x Abu Dhabi, UAEFriday 28 July 2017

Online retail: even shopping in malls is turning virtual

Take our shopping survey: David Mattin takes a look at how the phenomenon of online shopping is infiltrating the physical retail experience.

A customer scans a bag of apples with Scan It! Mobile app on his iPhone. The boundaries of online and offline shopping worlds are becoming more and more blurred.
A customer scans a bag of apples with Scan It! Mobile app on his iPhone. The boundaries of online and offline shopping worlds are becoming more and more blurred.

In the age of Amazon.com and when it would be unthinkable for a major high-street brand to go without an online presence, what, exactly, is the purpose of physical stores?

Certainly, consumers don't seem sure. A report this year by the research firm Deloitte concluded that fewer British people are shopping on the high street and that four out of 10 UK high-street stores will close in the next five years.

It's not hard to see why. We have all witnessed, across the past decade, the evolution of the monstrously addictive smartdrug that is online shopping. No queues, no legwork, instant product information and you can even turn to the crowd - via Google - for instant feedback on the dress/book/sofa you're about to buy. Yes, thanks to global connectivity, you can turn to the world and ask: "Do I look fat in this?"

The trouble is, retailers like physical retail spaces. They are giant, real-world adverts for their brand. And once we're inside, we are much easier to manipulate - buy this! Look over here! Come back to our exclusive event! - than we are when we are sitting in front of a computer screen.

That's why now, retailers are investing in a tech revolution that's set to transform the experience of real-world shopping. In short, it's all about taking the advantages that come with online shopping and giving them to us in the real world. And it's happening in some intriguing ways, all over the planet.

A few months ago, the Brazilian fashion retailer C&A made headlines when it launched a new line of coat hangers that tell shoppers how many people have "Liked" the item of clothing in question on Facebook. May saw the Mexican supermarket giant Superama unveil Quick Response, or QR, code-enabled kiosks, enabling shoppers to scan items with their smartphone to buy them and arrange delivery - a concept that's also gaining momentum in the US. Meanwhile, at its store in Nurnberg, Germany, Adidas installed an interactive storefront: a giant screen that allowed shoppers to drag-and-drop clothes onto life-size mannequins to experiment with different looks. All of these things, in their own way, were attempts to bring the experience of online shopping into the offline world.

All this is part of a broader, era-defining shift. That is, the blurring of the boundaries between what is "online" and what is "offline". Just a few years ago, that division was clear; now, thanks to always-on mobile connectivity, it's not. Indeed, a recent survey by the US research firm Forrester found that self-reported time spent online fell this year against last. But that may only be because, increasingly, people don't count activities like checking Facebook on their mobile or using Google Maps as "being online".

The boundaries between the online and offline worlds are blurring fast and we can expect that to continue to change the way we shop. Soon enough, the difference between a real-world and online shop may be hard to define. In fact, that day is already here: check out Peapod, the leading US internet grocer, which has launched 100 virtual grocery stores at rail stations from New York to Chicago. Peapod's physical presence is simply a large billboard, with pictures of food and scannable QR codes enabling commuters to browse and buy on the spot. Is that an online or offline experience? Increasingly, it just doesn't matter.

David Mattin is a senior analyst at trendwatching.com