The Digital Retail Theater: Shopping's Future - Cognizant
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• Cognizant 20-20 Insights
The Digital Retail Theater:
Shopping’s Future
To thrive in a digital world marked by heightened consumer
expectations for hyper-personalization and instant gratification,
retailers are experimenting with augmented reality, virtual reality,
3-D modeling and other related technologies. Our digital retail theater
(DRT) concept can stoke brand loyalty and create more immersive,
unique and emotionally engaging/rewarding shopping experiences.
Executive Summary revenue of retailers by up to 15% while lowering
the cost of serving customers by as much as
Digital technology advancements have driven
20%.”
“e-shopping” to a new level, enabling consumers
to more effectively interact with brands, search The dichotomy between online and physical
for information, try products, communicate shopping experiences is clear. Physical retailers
with other customers and, perhaps most impor- provide customers instant gratification and
tantly, to buy in real time. The advent of mobile shopping thrills, but restrict them to limited
apps and related technologies has turbocharged product options and expose customers to chaos
e-tail globally. As a result, global e-commerce will and shopping fatigue. While online retailers focus
further increase by 22.7% year over year in 2016, more on the convenience of unlimited product
to $2 trillion.1 choices, they lack the tangible excitement of
hands-on, touch and feel, social shopping and
As the digital world turns, online retailers are
instant gratification.
aggressively moving to increase their overall
market share, while physical retailers try to hold The shortcomings of both physical and online
their ground and stay viable. To achieve these retailing is slowly being addressed by technolo-
objectives, both types of retailers are focused gies such as augmented reality (AR), virtual
on experience-based value delivery for customer reality (VR), 3-D modeling and app-based mobile
engagement and retention. A recent McKinsey shopping. These technologies hold the potential
& Company2 study notes: “Improved customer to enable online and physical retailers to bridge
journeys has the potential not only to increase the gap and merge these two modes of selling
customer satisfaction by 20% but also to lift
cognizant 20-20 insights | july 2016Physical World Retail DRT: A Visual Representation
VIRTUAL PRODUCTS ZONE EXPERIENCE ZONE VIRTUAL SIMULATION OF
RETAIL THEATER
TRY
TRY
Virtual products zone provides infinite Without using trial rooms, Virtual simulation provides a stimulating
product shelf to retailers and convenience customer can conveniently try on and engaging experience of the entire
and variety to customers. multiple products virtually. retail store to customers.
PHYSICAL PRODUCTS ON DISPLAY PROTOTYPING ZONE
Customers can scan the tags of physical merchandise Customers can customize the products
and use the experience zone to virtually try them (shape, size, design, colors, fit, etc.) according
on themselves. to their needs.
Figure 1
into a single, integrated platform. Built upon this DRT conceptualizes a virtually simulated and
technology stack, we have proposed a concept interactive platform, powered by AR, VR and
called the “digital retail theater” (DRT), which we advanced 3-D technologies. It enables online
believe offers the possibility of delivering unique, retailers to replicate the thrills of an in-store
personalized and emotionally engaging shopping experience while augmenting physical retail
experiences to customers of both physical and stores with the convenience of an integrated,
online retailing worlds. in-house virtual platform to drive an enhanced
social shopping experience.
Digital Retail Theater: A Concept
Traditional retail theaters introduced visually Whether sitting at home or in a store, customers
stimulating and interactive shopping experiences can create an avatar (virtual self) using DRT. For
to in-store customers. DRT leapfrogs the tradi- example, the avatar can walk into a virtual retail
tional retail theater by embracing new digital store, personalize products per a customer’s pref-
technologies that are socially engaging and erences, try them on and get live assistance from
deliver more immersive and personally gratifying a salesman. Customers can interact with peers in
shopping experiences that address the needs of their inner social circles to get product recom-
both in-store and online customers. mendations, pricing advice and social confirma-
tion on their purchase decision. In our view, highly
cognizant 20-20 insights 2Online Retail DRT Implementation
VIRTUAL REALITY
Use any of your mobile Enter DRT and Use your avatar to walk into the
devices for entering into DRT. create your avatar. virtual retail shop and browse through the
whole product assortment.
Customer can digitally The selected product
checkout the selected can be shared on social The avatar can browse through the product options
product. network for feedback. from the catalogue and can try them on themselves.
AUGMENTED REALITY
Open DRT (website or app) on the DRT uses the device camera to take Product
catalogue
laptop/handheld device. anthropometric measurement and stores displayed to the customers
it for your shopping. to select the style and color.
Customer can digitally checkout the Customers
can share try-on images to With the use of AR, DRT offers
selected product. their friend circle for social validation a virtual try-on option
and feedback. for the selected products.
Figure 2
gratifying social shopping helps to generate more mental DRT building blocks. A deep dive into the
uniquely fulfilling shopping experiences. available technologies and supporting infrastruc-
ture reveals the proximity of the emerging DRT
Interestingly, DRT is closer than most observers technology stack and its application (see Figures
think. In fact, many retailers are already investing 1, previous page, and 2).
in the emerging technologies that are funda-
cognizant 20-20 insights 3The Digital Retail Theater’s Through interlinking of technologies, DRT
Technology Landscape can be built to enable 3-D avatar models
embedded within an augmented reality
Over the past few years, technologies centered
experience, creating an online platform for
on mobile computing, wearable devices and
in-store shopping. Similarly, with a combina-
supporting infrastructure have experienced
tion of virtual reality and a 3-D avatar, physical
exponential growth (a CAGR of ~36% for smart-
retailers can create an online replica of their
phones for the period 2007 to 20153 and ~31%
stores to offer convenience shopping with a
for wearable devices, from 2013 to 20154, based
wider product catalogue.
on number of units shipped). This has propelled
developments around AR, VR and 3-D avatar As the foundational technologies percolate, some
technologies. Retailers are experimenting with retailers have built stand-alone prototypes that
these technologies by creating either virtual hint at DRT’s near-term promise. For example:
stores or digitizing the trial-room functional-
ity to deliver a better and enhanced shopping • Ted Baker,5 a British luxury clothing retailer, is
experience to their customers. providing a virtual platform for its customers
to use as they move around the store, examine
However, these experiments and developments various product options, consider feedback
tend to occur in silos. By taking a more integrated and add product to their cart. Its virtual store
approach, retailers will be able to provide a also enables customers to share products with
more differentiated and enriching customer friends.
experience. Our DRT concept is premised on
applying these technologies in a way that • A Tommy Hilfiger6 outlet on Fifth Avenue in
delivers an integrated, seamless, interactive and Manhattan offers shoppers “the best seats
socially-connected buying experience. in the house” for the New York Fall Fashion
Show, delivering a 360-degree view for those
As illustrated in Figure 3, the digital technology customers using Samsung GearVR headsets.
landscape already exists to support the building
blocks of the DRT concept. This foundation
• The IKEA7 VR Experience brings the user a
virtual IKEA kitchen in real-world size. Using
provides the horsepower to enable heavy data an HTC Vive headset, consumers can use
processing and imagery. the app to explore and customize kitchens
Digital Retail Theater: Technology Landscape
ONLINE AND PHYSICAL RETAILERS TECHNOLOGY ENABLERS BUYER
Augmented Reality
Virtual Reality
Avatar
3-D Modeling
Mobile Tablet Optical
Smartphone
Computing Devices Computing Projection Systems
Head Mounted Head Mounted Head-Up Virtual Retinal Eye Tap/Laser
and Eye Gears Devices (HMD) Display (HUD) Display (VRD) Eye Tap
Technology
Pillars Tracking Digital Camera MEMS
Accelerometer – Six Degrees of Optical
Gyroscope Freedom (6DOF) Sensors
(Devices and
Algorithms) Gesture Recognition Speech Recognition Sensors Embedded
Input Devices
Systems Systems in Peripheral Device
Image Simultaneous
Augmented Reality
Algorithms Registration Localization
Markup Language
and Mapping (SLAM)
High Speed Broadband
Carrier of Technology 4G/LTE Wi-Max
(VDSL and VHDSL)
Figure 3
cognizant 20-20 insights 4The Attributes of a Digital Retail Theater
Online Retail Theater
Augmented Reality Virtual Reality
• Combines traditional retail • Enhanced replicated walking
experience and e-commerce. into the store experience.
Online and Physical Retailers • Provides better and quicker • Provides a closer real world
product try and buy options. “product,” “services”
and “place” experience in a
Physical Retailers
• Shortened product buying
cycle. digital realm.
• Improves conversion rates • Enables new product and
and reduces returns for new in-store launches.
products.
3-D Avatar Modelling
• Can be integrated with multiple technologies like AR/VR.
• Seamless and integrated shopping: a single Avatar model can be
used across the whole store.
• Provides interactive, assisted and social shopping experience.
Figure 4
according to their preferences. DRT would enable retailers to stand out from
the competition by aligning their unique selling
• Lenskart, an online eyewear retailer, and Ray
propositions (USPs) according to the customer’s
Ban 8, a maker of eyeglasses, are employing
buying preferences. At the same time, it will
AR to allow customers to virtually try multiple
offer and expose customers to new and better
frames and glasses before buying them.
shopping experiences each time they consider
• Using VR, Royal Caribbean 9 is changing buying a product. DRT’s benefits can be broken
the way people cruise. Its technology tour down by retailer and consumer advantages (see
allows customers a view into the world’s Figure 5 next page). Figures 6 (page 7) and
most advanced ship and access to virtually 7 (page 8) offer case illustrations that reveal
every part of the cruise experience. With just how DRT could potentially enhance online and
a few clicks, viewers can travel across the physical world shopping.
zip lines, see acrobats training in the Aqua-
Theater and browse some of ship’s unique Retailer Benefits
dining experiences. • Customer loyalty: A visually stimulating, per-
• Aditya Birla group’s fashion portal abof.com
10 sonalized shopping journey and an enduring
has introduced a new 3-D trial room. It allows customer/brand experience would increase
users to create their 3-D avatars resembling a retailer’s product mindshare and increase
their body type and try on various outfits. brand recallability. This is substantiated by a
Monetate study11 which revealed that “40%
These examples offer solid proof of DRT’s
of consumers buy more from retailers who
potential to deliver value to both customers
personalize the shopping experience across
and retailers. What follows is a deeper dive into
channels.”
the key benefits that make DRT a differentiated
offering. • Customer-driven innovation: DRT simplifies
participation of customers in new product
Benefits of Digital Retail Theater design, prototyping and pilot testing.
Retailers are strategically shifting their focus to Retailers can cost-effectively experiment
continuously improve customer experience to with multiple product and store concepts in
differentiate and gain competitive advantage. a shorter time span. It also further enhances
cognizant 20-20 insights 5DRT at Work
Customer Loyalty
Rationalized
CUSTOMERS Product Selection
Customer
RETAILERS
Driven Innovation
Social Confirmation
and Appreciation
Reduces
Sales Leakages
Gratifying
Shopping Experience
Efficient Distribution
DIGITAL RETAIL THEATER
Figure 5
the existing concept selection process by right product selection and reducing impulse
helping retailers and marketers to track and purchases.
analyze customer kinesis at various touch
points. Along such lines, P&G 12 engages
• Social confirmation and appreciation: Using
DRT, customers can engage and interact
consumers through a digital “virtual wall’ for with people in their trusted circle for product
product testing and prototyping. selection and purchase. It helps customers
• Reducing sales leakage: One of the DRT’s key obtain an instant second opinion and confir-
features is to provide product volume visibility mation on product short-lists. Additionally,
at any of the connected stores. Customers they can also share their try-on images to get
can browse product through a virtual store social appreciation at the time of purchase.
at one location and order a product which is
available at any other store. Retailers don’t
• Immersive shopping experience: DRT
orchestrates personalized and interactive
have to worry about lost sales due to product retail ambience, virtually created aisles and
stock-outs.
3-D product displays for immersive and multi-
• Efficient distribution: DRT would enable sensory shopping experiences. DRT iteratively
optimized supply chain planning, reducing adapts itself to its customer’s buying behavior
dependency on the last mile product distri- and market trends to maintain freshness and
bution challenges. With its ability to allow “wow factor” in their shopping experience.
users to view products beyond the box, DRT
Looking Forward
can boost conversion ratios while minimizing
product returns, resulting in reduced reverse Clearly, the digital economy is shifting the
logistics costs. balance of power from retailer to consumer.
Consumers are easily distracted by the endless
Customer Benefits array of online shopping options and spoiled
• Rationalized product selection: DRT facili- by e-tailing’s seemingly unlimited choices.
tates easy browsing of digital and interactive They expect more engagement and entertain-
product catalogues. Customers can view and ment throughout the entire shopping journey.
try products on themselves with the use of 3-D They are not just seeking products, but want
and AR anthropometric techniques (i.e., the a memorable shopping experience. With the
scientific study of the measurements and pro- decline in in-store customers’ footfalls, and
portions of the human body), thus resulting in
cognizant 20-20 insights 6increased competition among online retail action touch points. This would help them to
players, retailers must reposition their stores provide a hyper-personalized shopping envi-
as destinations that mix product assortment ronment. At the same time, via DRT customers
with entertainment experiences to attract can maximize their return on shopping efforts
customers. As a result, they have to redefine through right product selection. They can
the way they engage with their customers. enhance and add joy to the shopping experience
by engaging with their inner social circle and
DRT empowers retailers to design unique experi- receiving instant appreciation on their purchase
ences for customers by aligning their USPs with decisions. In totality, DRT offers a mutually
customers’ shopping preferences. Retailers can rewarding selling and buying experience to both
better understand their customers’ wants by retailers and customers.
using the data collected at various DRT inter-
DRT in the Physical World: An Illustrative View
Jennifer - A millennial Jennifer decides to visit the same
customer is based brand’s store located in Boston.
out of Boston.
Inside the store, she finds an interactive
She is in search of a particular dress that console that continuously displays
was recently displayed in one of the brand’s different dresses that were worn in the
fashion show event in London. fashion show.
The console helps her identify and select different
apparels that the models were wearing in the live
fashion show.
She creates her own avatar and tries different varieties
of apparel on it.
Console also has a virtual salesperson with whom Jennifer can interact
and decide on apparel that would look good on her.
With the ability to instantly identify the dresses that looks good on her,
Jennifer makes multiple other purchases that would complement her dress.
The console also gives her an option to share her final purchase with
her friends through multiple social media channels.
Jennifer’s ability to instantly buy the items she had in mind, and to see
how she looks in them via the interactive console was a new and
unique experience for her. She orders the items, which will be shipped
to her home from the store.
Figure 6
cognizant 20-20 insights 7DRT at an Online Store: An Illustrative View
Paul receives a product Paul shares the link The link in the message takes
promotion link. with his friends and everybody to a virtual store
receives their feedback located in a virtual mall and
on the product. each one has an Avatar for them.
TRY
The avatar can try on these Each avatar can browse Everyone can customize their
clothes virtually and the virtual mall and avatars and the theme of the
show the user how they interacts with each other virtual mall.
would look on them. (just how they would in
the real world).
To get more information Paul makes the purchase Paul can also share his
on the product, Paul interacts and chooses among multiple purchase on multiple
with a virtual salesperson delivery options: COD, credit, social media and get instant
(through live chat, IM, etc.). online wallet gratification.
Figure 7
cognizant 20-20 insights 8Footnotes
1 Worldwide retail ecommerce sales: Emarketer’s updated estimates and Forecast through 2019,” Dec
2015, http://www.emarketer.com/public_media/docs/eMarketer_eTailWest2016_Worldwide_ECommerce_
Report.pdf.
2 “The three Cs of customer satisfaction: Consistency, consistency, consistency,” March 2014,
http://www.mckinsey.com/insights/consumer_and_retail/the_three_cs_of_customer_satisfaction_consis-
tency_consistency_consistency.
3 “Number of smartphones sold to end users worldwide from 2007 to 2015 (in million units),” Statista, 2016,
http://www.statista.com/statistics/263437/global-smartphone-sales-to-end-users-since-2007/.
4 “Number of wearable devices sold to end users worldwide from 2013 to 2015; forecasted till 2018 (in million
units),” Statista, 2016, http://www.statista.com/statistics/302500/wearable-technology-worldwide-unit-
shipments/.
5 Ted Baker and Moore, 2016, http://virtualstore.tedbaker.com/ted-baker-uk/uk/moore/#scene-
000&h=37&v=-8.7&f=120.
6 “Hands-On With Tommy Hilfiger’s In-Store Virtual Reality Catwalk Experience,” October 2015, http://www.
forbes.com/sites/rachelarthur/2015/10/25/hands-on-with-tommy-hilfigers-in-store-virtual-reality-catwalk-
experience/#37bdcca3128a.
7 “IKEA Launches Pilot Virtual Reality (VR) Kitchen Experience for HTC Vive on Steam,” April 2016,
http://www.ikea.com/us/en/about_ikea/newsitem/040516_Virtual-Reality.
8 “The ultimate augmented reality experience which lets you virtually try-on the latest Ray-Ban styles,”
2016, http://www.ray-ban.com/india/virtual-mirror.
9 “Royal Carribean,” http://www.royalcaribbean.co.uk/google-street-view-cruise-ship/.
10 Aditya Birla’s abof.com launches 3D trial room for online shoppers,” November 2015, http://indianexpress.
com/article/technology/tech-news-technology/aditya-birlas-abof-com-launches-3d-trial-room-for-online-
shoppers/.
11 “The Tipping Point for Personalized Website Experiences,” 2016, http://www.monetate.com/blog/the-tip-
ping-point-for-personalized-website-experiences/.
12 “Inside P&G’s digital revolution,” November 2011, McKinsey, http://www.mckinsey.com/industries/consum-
er-packaged-goods/our-insights/inside-p-and-ampgs-digital-revolution.
References
• “In the World of Customer Experience Management,” July 2015, http://www.firstsource.com/blog/trend-
ing-now-world-customer-experience-management/.
• “Try Clothes On A 3D Avatar Of Yourself,” August 2014, http://techcrunch.com/2014/08/04/fitle-will-let-
you-try-clothes-on-a-3d-avatar-of-yourself/.
• “The Next Thing In Online Shopping? Avatars, Say Qvit.com Founders,” September 2013, http://www.huff-
ingtonpost.com/2013/09/30/avatars-online-shopping_n_3982675.html?ir=India&adsSiteOverride=in.
• “Retail’s new reality: Invisible shopping centers and virtual assistants,” April 2015, http://www.cnbc.
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• “Westfield and Inition use Oculus Rift virtual reality to showcase future of retail,” April 2015, http://www.
ibtimes.co.uk/london-westfield-inition-uses-oculus-rift-virtual-reality-showcase-future-retail-1494812#.
• “3-D Tech Lets Online Shoppers ‘Try on’ Clothes,” May 2013, http://www.entrepreneur.com/article/226091.
• Paul Hemp, “Avatar-Based Marketing,” Harvard Business Review, June 2006, https://hbr.org/2006/06/
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• “Go inside Abbey Road Studios with Google’s virtual tour,” April 2015, http://www.factmag.com/2015/04/15/
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• “Korean retailer Shinsegae creates 3D avatar of you in store,” http://retail-innovation.com/korean-retail-
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cognizant 20-20 insights 9About the Authors
Amit Morya is a Senior Manager within Cognizant Business Consulting’s Communications and
Technology Practice. He is a Certified Project Management Professional and Agile Certified Prac-
titioner, with over 11 years of strong consulting experience in the areas of product and program
management, digital transformation and IT strategy. He holds an MBA from the Indian Institute of
Foreign Trade, Delhi, and a B.Tech from Indian Institute of Technology (BHU), Varanasi. Amit can be
reached at Amit.Morya@cognizant.com | https://www.linkedin.com/in/amit-morya-2463041.
Abhinav Nigam is a Consultant within Cognizant Business Consulting’s Communications and
Technology Practice. He is an Agile Certified Practitioner and has five years of experience in business
process reengineering, IT strategy and management consulting. His functional expertise includes
program management, digital transformation, business process reengineering and business analysis.
He holds an MBA from the Indian Institute of Management, Indore, and a B.Tech in computer science
from Dhirubhai Ambani Institute of ICT. Abhinav can be reached at Abhinav.Nigam@cognizant.com |
https://in.linkedin.com/in/abhinavnigam9 .
Faiz Rehman is a Consultant within Cognizant Business Consulting’s Communications and Technology
Practice. He has eight years of experience in IT strategy, management consulting, business process
engineering, analytics and supply chain planning. He holds an MBA from Narsee Monjee Institute of
Management Studies, Mumbai, and a B.Tech in electronics and communications from Uttar Pradesh
Technical University. Faiz can be reached at Faiz.Rehman@cognizant.com | https://www.linkedin.com/
in/faiz-rehman-0a5243a.
Amit Kumar is a Manager within Cognizant Business Consulting’s Communications and Technology
Practice. He has over nine years of work experience in the areas of business consulting, program
management, product management, business process reengineering and business analytics for
technology and supply chain organizations. He holds an MBA from National Institute of Industrial
Engineering (NITIE), Mumbai, and a bachelor’s degree in electronics and communications engineer-
ing from Birla Institute of Technology, Mesra. Amit can be reached at AmitKumar.K@cognizant.com |
https://in.linkedin.com/in/amit-kumar-2a644114.
About Cognizant Business Consulting
With over 5,500 consultants worldwide, Cognizant Business Consulting offers high-value digital business
and IT consulting services that improve business performance and operational productivity while lowering
operational costs. Clients leverage our deep industry experience, strategy and transformation capabilities
and analytical insights to help improve productivity, drive business transformation and increase share-
holder value across the enterprise. To learn more, please visit www. cognizant.com/consulting or email us
at inquiry@cognizant.com.
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business
process services, dedicated to helping the world’s leading companies build stronger businesses. Head-
quartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technol-
ogy innovation, deep industry and business process expertise, and a global, collaborative workforce that
embodies the future of work. With over 100 development and delivery centers worldwide and approxi-
mately 233,000 employees as of March 31, 2016, Cognizant is a member of the NASDAQ-100, the S&P
500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest
growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
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