Reinventing the Physical Space

An online Swedish apparel brand that I have been shopping from for the past couple of years recently opened a store in SoHo, and curious to see WHY they went the offline way, I paid them a visit last week. After spending a good part of my evening there, I understood why!

The store design was clean, hip and minimalist, completely in sync with their brand. Products were arranged by collections, each with a distinct theme and unique set of artistic design elements, with massive digital screens showcasing lookbooks. I realized that I quite enjoyed exploring these products and interacting with the brand IRL, probably more than I did virtually ‘cause I walked out with a lot more than I intended to buy!

And it does seem like a lot of online brands that have managed to either gain a cult following or have built massive online empires are now taking the brick and mortar route. And they are not just selling their products, but are creating a physical space where customers can touch and feel products, and interact with the brand’s facets in innovative, fun ways. Like Casper, an online retailer for mattresses that is now selling something new - Naps! Their concept store The Dreamery offers customers a place to take naps for $25 on their super comfortable mattresses.

Not to be left out, offline-first retailers are also developing some seriously good retail spaces. Nike’s 68,000-square-foot flagship store in NYC does more than showcasing products, with features that are personal and responsive. “But a funny thing happened on the way to the death of retail,” says Heidi O’Neill, Nike Direct president, “it turns out, when you actually talk to consumers, they still want to shop by touching and trying on. They still want to connect, to step into a space and feel something.” Amen!

Winning brands and retailers are actively building upon their performance marketing heritage, investing strongly in real estate and technology to deliver a seamless, integrated customer experience. Blending the digital with the physical to get the results that matter.

They are re-imagining the brick and mortar formats, leveraging modern AI tools. And while they are at it, they capture, measure and analyze each step of the Customer’s journey using this information to strengthen their marketing initiatives, validate product development and formulate business strategy and partnerships.

Let’s look at some of the key aspects that are defining the newly re-invented physical space:

1. Experience is Everything.

A store’s purpose has evolved from merely being transactional, to a place that can provide a transformational experience to its customers. And the experience provided can be Immersive, Interactive or Instagrammable. Stores are leveraging experience as the key differentiator, in some cases, even more than their core product offering.

Luxury brands that once boasted a rather intimidating image, now aim to provide a more engaging experience to its customers. Take the example of Gucci’s Wooster House or Chanel’s flagship store that provides an opportunity for customers to interact with various facets of the brand.

Gucci’s Wooster House goes way beyond gives you a full blown immersive Gucci experience!

Then there are the new players who have taken the concept of Pop-Ups to a whole new level - Showfields at NYC which claims to be the ‘most interesting store in the world’ provides physical space for brands and curates the production, creating a unique experience for each brand, and Area15, the uber cool space that transforms you into an alternative universe of immersive retail experience.

By running AI-powered analytics on customer interactions within their space, spaces like Showfields generate insightful data for their partner brands. This can go a long way in helping brands understand their audience and product appeal.

2. Hyper personalization backed by data.

According to a Salesforce study, 51% of consumers expect that companies will anticipate their needs and make relevant suggestions before they even make contact. With the retail industry becoming highly commoditized, businesses need to think beyond product differentiation and discounts. Personalization, backed by hard data, is the way forward.

Retailers need to develop a sophisticated, integrated data strategy to track the customer journey from start to end. And AI can do exactly that.

By using tools such as Facial recognition, staff can gain insights into a customer’s online as well as offline profile and provide highly personalized service, such as specific product recommendations, or in extreme cases, hand them a cup of their favourite tea on arrival!

This is especially key for luxury brands and stores where customers expect, rather, demand individualized service. The likes of Bergdorf Goodman are known for providing top-notch service, depending rather heavily on staff to build and nurture relationships with their customers. Given that retail has one of the highest attrition rates, Robert Burke, who served as the Senior Vice President of Fashion and Public Relations for Bergdorf Goodman said that AI-powered tools help businesses become less reliant on staff and more so on data to build lasting relationships, by providing consistent service.

3. Enhance store performance using accurate tools.

Many retailers are already using device-based technologies that track visitors, footfalls, etc. However, such analytics tend to rely on the usage of smartphones and the results may not be highly accurate if the customer’s phone is switched off, or if they don't have their Wifi or Bluetooth turned on.

Sensor-based analytics, on the other hand, provide far more accurate information with a higher granularity that can help with the business’s marketing activities, planograms, and operations.

For instance, businesses can identify the exact details of a potential customer considering a purchase transaction but opted to decline. And, if the customer opted out because of long queues at the fitting rooms or billing counters. Research has found that 86% of customers in the U.S. have left a store due to long queues, resulting in an estimated $37.7 billion in lost sales. Computer Vision can help improve customer’s experience at the checkout by ensuring better availability of cashiers during peak times to minimize waiting time.

You can boost in-store revenues by creating targeted in-store promotions.

Additionally, sensor-based analytics can help to cross-sell, and up-sell within a store - Since the customer is already in a ‘shopping mode’, businesses can increase their sales opportunity by providing targeted in-store promotions and offers.

4. Ensure Merchandising is on point.

An AYTM Market Research for Blis showed that 22% of respondents said they spend about 10% to 20% more than they planned to when browsing in-store, while 14.9% said they spend about 20% to 40% more. Product discovery is therefore critical to boosting in-store revenue.

Retailers are always struggling to understand how online touchpoints interplay with in-store behavior. AI lets you bring online data capabilities, in-store. By using in-store analytics, customer browsing data can be gained, mapping their journey as they move across the store - pretty much like tracking customer journey online, as they navigate e-commerce site.

By using Computer Vision, retailers can identify products that attract more attention, product zones with higher dwell times, and products that make it all the way to the till. By generating heatmaps, path maps, and mood-index, stores can develop best practices for merchandising at scale.

Computer Vision gives you an in-depth analysis of hot zones and cold zones based on customer journey.

Additionally, AI-powered tools can help identify different customer demographics and corresponding purchase patterns. Retailers can build effective forecast models based on this information to plan their inventory. H&M does this effectively, always stocking popular products that are on high demand at specific outlets.**

How can RealValue help you?

RealValue is an AI-company bringing digital to the physical world like no other. Our enterprise-level artificial intelligence platform "see"​ images and videos, provide critical insights to provoke discovery, promote engagement, and boost conversions for brick and mortar retailers.

RealValue’s AI tools help you gain measurable and actionable customer insights.

We use computer vision algorithms to identify GAME attributes (Gender/Age/Mood/Ethnicity) and other characteristics (face, hair color, outfit description, attention, etc.) of your visitors and customers with high accuracy from existing camera feeds, images, and videos.

Spot hot zones, understand mood trends, measure event impact, quantify demographic trends, promote in-store engagement using interactive and personalized digital displays, to optimize your operations and increase your conversion rates.

Use heat maps, mood index, interactions and customer path maps based on traffic analysis to test the effectiveness of your merchandising and validate store layout.

To get started on your journey to Cognitive Retail, get in touch with us. Shoot out an email to or Book an appointment for a quick demo.

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