Are virtual walls the future of retail?


The use of digital technology to enhance high-street shopping took a step forward last month when Ocado and Tesco unveiled initiatives aimed at creating a seamless retail experience.

Ocado opened a pop-up shop in London’s One New Change shopping centre in the Square Mile. It featured a printed window display, or ‘virtual wall’, showcasing some of the retailer’s most-bought items and their barcodes.

Consumers who had downloaded Ocado’s ‘On the Go’ app can visit the window display to order the items – by scanning the barcodes with their smartphone – and book a delivery time. The retailer says it will roll out more displays across the country if the trial is successful.

Jason Gissing, co-founder of Ocado, claims that the experiment is a bold move. “We hope this trial is a hit and, based on its success, we’ll be looking at options around continuing this ‘virtual window shopping’ approach in other locations UK-wide,” he says.

But do consumers want to shop in this way; and will it work in Britain?

An obvious place to look is to the Far East, where mobile technology is more advanced than it is in the UK. Tesco has been experimenting there with an interactive shopping wall for its Homeplus brand, by opening a virtual store in a busy underground railway station in South Korea’s capital, Seoul.

More than 500 products are on offer, and all are displayed in a shelf-like appearance, prompting shoppers to scan them with their smartphones.

A spokeswoman for Tesco says: “You place an order when you go to work in the morning and can have the items delivered when you come home at night. This will help increase our sales via smartphones, which will be the next big sales generator.”

Ocado in the UK, then, seems to be catching on to Far Eastern technologies ahead of its domestic retail rivals. But James Tagg, mobile services director for MPG’s Mobext, is unsure that the technology can be implemented successfully in cities such as London.

“I think it’s clear that, here in London, the main value of a similar campaign would be as an awareness-raising tool, rather than an improvement on our everyday shopping experience,” he says. “The lack of mobile reception on large parts of the Tube system would prevent most people from downloading the app in response to seeing the virtual shopping aisles, and placing an order would have to wait until you were above ground at the end of your journey.”

Tesco says it doesn’t plan to launch similar services in the UK, but with Ocado leading the charge, the ‘big four’ supermarkets of Tesco, Asda, Morrisons and Sainsbury’s could well be tempted to follow suit in the future.

Increasing smartphone adoption will help, along with plans to install mobile broadband on London’s Tube network. It could be a while, however, before interactive walls feature significantly in retailers’ growth plans.

SECOND OPINION – AARON SHIELDS, FITCH

Homeplus has increased Tesco’s online sales by 130 per cent, so it is clearly more than a gimmick. Customers love it, and here’s why:

It’s smart, making use of dead time and using the right technology to get the job done. It gives people what they want – deals and reminders of common grocery items. It is a static poster, not a plasma screen, using QR codes, and it gives customers instant gratification.

It’s playful, challenging people to see if they can make it work and giving them something to talk about when they get home since it is such a whizzy way of shopping.

It’s brand-building, giving Homeplus a ‘leader’ status that being first with cool new technology delivers. Now every other player will look like a follower when they deploy similar virtual shops.

What’s more, Homeplus boosts awareness and preference for the brand as Tesco gets to wallpaper the Korean subway and have people interact with it.

Finally, the project expands the number of Tesco’s purchase points without it having to build new stores – good for business, and the environment. Furthermore, shopping for groceries online leads to shopping online for non-food products. Morrisons in the UK is one retailer placing its bets on this prospect.