It’s common knowledge that smartphones are the secret to reaching consumers, but a new Deloitte report reveals why retailers must move from a basic smartphone presence to next-level mobile engagement by innovating with augmented reality, location-based services and virtual reality—as well as investing in cybersecurity to mitigate risks.
The report, “2018 Retail, Wholesale and Distribution Outlook: An Industry in Transition” encourages retailers to evolve along with consumers who are adopting the latest methods of using and engaging with mobile. In fact, the report goes so far as to note that AR could be the “next Internet,” enabling consumers to bring elements of their digital worlds, like their Bitmojis or avatars, into the physical environment to create a new version of reality.
Outdoor gear and apparel retailer REI’s AR apps serve as an example of this, immersing shoppers in a campground environment, linking to products relevant for a camping excursion and leading to a shopping cart.
In addition, the report identifies artificial intelligence as an integral enabler on the consumer’s path to purchase. Some cosmetics brands, for example, allow consumers to test a new lipstick color on an uploaded selfie, giving the shopper greater confidence in the purchase prior to buying.
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As investments in innovations like Internet of Things ramp up, retailers could finally reap the rewards promised by location-based and geofenced promotions and other “in-moment” or in-store opportunities with improved accuracy and impact.
Despite the innovation imperative, cyber risks loom
Adopting “mixed-reality” technologies and environments means retailers must weigh “the potential benefits of new device interfaces for digital content (e.g., augmented and virtual reality platforms and/or voice assistant apps),” the report noted. The risks to cybersecurity are expected to proliferate in relation to the growth of virtual and augmented reality applications in the hands of consumers.
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“In a highly competitive global marketplace, the importance of building positive, long-term consumer trust and managing brand reputation should not be taken for granted,” the report said. “Staying relevant in today’s consumer-driven environment often requires businesses to roll out technology initiatives on tight timelines and budgets—where mitigating cyber risk can become a challenge.”
As the need to improve web safety increases in the face of mushrooming mobile traffic, retailers must reconsider how historical underinvestments in cybersecurity could hamper long-term growth. Though consumers now expect their data to be safe and secure in the hands of retailers, businesses that boost their cybersecurity investments could achieve a competitive advantage against multiplying cyber mischief.
Further, more than one-third of retailers surveyed by Deloitte aren’t confident in their current policies and protocols around cybersecurity. Despite that sentiment, few retailers seem to be actively addressing ways to reduce their risk.
“Consumers must feel confident these digital interactions not only operate flawlessly, but that they do not develop into new gateways for criminal activity,” according to the report.