CEO Tech Guide

Keeping the Customer Digitized


Keeping the Customer Digitized

At the John Lewis department store in London, would-be fashionistas don’t have to change clothes before trying on new outfits.

Hanah Ebdon, 19, stood in front of a full-length digital mirror situated in the women’s wear department at the flagship John Lewis Partnership Plc store on Oxford Street. She used hand motions to swipe from one brand to the next, seeing how she looked in a blue dress, then a patterned one, projected onto her reflection. “People will see it initially as more of a gimmick,” says Ebdon, whose skinny jeans showed below the dress. Still, she says, “it’s better than online shopping.”

The mirror, installed by Cisco Systems (CSCO) on April 19, uses a 3D camera to capture a person’s shape, show different styles, and help with purchases. It’s part of a push by retailers to provide, in stores, more of what customers get on a website such as Amazon.com (AMZN): wide selection, electronic ordering, and a chance to buy immediately or add items to a cart. “This is really one of the first chances we’ve had to try to bring some of those great features of the Web into an actual physical store,” says Clive Grinyer, director of customer experience at Cisco’s Internet business solutions group. “There’s a real digital revolution in retail that’s just beginning to be understood.”

Companies from PepsiCo (PEP) to Royal Caribbean Cruises (RCL) are adopting tablets, digital signs, touch-screen kiosks, and mobile applications designed to help customers interact with products before buying. They’re attempting to capture the estimated 85 percent of purchases that will be influenced by some kind of digital experience in 2015, up from 40 percent this year, according to Gartner. Adding a digital dimension to buying decisions is already taking hold in transportation (boarding-pass kiosks) and grocery stores (self-check-out options). Now it’s disrupting the clothing, restaurant, and hospitality industries. Of the top 100 retailers, about 40 will record more than $1 billion in sales apiece for purchases through the Internet in 2015, up from 28 in 2011, says Gene Alvarez, an analyst at Gartner. That’s partly a reflection of the growing use of Web-based devices and mobile apps for in-store use, he says.

Consumers may soon have a broader range of gadgets to use while shopping. Kraft Foods (KFT) worked with Intel (INTC) to build a vending machine for grocery stores that gives Jell-O samples only to adults, based on software that analyzes video to determine age. Krispy Kreme Doughnuts (KKD) worked with Kansas City (Mo.) advertising firm Barkley to create a “Hot Light” application that alerts users via smartphone when donuts at a nearby shop are fresh out of the oven.

The Bloomingdale’s store on in New York’s Upper East Side erected several digital screens, one for each of such luxury brands as Fendi and Prada, in storefront windows that let passersby virtually try on designer sunglasses. On some days, small crowds form on the sidewalk in front of each interactive display, though they have led to only a handful of sales of the pricey shades so far, according to sales associate Danielle Link. “It’s like a game—just incredibly catchy,” Jeff Tannenholz says after he attempted to try on a pair of Fendi glasses. Tannenholz is evidence that mature shoppers respond to new technology: He’s a 67-year-old stylist.

At John Lewis, the mirrors are part of a pilot program designed to help Cisco, in San Jose, Calif., determine how to roll out the technology to other prospective clients.

Efforts to make the customer experience more digital are getting a nudge from the spread of smartphones, which let people interact with brands through an array of downloadable applications. AT&T (T) has helped 27,000 business customers deploy mobile applications, and its traffic over Wi-Fi networks almost tripled in 2011 as retailers set up in-store wireless connections, says Chris Hill, vice president of AT&T business and home solutions. “The idea here is that organizations no longer can compete on how well their call center is working or how well their website works,” Gartner’s Alvarez says. “It’s really the sum of all of the touch points and digitizing the experience in a way that enhances it.”

A big challenge is ensuring that the technology meets a genuine need and works seamlessly, Alvarez says. Retailers and carriers are installing near-field communications technology (NFC in industry parlance), which lets customers make payments by tapping a phone against a machine. Still, some NFC projects are facing slow adoption by customers. Of the more than 50,000 people who have downloaded Google (GOOG) Wallet tap-and-pay software, only a small percentage use it, according to Rick Oglesby, an analyst at Boston researcher Aite Group. Part of the problem, he says, is that many phones don’t have the compatible technology installed.

“We’re just getting started, but we’re very excited about the progress we’ve made thus far,” says Nate Tyler, a spokesman at Google.

It’s better to think of a problem first and then solve it, factoring technology in if it helps, says Bill Martin, the chief information officer for Royal Caribbean cruise lines. He used interactive signs, restaurant capacity monitors, and digital information cards in an effort to eliminate lines on a 6,000-person cruise ship.

Hanah Ebdon, who visited the mirrors at John Lewis because they were being discussed at her college, thought the dress looked a bit flat, as if it were on a hanger. She says she’d still want to step into a dressing room to get a better idea of how the clothes look.

“It’s a constant race to keep up with shopper expectations and we’re delighted that some shoppers are already envisioning what’s next,” says John Earnhardt, a spokesman for Cisco. “The virtual imaging technology will continue to evolve, and one of the chapters will be to replicate the shadowing that implies depth and drape.”

For now, the mirror stocks only women’s styles. It may win male converts once it starts featuring men’s clothes, says Don Foley, a 68-year-old photographer who was passing through the store. “It’s in the right direction,” he says. “It could be good for mens suits. You can see, ‘Will stripes work for me?’”

Frier is a reporter for Bloomberg News in San Francisco.

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    (Cisco Systems Inc)
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