Digital Commerce: In and Out of the Dressing Room

The Web didn’t disintermediate retailers the way it was predicted before the dot-com bust. Still, there’s no denying it changed aspects of the retail business forever. The PC was previously this revolution’s central hub. Now, of course, the Web shows up on all manner of connected digital devices, from mobile phones and kiosks to refrigerators, cars, and even fitting room mirrors. Convergence has blurred all kinds of lines already, and now it’s starting to distort the lines between the digital and the physical worlds. Like never before, e-commerce stands poised to invade the real world.

Consumers have wanted seamless integration between a retailer’s online presence and its brick-and-mortar stores for years. Increasingly, though, there’s a generation of shoppers who expect and demand it. They’ve grown up with the Web and don’t draw the same lines their parents do around different types of storefronts. These shoppers slip in and out of other digital experiences without a second thought, watching TV while checking e-mail, making comments on a friend’s MySpace profile, and carrying on conversations over IM with three different people. They expect the same grace from retailers when it comes to enabling transitions from online shopping to real-world shopping.

Technology companies have been working on this sort of retail convergence for years, and I expect it to be the hot area for venture capitalists this year, much like mobile was last year.

Let’s look at two related trends.

The Mobile Phone as Shopping Utility Device

Mobile commerce may not have taken off yet, but the mobile phone is increasingly becoming a shopping tool. The Web provides an incredible wealth of product detail, ranging from official specs to ritualistic unboxing photos of newly released gadgets to price comparison and consumer and editorial reviews. Consumers typically research these kinds of details online before going to the physical store, especially for high-ticket items. But this is an imperfect system. Without fail, no matter how much research I do in advance or how much stuff I print to take to the store, another question arises, resulting in lots of back and forth.

But what if I could stand in the store and key the UPC numbers into my phone to get price comparisons from across the Web? Frucall gets it done. What if I’m trying to select a movie to either rent or buy? Wouldn’t it be great to access editorial ratings and see consumer reviews? Check out the mobile movie explorer at SnapTell.

Right now, these third-party companies provide a free service. But smart retailers will solve consumer needs with similar mobile utility applications that make sense for their particular vertical.

Consumer packaged goods (CPGs) can’t hide from this trend, either. Take a look at Modiv Media, a start-up aimed at putting a souped-up PDA/barcode scanner in the hands of grocery shoppers. The device scans items as you put them in your cart and offers corresponding deals and coupons.

Fitting Rooms Go All “Minority Report”

Many e-commerce companies have experimented with virtual changing rooms in the online world. Clothing retailer Lands’ End launched a fully customizable avatar years ago that allows shoppers to create a personalized representation of themselves, then view how clothes would fit. It was a leap forward but, in the end, still a digital representation of both the clothes and the person.

Now companies like Nordstrom are turning that idea around by tricking out mirrors in brick-and-mortar stores with digital interfaces that can superimpose images of clothes on your body, allowing shoppers to quickly “try on” a variety of items without having to strip down. I’ve seen a few different takes on this idea, each with slightly different interface choices. Clothes might be pulled up through embedded radio-frequency ID tags or via a touch-screen interface. Or, tapping in to a key trend from this year’s CES, why not enable menu browsing via simple gesture control, much like what the Nintendo Wii has brought to video games?

These are just two examples. Technology is flowing like molten lava in two directions: Advances in graphical capabilities are bringing frightening realism to digital representations of people and objects. And digital technology is bringing all the Web’s hyperconnected power to the real world. The result is a rapid meltdown of the line separating the digital and real worlds. Retailers have a tremendous opportunity to leverage these immersive platforms to create new brand experiences and deliver value and efficiency to their customers. Sounds like the foundation of a long, loyal relationship to me.