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Digital technologies killed physical retail – now they’re resurrecting the high street

October 13, 2021

Digital technologies killed physical retail – now they’re resurrecting the high street

The rise of online retail over the past decade has been seen as a death knell for physical storefronts. Now those same technologies could prove to be the high street’s saviour.

The rise of online retail over the past decade has been seen as a death knell for physical storefronts. Now those same technologies could prove to be the high street’s saviour.

The rapid surge in online shopping’s popularity was already wearing down physical retail’s profitability long before the COVID-19 pandemic forced shopkeepers to close their doors to customers.

Department stores like Myer, David Jones and Target were forced to scale back their operations as customers opted for more personalised online experiences in lieu of the larger and increasingly irrelevant ‘one-stop-shop’ retailers.

Meanwhile, longstanding Australian businesses like Roger David shuttered permanently, faced with rising fixed costs, falling sales and increasing competition from digital rivals.

But new hope has emerged for struggling storefronts – artificial intelligence. Using computer vision, machine learning and other data-heavy services, retailers can get a better sense of what their customers are looking for and how best to meet those needs in physical space.

Even digital retail behemoth Amazon has thundered into the physical world with its checkoutless grocery stores and ‘highly curated’ Amazon 4-Star shops – which are both underpinned by shopper data and machine learning.

Services like those offered by Australian company meldCX even enable retailers to measure the way customers use their physical shops in the same way they would track interaction with a website.

Stephen Borg, meldCX group CEO, noted that computer vision has now reached a point where retailers can monitor the way a customer’s journey in-store including, how they engage with products, number of times they interact with a product, to their likely sentiment towards the product and whether its location affected their purchase decision.

“For example, we work with a client to determine within their retail spaces and benches how many people engage with a Samsung Galaxy versus an iPhone 12,” he said.

“It’s interesting because that customer got to the point where they wanted to go back to vendors and charge per engagement like they charge per clicks.

“All that detail trickles up and comes to light, you can compare it across multiple stores and you can also cross-match it with all the other data versus how much traffic there is and how much engagement you’re getting at a product and brand level. It helps organisations craft better business decisions based on data driven insights.

The impact AI will have on the industry is so great it’s being hailed as one of the biggest trends to shape the future of retail, with commentators warning customers will expect increasingly sophisticated services from the shops they visit.

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Any advice provided by Reach Markets including on its website and by its representatives is general advice only and does not consider your objectives, financial situation or needs, and you should consider whether it is appropriate for you. This might mean that you need to seek personal advice from a representative authorised to provide personal advice. If you are thinking about acquiring a financial product, you should consider our Financial Services Guide (FSG) including the Privacy Statement and any relevant Product Disclosure Statement or Prospectus (if one is available) to understand the features, risks and returns associated with the investment.

Please click here to read our full warning.

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