Study: The Future Of Retail Is Connected, Mobile, Virtual And Circular

Study: The Future Of Retail Is Connected, Mobile, Virtual And Circular
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A global survey of 20,000 shoppers, including 1,500 Australians, by Foresight Factory in partnership with Snap, has found that ‘connected shopping’ – where consumers combine a digital experience with being in a physical store – is key to driving in-store retail engagement, as shoppers say they want to enjoy the benefits of online shopping, in-store.

The report highlights the unique benefits physical retail provides to Australian shoppers – however, notes that brick-and-mortar retailers must match the convenience and safety of shopping online, in-store. The findings show that despite many of the challenges facing retail both globally and here in Australia, the connected mobile can be a powerful tool in driving people back into shops by giving them a more engaging and efficient ‘connected’ experience.

The report finds that four in ten (40%) of all consumers and half (50%) of Millennials and Gen Z always use their phone while shopping in stores, while more than a quarter (27%) of would specifically visit a store if it had interactive services that allowed them to test and try on items virtually.

Key insights from the report include:

  • Online shopping not the right fit. In the past year, Australian shoppers spent $99.5 million on purchasing clothes online that were returned because they don’t fit. More than 4 in 10 Australian shoppers state that not being able to see, touch and try out products are the most significant factors that put them off online shopping, highlighting the growing appetite for online product testing and try on.
  • Virtual testing the key to e-commerce. The report shows the future of online shopping could be Augmented with Augmented Reality “try on” technology predicted to reduce annual online returns by 31%. Four in ten (40%) Australian consumers expect AR to be available when shopping in the coming year with around one in five preferring to preview furniture, clothes, beauty and luxury items using AR rather than having to go in-store. 
  • Connected shopping reimagined. 2 in 5 Gen Z consumers say they miss the social aspect of shopping in-store, rising to 53% for Snapchatters. There is a continued demand for social shopping experiences. The rise in sharing product images with peers is an example of the type of social shopping retailers can seek to replicate – both between people in-store and between the shopper and their wider networks.
  • Secondhand is first choice. Consumer demand for a more sustainable, circular retail economy is growing. 43% of Millennials and 36% of Gen Z in Australia are worried about the environmental impact of shopping online, and resale platforms provide an alternative channel with lower environmental impact. Over 4 in 10 Australian consumers have already purchased items through a resale platform. Retailers have already entered the resale space with their own branded offerings including Levi’s, H&M group and IKEA. These initiatives see brands taking responsibility for the full life cycle of a product, rather than just how it gets into shopper’s hands and homes in the first place. 

Meabh Quoirin, cofounder and CEO of Foresight Factory, says:

“Consumers are demonstrating a clear desire for the human interaction that comes with in-person shopping, alongside the convenience and engagement of online shopping. ‘Connected shopping’ should be at the heart of brands’ strategies to drive shoppers back into their stores, as our study shows that when brands embrace technologies both in-store and online they could further strengthen and deepen their connections with consumers.” 

Kathryn Carter, General Manager, ANZ, SEA & HK, Snap Inc. says: 

“There’s no doubt it’s been a tumultuous year for Australian retail. As we look to the future, consumers are demanding a mixed retail experience with all the benefits of online and in-store shopping. Retailers who meet consumer demands and offer convenience, social interaction, product proximity and personalised shopping experiences, will continue to see growth, especially with young shoppers.”

The report finds a massive opportunity for online retailers, in particular around innovation, with lockdown measures dramatically accelerating the already booming e-commerce market. 27% of Australians expect to shop more online in the next 12 months compared to pre-pandemic times, while 44% of those who have used AR when shopping online said it encouraged them to buy. 

A key challenge for Australian businesses is keeping stores COVID safe, over half (57%) of Australian consumers would like COVID-19 safety measures in store. Shoppers are still keen to try things on, a key frustration for almost half (45%) of Gen Z consumers during Covid-19 was the inability to try on products in-store before buying them. Shoppers expect to see technology to bridge this gap in expectations, with the study showing that 1 in 3 expect AR to be available in-store in the coming year, so they can try on clothes in-store, while feeling safer. 

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