Retail Chinnwag: are virtual stores a fad or a first step towards unmanned stores?

Chinn: pop-up opportunity for seasonal events

Chinn: pop-up opportunity for seasonal events

In his regular column for Retail Times, Simon Chinn, lead consultant at retail research agency, Conlumino, reports on the seasonal opportunity for pop-up stores

Throughout last year, QR codes – those little barcodes of black and white squares that you increasingly see in magazines –became ever more prevalent on the consumer landscape.

These days you can’t miss them as they are ever present in print advertising, on billboards, on POS in stores and even on product packaging itself. While these codes have generally been used to direct consumers to websites enabling them to access promotional content such as a video or additional product information, QR codes are increasingly being used by retailers as a sales tool, directing customers straight to the checkout screen for an online order of the product scanned.

By incorporating QR codes into merchandising displays, store windows and advertising hotspots retailers are significantly increasing the possibility for consumers to shop as and when they want. 

All across the world, QR codes are beginning to crop up in public spaces such as store windows, bus shelters and underground stations, making the concept of a virtual – staff-free and product-free – store increasingly more of a reality.

Tesco’s virtual wall for its HomePlus fascia in a South Korean underground station was one of the first of these types of virtual stores to generate real furore as the video for the concept became popular among retailers and consumers alike.

Soon the virtual wall concept began cropping up at different locations across the world. To highlight a few examples there was Ocado’s virtual wall at the One New Change shopping centre in London and Procter & Gamble in collaboration with Czech pureplay retailer did something similar at tube stations in Prague.

It’s too early to tell whether these virtual shopping walls will prove to be anything more than mere marketing stunts or eventually become permanent virtual shop fronts in popular public spaces. However, the growing number of retailers trialling similar virtual wall concepts indicates many see it as a worthy investment, especially for seasonal events.

With consumers cutting back on discretionary spend last Christmas, retailers increasingly looked for innovative ways to get shoppers to part with their cash when they are out and about.

One area where these pop-up virtual stores will work really well is with helping to drive retailers’ seasonal promotion campaigns.

The relatively low cost of setting up a virtual wall makes it a quick and easy solution to push a seasonal offer, especially if the ‘store’ is set up in high footfall popular locations.

Pop-up stores have always been focused on providing a more customer friendly and interactive shopping experience. The use of QR codes further extends the interactivity aspect of pop-up stores and actively encourages customers to engage with the store environment by physically scanning the code with their mobile device.

Furthermore, the virtual stores help bridge the online and physical worlds of shopping, acting as a multi-channel connecter, thereby facilitating online shopping for people on the go and away from the traditional home computer environment.

The fact a growing number of retailers in the UK and abroad are trialling these virtual store concepts indicates companies do see real value in this new type of pop-up store, especially for promoting seasonal products and complimenting the roll out of click and collect services.

In the US, Sears and Kmart used QR code walls to push their toy offer in the run up to Christmas. Meanwhile in the UK, John Lewis trialled a virtual window at a Waitrose branch in Brighton promoting its ‘Favourite Things for Christmas’ range on a QR window display consisting of most wanted gifts for Christmas including Amazon’s Kindle and Hunter wellies. Customers ordering items from the wall before 7pm could pick up their purchase from the Waitrose store by 2pm the next day.

In addition to providing extra sales opportunities, these types of stores also enable retailers to showcase their offer in places where they wouldn’t normally have a physical presence such as an underground station or a bus stop.

HMV teamed up with 20th Century Fox to launch a campaign to sell DVDs and BluRays through QR codes on posters at bus stops in major cities across the UK. Meanwhile eBay – always at the forefront of new technology developments –opened pop-up stores featuring QR codes in New York, San Francisco and London in the run up to Christmas giving the pureplay retailer a temporary high street presence during this crucial trading period. 

While QR codes are currently the most common tools for virtual stores, ongoing technology developments may make them unnecessary in the future.

Indeed when Net-a-Porter opened its temporary virtual window shop on Bond Street earlier this year it didn’t use QR codes but instead opted for image recognition technology that enabled customers that had downloaded a specially designed app to hold their smart phone cameras in front of products on display, which would then open up in the online shop on the device’s screen.

Amazon has already incorporated this type of product recognition into its app and as the technology improves further retailers could use product recognition and augmented reality aspects in place of QR codes for their virtual store endeavours.

Ultimately the future of the virtual store will depend on how well it is received by consumers. While it is likely to prove a successful concept in countries like South Korea and Japan, where customers are already well accustomed to making purchases on their smart phones and these types of technological developments are embraced by a large proportion of shoppers, a similar level of uptake for such high tech shopping concepts has often lagged or come to nothing in other parts of the world.

Still, with a significant number of retailers having trialled the virtual wall last Christmas, if it proved a hit with customers, we are likely to see it pop up again at the next seasonal opportunity.