In-Store Tech, Sales Driver or Hype? Newport International Runway Group

Fashion retailers are increasingly integrating slick interactive technology into their physical flagships. But is all this in-store technology actually making the tills ring or merely providing opportunities for short-term PR?

LONDON, United Kingdom — Against the backdrop of a 22-foot screen playing lush campaign and runway videos, impeccably dressed staff members sit with shoppers at Burberry’s high-tech Regent Street store tapping customer profiles onto their iPads. The flagship is arguably the world’s most technically innovative store and the brand’s much-discussed strategy to integrate the digital and physical worlds has set a bar for retailers everywhere.

But Burberry is by no means alone. Slick digital technology — including the use of virtual mirrors, digital screens, RFID chips and iPads — is fast becoming a feature of store environments across the pricing spectrum, from luxury flagships to fast-fashion emporiums. But do these innovations really make customers spend?

Kate Spade is one retailer investing in the space. Earlier this year, the womenswear brand launched interactive displays across ten of its stores, mainly in the US. The technology encourages shoppers to touch and pick up products from a carefully merchandised table, which then displays content, such as campaign videos and Instagrams of women wearing the products. Kate Spade chief marketing officer Mary Renner Beech says the technology, created by New York-based start-up Perch, provides an engaging experience for its customers. She describes the technology as “cost effective,” but like many tight-lipped retailers, declines to disclose figures. “What I can share is that we believe that technology has to have a purpose,” she tells me. “Sometimes that may be financial or brand equity or sometimes both. Technology should always enhance the brand. The aim was to bring Kate Spade products to life rather than being a sales driver. That said, we’ve been incredibly pleased with the reaction. We have seen positive results by giving customers content.”

Karl Lagerfeld’s brand has deployed in-store technology at all of its 15 stores, ranging from iPad minis integrated into display racks and digital guestbooks to fitting rooms equipped with photobooths where shoppers can snap their look, apply “Karl-inspired filters” to their pictures and share them with friends through social media.

When asked whether the investment has led to an uptick in sales, Karl Lagerfeld’s head of communications, Caroline Lebar, replies: “It’s difficult to answer this kind of question. It makes people stay in the store longer. The thing with these tools is as soon as people come into the store and explore the digital elements you’re creating engagement. The guestbook and photobook elements make people feel like they’re part of a club.”

At luxury department store Harrods, six high-definition video walls, developed by Vivid Digital Retail, showcase 15-second campaign slots from designer brands. Harrods media sales director Guy Cheston says the digital screens provide return on investment because like outdoor advertising, brands pay for the space. “We generally aim to pay back the screen investment within 12 months through advertising income,” explains Cheston. “Brands often witness an upturn in retail sales in-store during media campaigns on the screen networks. We also receive regular feedback from brands that footfall increases within their space or concession.”

Shopping malls are also investing in in-store technology with Westfield Group, which has one of the world’s largest shopping centre portfolios, setting up a division — Westfield Labs — dedicated to developing and deploying technology to improve the retail experience. Last November, Westfield Labs partnered with Ebay to launch temporary digital storefronts at its San Francisco mall, allowing shoppers to browse for products and place orders via three 10-foot touchscreens from charitable footwear brand Toms, designer Rebecca Minkoff and Sony. Did the initiative pay off?

Westfield declined to provide sales figures, but Westfield Global’s chief digital officer Kevin McKenzie says “engagement was high,” with customers interacting with the content, but “purchasing products wasn’t their top priority.” So why invest in this space? “By providing a better visitor experience at our Westfield centres, we hope to increase the amount of time and money visitors spend at our locations by making their shopping experience easier, more personalised and engaging,” says McKenzie.

Jonathan Chippindale, chief executive of augmented reality company Holition, which has created “magic mirrors” for London’s Selfridges, Bloomingdale’s in New York and the department store Isetan in Tokyo, says in-store technology should not be regarded as a tool for driving sales, but rather as a way of engaging with the consumer. “It’s about brand building and making the company more contemporary,” he adds.

“The return on investment with these innovations is probably not that high,” says Justin Cooke, founder of digital consultancy Innovate7 and former vice president of public relations at Burberry, “but like everything, it’s about experience. Things like RFID chips make a store feel exclusive… It’s cool and there’s fun to it. It’s about immersive experiences; why shouldn’t there be a rain room like at the [London arts centre] Barbican? People want magical experiences, especially when they’re paying high prices.”

Rachel Arthur, global senior editor of digital media and marketing at trend forecaster WGSN, and a blogger at, says there’s no hard evidence that these costly digital features drive sales. “Essentially at the moment there’s no quantifiable data out there, but it generates press coverage and that drives people in-store.”

H&M’s futuristic-style Times Square store in New York, which opened last November, is equipped with interactive mannequins with screens attached to their foreheads playing videos and a virtual runway encouraging shoppers to strut their stuff down a catwalk and have their performance projected on screens outside the store. It screams “innovation” and “engagement” (and it sparked a lot of press attention) but it also experienced significant teething problems with reports of the fancy technology failing to work. Arthur says that when she first visited the store, the catwalk was not in use and the screens on those cool interactive mannequins displayed error messages. She adds that the store’s staff did not appear to be trained in how to use the technology.

In response to the reported failings, a spokeswoman for H&M says: “It is correct that there were some initial difficulties in the start-up, but these should now be resolved.”

But once the PR dust surrounding the initial launch starts to settle, are shoppers actually using these technologies?

On a rainy and grey Saturday, this reporter paid a visit to Karl Lagerfeld on London’s Regent Street. The store bleeds digital with its iPad minis, digital walls and perhaps the quirkiest digital element of all: the photobooths in the fitting rooms where this writer tested the eight filters and took selfie after selfie in a metallic tweed and faux leather peplum jacket. It’s incredibly addictive. But when asked about customer reactions to the photobooth, a sales assistant says that “many people don’t realise it’s there.”

A few steps down Regent Street at Burberry’s theatre-like store, one of the virtual mirrors isn’t working. A second one on the ground floor is also suffering from a technical glitch. The third time is lucky and as the sales associate waves a product with embedded RFID in front of a mirror in one of the fitting rooms, videos of the item on the runway appear on a screen. It’s certainly pioneering, but when the initial press dies down so does the response from customers, it seems. “Customers used to use them when the store just opened and there was a lot of press about it,” says a sales assistant when asked about customer interaction with the chips. “Now it’s not so much — unless staff are with them.”

Jared Schiffman, founder of Perch, says in-store tech has to be easy to use and should reinforce the shopper’s relationship with the product and brand, not with the technology itself. “It needs to avoid complexity. If the store staff has to explain how to use it, that’s a bad sign.”

But perhaps more functional tools such as the iPads deployed at Burberry, which sales associates use to create and maintain customer profiles with things like product and fit preferences, provide retailers with a better return on investment. Burberry reported in its full-year results to the end of March that orders taken on in-store iPads accounted for over a whopping 25 percent of total digital sales, up from around 15 percent last year. That’s quite an achievement. But for many retailers, these innovations remain an experiment.

Cheston admits that an initiative at Harrods last summer, enabling shoppers to use Near Field Communications (NFC) to unlock information on handbags featured in its windows, failed to entice a large swell of customers. The campaign attracted about 350 taps during two weeks. “It was a kind of interesting experiment,” says Cheston. “It was the first time we tried NFC and the statistics themselves were not overwhelming. It wasn’t pre-marketed; rather, customers just came across it.”

British department store group John Lewis scrapped plans to roll out virtual fashion mirrors, which superimposed outfits over customers’ reflections, after trialling the technology in 2012. “The quality of the virtual mirrors was not quite there,” explains John Vary, innovation manager at John Lewis.

But John Lewis is so serious about driving technology in-store that it’s set up JLab, a technology incubator, designed to help the business drum up new ideas around in-store innovation. “We have an ecosystem of innovation and new start-ups around us, so this is a great opportunity for us to become part it,” says Vary.

“Technology is evolving and it’s great to do this. We are going to have things that are not quite right — it’s about taking challenges and trying to bring things to life. That’s the beauty of innovation.”

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