Retail Innovation: What 2018 Will Bring


It would be disingenuous to say that the retail industry is status quo. It’s not. There have been massive upheavals lately, brought about by online shopping and the not-too-distant 2008 economic downturn that impacted spending.

Yet, innovation is born form turbulent times (and frequently those that don’t innovate flounder). There are three successful general strategies that retailers are employing:

  • Update the in-store experience. This can be anything from encouraging customer engagement through new technologies to automating shopping experiences and checkout.

  • Retrain and refocus employees. Turning staff from passive to active can help revitalize your guests’ experience and curate their visit, especially as more routine functions become automated.

  • Revitalize the store design. Rethinking the layout of your store can create more opportunities for an store that allows for more direct engagement with products and services.

Let’s take a look at the trends of 2018 and how innovation is bolstering brick and mortar retail.

Predictive Retail

Retailers have been gathering data for years. Now we’re seeing the fruition of those efforts. Innovative brick and mortar establishments are using that data to anticipate their customers’ needs and desires through machine learning, predictive modeling, and artificial intelligence.

Pricing is a major area affected by these technologies. For independent retailers, setting prices has always been driven by the owner’s and manager’s intuition and things that have worked in the past. Often, what happens when products don’t move, it takes far too long to adjust their pricing, and by the time discounts are offered, the product has the taint of obsolescence.


Photo Credit: Geek

Using predictive modeling to monitor inventory, competitor’s pricing, and anticipate demand can lead to real-time pricing decisions and enable you to nudge prices in either direction. While the store down the street is waiting for Memorial Day to drop prices, you will be able to anticipate your customer’s pricing needs to get ahead of the game.

However, another way to avoid products sitting on the shelf too long, is to not have too many products in the first place. Having a fully-stocked inventory has always been a cumbersome but necessary undertaking. Regardless of your best efforts, though, inevitably you wind up with too much of one product and not enough of another.

Predictive analytics can help you recognize trends and areas of demand, so you can stock your shelves in line with your customers’ preferences. This will reduce the number of items you have on hand, thus lowering your costs, and ensure that the items you do order convert into sales.

Grocery store chain Kroger was an early adopter of analytics. One of the projects was to reduce the number of out-of-stock items in its pharmacies. In 2010, the chain successfully implemented the project and was simultaneously able to reduce the number of out-of-stock prescriptions by 1.7 million while saving a total of $120 million in reduced inventory.

Augmented Reality

Once only thought of as the exclusive method for catching Pokémon in the wild, augmented reality has branched into the retail shopping experience. Augmented reality can add layers and images to your digital view, and it also has the potential to work as a filter. This means there may come a time when you select a recipe for dinner, and then walk in a store and immediately know the exact location of each item. And, when you walk down an aisle, you’ll only see the products that fit your recipe.

It’s a future that’s not too far off. Now let’s take a look at how innovative retailers are currently using this technology.

Have you ever been to a hardware store and tried to find something, anything or anyone to help you find the thing you’re looking for? For the average consumer, that can be a Sisyphean task. The home improvement giant Lowes has answered the cries of a thousand lost shoppers by introducing an app that uses augmented reality to guide consumers past wrong turns and misleading displays. The app provides turn-by-turn directions through its stores.

Other retailers are using the tech to allow consumers to “try before they buy” in ways that were not possible before. For example, the Salon Project at Saks Fifth Avenue allows clients to see how a new ‘do would look on them before a single strand of hair is cut. This is accomplished with specialized mirrors equipped with augmented reality programs on iPads. The future also allows for virtual cosmetic makeovers.

On the apparel side, Lacoste and Converse both have apps that allows consumers to virtually try on shoes to see if they – and the friends they share the pics with – like the look. Timberland created a window display that was a virtual dressing room. Potential customers stood outside the window and, using Kinect technology, selected styles to “try on”. It was a pedestrian-stopping demonstration designed to drive more foot traffic into their store.


Photo Credit: Lift

Outdoor gear brand Moosejaw has used augmented reality in a couple of its catalogs. The most recent was for its Sweaty & Wet campaign, where, when viewed through a smart phone, the catalog turned into a super soaker water gun in a friend’s hand which they could use to drench models wearing Moosejaw clothing. The previous year the retailer used augmented reality to remove its clothes from its own catalog. Using a smartphone, the model’s (both male and female) clothing would disappear, and they were left in their underwear. Reactions were mixed, but it was a move designed entirely to generate buzz – and it did, increasing sales by 37 percent.

Rethinking Brick and Mortar

Many stores are competing with online efficiency by turning their physical stores into the exact opposite: a place for customers to come in and chill and relax. It’s this reason that stores are adding coffee shops or juice and wine bars. Urban Outfitters went so far as to acquire a pizza chain and may add the ability to grab a slice in some locations. The idea is to give people a reason to head to the store – other than to simply buy something, which they can do at home. These retailers are making their stores compelling destinations.

For example, Samsung’s New York flagship store barely seems interested in selling anything at all: all products that are for sale are on the second floor shunted against the walls. The main intent is to entertain visitors with music and interactive experiences (that showcase the capabilities of Samsung, naturally).

This is not an attempt to make buying as simple as possible (i.e., competing with the online experience). It is, in fact, entirely the opposite. It’s encouraging the consumer to take a break, slow down, and enjoy as much time as possible in the store.

Or maybe you don’t need bricks and/or mortar at all. Several online-only stores and Etsy artisans are finding that when they want to venture into physical sales, a pop-up shop is the perfect venue.


By their very nature, a pop up can literally be located anywhere, which gives these stores a sense of playfulness and excitement. Pop-ups turn shopping into an event and give retailers a chance to stretch their wings creatively (and maybe move some slower-selling items through discounts and promotions).

Physical retail locations still have the chance to thrive. There are things that online shopping just cannot offer, like the ability to provide a thrilling destination. To discover more insights about recreating retail, find out how Event Architecture can help by giving us a call at 972-323-9433.