist. The important thing is, it’s not jarring or gimmicky; the whole experience aligns perfectly with the brand feel.

Burberry is another brand that fused technology and placemaking to create an exciting new experience, with the launch of its flagship London store in late 2012. Referred to internally as ‘Burberry World Live’, the store fuses the online and offline experiences with the whole layout and architecture defined by the site map of its digital flagship. With a 22ft high screen (plus a number of smaller screens throughout), 500 speakers hidden throughout the store and a hydraulic stage for live music, it stretches the definition of what a retail store is all about.

What’s more, many of the products stocked contain RFID chips, which interact with technology as they’re carried around the store. Approach the changing rooms holding a garment containing one such chip and the mirror before you will change into a screen, showing how the garment would look on the catwalk.

Walk elsewhere in the store holding the same garment, and nearby screens will show short films detailing its history and creation. Launched after a poor trading year, Burberry’s profits rose in 2014 – it’s unclear what effect the Regent Street store had, but shows their dedication to bringing the digital and physical together.

Add to the mix the likes of Charlotte Tilbury’s ‘magic mirror’, Ebay’s emotionally-powered pop-up London store and others, and you’ll see how stores are creating experiences that increase footfall, improve the customer experience and encourage word of mouth.

It’s all about big data

Combining the IoT and placemaking isn’t just about gimmicks, it’s about harnessing the power of connected data. It’s already being done online: customers are being shown recommendations on e-commerce sites based on their browsing and purchase histories, offers are tailored based on a user’s history: essentially, optimised user experiences are tailored to the individual’s specific behaviour.

It’s more than possible to achieve online recommendation on the high street too. Beacons, RFID tags, wearable technology and decent software analytics behind them all can change the future of retail – indeed, a report from Juniper Research claims that retail spend on the IoT is set to hit $2.5bn by 2020.

In the future, we could well see a retail experience based entirely on big data from IoT technology. Currently, if you want to buy a new pair of running shoes, you’ll no doubt spend time researching online, asking friends for recommendations, and finally visiting a specialist shop to try out multiple pairs before deciding which to buy. In the future, however, it could be possible that a next-gen shop will already know enough about you (the type of distance and terrain you run on from GPS trackers, running frequency and distance from your fitness tracker, personal preferences from your purchase history and more) for you to walk in and have your optimal running shoes presented straight away.

With the high street having never been challenged as heavily as today, the blend of technology and story – when done right – can have a tangible impact on customer numbers. Stores that offer something new or something exciting effectively stand out from the generic vanilla goop of most of the high street.

The key? The science of data and connected devices combined with the art of placemaking and storytelling.

Looking to create your own technologically-driven placemaking experience? See how we used augmented reality, RFID tags and haptic technology to create a heritage experience for Historic Royal Palaces.