Keywords

11.1 Introduction

Advanced technologies have seen an increase in physical retail stores in recent years as a means to integrate different sales and marketing channels and deliver a superior shopping experience to customers (Reinartz et al. 2011; Blázquez 2014). As consumers become increasingly connected and empowered through technology, they demand new innovations that have the potential to create more experiential retail spaces which, in turn, satisfy consumers’ hedonic and utilitarian needs (Blázquez 2014). As such, the fashion retail landscape is changing dramatically (KPMG 2018).

Through the quality of interactions and (ideally) long-term relationships established with customers, brands create their competitive advantage (Rayport and Jaworski 2004), which are dependent on factors such as brand experiences, brand satisfaction and brand trust (Horppu et al. 2008; Şahin et al. 2011). Both brand experience and trust can foster an increase in sales and a competitive advantage (Ha and Perks 2005), as both can create customer loyalty, an emotional connection to the brand, which will develop a stronger customer-brand relationship (Ha and Perks 2005; Şahin et al. 2011). This is vital in an increasingly volatile environment, such as the fashion industry, in which premium consumers have various options to choose from. As such, brand loyalty can further be linked to economic sustainability; customers can seemingly make or break a brand.

From a retail perspective, it is challenging for brands to understand customer expectations and provide them with relevant and real-time experiences. Research (Blázquez 2014; Giordano and Zollino 2016; KPMG 2018) highlights that the physical store remains key for customers in terms of their shopping habits, which reiterates the importance of introducing technology into these physical stores in order to deliver a superior experience. As such, successful retailers utilise innovative technology in a way that improves the shopping experience by engaging with dynamically changing customer behaviour (Molenaar 2013). Each stage of the consumer decision-making process provides different touchpoints, which are vital in order to understand what information consumers need and what type of experiences they are expecting (Schmidt 2010). For retailers a major challenge lies in identifying truly transformative technology that can create a superior shopping experience instead of simply providing add-on strategies that may not have an impact on consumers.

This research investigates the role in-store technologies have in fashion retail and analyses the ways in which premium fashion brands can enhance customer-brand relationship through technology adoption.

11.2 Literature Review

11.2.1 In-Store Technology

Fashion retailing has significantly changed due to the introduction of new technologies and cross-channel touchpoints in stores (Pantano and Timmermans 2014), such as digital mirrors, digital signage, augmented reality (AR) (Piotrowicz and Cuthbertson 2013), smart shelves (MailOnline 2017), virtual reality (VR) (Drapers 2017), mobile innovations (Vecchi et al. 2010), mobile applications (Vecchi and Brennan 2009) and Wifi access (Dennis et al. 2012; Pantano and Laria 2012).

The introduction of new technologies in the physical space responds to both retailers’ expectations and consumers’ preferences (Renko and Druzijanic 2014). Meuter et al. (2000) highlight that new technologies can positively influence consumer experience and lead to high levels of satisfaction if technologies save time, are easy to use, are related to a significant need and offer more control over the shopping experience. As such, they can support decision-making linked to utilitarian needs. Yet, it is also vital to focus on hedonic aspects that can be satisfied by the adoption of in-store technologies (Childers et al. 2001; Blazquez and Puelles 2014). The presence of advanced technologies is key in terms of experiential retailing as these technologies can enhance the expected hedonic experience and provide improved services for customers (Rigby 2011; Pantano and Timmermans 2014; Kent et al. 2015, 2017). The various applications of innovative technologies in retailing has proved to be beneficial to both retailers and consumers as they can enrich customers’ behaviour in-store and decision-making process along with enhancing the space for the exchange of information (Kent et al. 2015, 2017). Technologies can act as bonding touchpoints that enhance the customer-retailer relationship (Pantano and Migliarese 2014; Pantano and Timmermans 2014).

Technological innovations can be classified under three key areas: retail-customer management, supply chain management and customer satisfaction (Dunne et al. 2002). This research is focused on retailer-customer interface in-store technologies, which are a part of front-end interactions between retailers and customers and are aimed to enhance the customers’ shopping journey within stores. The most relevant technologies introduced into the premium physical fashion stores can be categorised in Table 11.1.

Table 11.1 In-store technologies in premium fashion retailers (authors’ own)
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11.2.2 Customer-Brand Relationship

Interactive technologies highlighted in Table 11.1 affect the dynamics of retailer-customer relationships, which in turn affects the relational capabilities of a retailer (Comer et al. 1998). Relationship marketing becomes key for retail brands in order to meet customers’ expectations (Şahin et al. 2011) and to make their brand appealing to their target audience (Ailawadi and Keller 2004). Customer-brand relationships are defined as the psychological bond that is formed by the customers with the brand (Fournier 1998). In order to develop a strong bond retailers need to increase brand loyalty through the development of brand trust and brand satisfaction (Şahin et al. 2011).

The concept of satisfaction comes from the judgement that determines if a product or service has provided a pleasurable level of consumption and has met customers’ expectations (Oliver 1997). According to that, this research will look at satisfaction as meeting customers’ expectations through the use of in-store technologies (Bridson et al. 2008) considering that functionality and emotional content improves customers’ relationship with the brand (Liljander and Strandvik 1997; Mosley 2007). Customers’ purchase intentions and repatronage decisions are the result of their holistic experience with a brand, which is considered as cumulative satisfaction (Ha and Perks 2005); as such, brand loyalty cannot exist without brand satisfaction (Hofmeyr and Rice 2000).

Brand satisfaction is further linked to brand trust, which is characterised by customers being able to rely on organisations to keep their promise about a product or service (Delgado-Ballester and Munuera-Alemán 2001; Agustin and Singh 2005; Hess and Story 2006). Customers build trust based on their own assumption and beliefs, as well as experiences that they have with the organisation (Bowden 2009; Şahin et al. 2011). Well-established relationships are based largely on trust, categorised by feelings of personal connection, while satisfaction is a primary indicator of functional connection (Şahin et al. 2011).

Previous research has identified that brand satisfaction and brand trust result in brand loyalty (Şahin et al. 2011). Brand loyalty is defined as a commitment held by the consumer to repeatedly purchase a preferred service or product (Oliver 1997) and is considered to be one the most important factors in a customer-brand relationship (Fullerton 2003). Ha and Perks (2005) establish that brands should provide the certainty that the brand is trustworthy and takes into consideration consumers’ needs, which can lead to a positive relationship. Strong brand loyalty is considered highly valuable to a company, as it can act as an entry barrier for new brands (Delgado-Ballester and Munuera-Alemán 2001).

This research focuses on brand trust and brand satisfaction as dimensions of customer-brand relationships and explores their relative impact on brand loyalty.

11.2.3 Premium Fashion Customers

Customers today have access to a wide range of choices, which exacerbates the need for creating brand loyalty. For premium fashion customers, innovation, differentiation and establishment of long-term relationships have become more relevant (Euromonitor 2017). To explain, 98% of UK customers expect retailers to introduce advanced technologies within their brands by the end of 2018 (Business Insider 2018). Data further indicates that 81% of these premium fashion consumers purchase premium goods %due to better quality compared to cheaper alternatives and that they prefer to buy classic and seasonless pieces (81.6%), thus prioritising quality over quantity and adopting a more sustainable shopping behaviour.

In terms of shopping motivations, premium fashion consumers seem to shop mostly for hedonic reasons (Globaldata 2017). Previous literature has established that the reason for shopping and the way consumers perceive their physical shopping experience has an influence on the satisfaction gained from it (Puccinelli et al. 2009). Customers have a growing interest in experiences and services, and the premium fashion brands with iconic branding, product design, innovation and aspirational store experience are well positioned to exploit this segment and drive revenue outside the traditional retail channels (Globaldata 2017). This is expected to drive interest and build brand loyalty.

11.2.4 Conceptual Framework

This research looks at the intersection of three different areas: in-store innovative technologies, customer-brand relationship and premium fashion customers. The literature suggests that following the constructs of Technology Adoption Model (TAM) and the dimensions of customer-brand relationship, the effect of in-store technology on the customer-brand relationship for fashion premium consumers could be explored following the conceptual framework presented in Fig. 11.1.

Fig. 11.1
A flow diagram represents the conceptual framework of the intersection of two different areas namely the technology adoption model and the customer-brand relationship.

Conceptual framework (authors’ own)

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The TAM has widely been used to analyse the determinants of adoption of new technologies by users. Perceived ease of use and usefulness of technology are the main variables that affect user acceptance of technology and affect behavioural intention (Davis 1989). Perceived usefulness and enjoyment are extrinsic and intrinsic motivations, respectively, that drive the intentions of a customer to use an innovative technology (Davis et al. 1992; Nam et al. 2007). An entertaining and innovative technology should satisfy diversion, escapism, aesthetic enjoyment and emotional release of customers’ needs (Ducoffe 1996). Providing informative, useful and fun content is important to increase perceived value and adoption intention. Also if customer perceptions are positive enough to outweigh the disadvantages, perceived value would increase, and consequently the intention to adopt will be higher (Teng and Lu 2010).

Additionally, customer satisfaction with a specific brand is essential to generate loyalty with that brand (Levine 2003), while trust is a brand characteristic that enhances confidence in customers (Brudvig 2014) and is important to build resilient customer-brand relationships (Fournier 1998), which in turn is positively related to brand loyalty (Lau and Lee 1999).

11.3 Methodology

Following an interpretivist philosophy to explore the role of in-store technology and its impact on customer-brand relationship, this research adopts a sequential multi-method qualitative research design. Both focus groups and in-depth interviews have been used to collect primary data. Focus groups are aimed to assess customers’ perception towards technology in premium fashion stores, while in-depth interviews look into the adoption of in-store technology and its impact on brand relationships. All the questions were based on the conceptual framework proposed and built on previous literature. The data obtained was analysed using thematic analysis technique.

Non-probability sampling strategy was followed to recruit focus group participants. The target sample comprised men and women aged 22–40 years, having relevant experience with premium fashion brands and insights into the factors affecting the present and future of fashion retail. The focus group interviews involved two intensive group discussions with a small sample of four participants each. The discussion guide consisted of 17 questions designed to draw information from personal experiences with in-store technologies and expectations for the future of innovative technologies in fashion retail.

Semi-structured interviews were based on a purposive sample (Kothari 2004) of six customers, aged 23 and 30 years and interviewed to explore and understand customers’ perspectives based on previous theory (Boyce and Neale 2006). The guide included 36 questions divided into three parts: a broad exploration of overall experiences of customers with in-store technologies within premium fashion stores; a discussion about how various factors determine the adoption of technologies by customers; and an understanding of the development of customer-brand relationships through technology use.

11.4 Analysis and Findings

The data obtained from the interviews and focus groups shows evident relationships between the different constructs of the TAM, namely perceived ease of use, perceived usefulness and perceived enjoyment, and customer’s technology adoption and customer-brand relationship dimensions, namely brand satisfaction, brand trust and brand loyalty. Table 11.2 shows the main sub-themes found in the different dimensions analysed.

Table 11.2 Sub-themes linked to different dimensions (authors’ own)
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11.4.1 Perceived Ease of Use

Most of the respondents prefer technologies that are easy to learn and represent a value addition to their shopping journey “I would say mobile payments, magic mirrors, smart fitting rooms and click and collect, those kinds of experience makes my shopping easy and efficient. I am more of a utilitarian person so I want tech to have a purpose and fit in with my journey than visual effect.” (I13). A variety of technologies attract customers, because they have not previously experienced them. Technologies, which are in sync with customers’ life may attract potential buyers and influence their intention to adopt those technologies.

In terms of brand relationship and satisfaction, it seems technologies play a crucial role “it definitely influences my impression of a brand if a brand is embracing tech I automatically think they are embracing the future, they are innovative, motivated and exciting… I think tech would definitely influence my purchase intention and choice of brand as it would affect my relationship with the brand” (I13). However, it all depends on the implementation of technologies, or it could lead to dissatisfaction and disappointment among customers “some tech is hard to understand without any guidance, I would not use it even though I want to try it because if I use it the wrong way, I would feel like an idiot” (I13).

11.4.2 Perceived Usefulness

Respondents usually judge a technology within store based on the advantages and benefits provided; “the main reason for me to use those technologies is that it reduces the time I have to waste in standing at the tills or at the fitting room or to wait for the sales assistant to help me” (I5). However, technology needs to be accurate and perform as expected “it has to be really really accurate and up to mark technology so that when I am seeing myself as an augmented person, it should look good on me and fit properly and be accurate…” (I7).

In some cases, there is a lack of understanding about the usefulness of new technologies “… digital catalogues aren’t much interesting. I don’t think technology influences much of my experience as most of the times I enter a store, I might not even realise technologies in store” (I11). On the other side, a technology will be perceived as highly useful when the customer believes in the existence of a strong and positive user-performance relationship “I went into Rebecca Minkoff, all I know if they sell handbags and I don’t know anything about what makes it a really good handbag. So, it’s the technology that’s showed me the craftsmanship and making process or what makes it different from a Michael Kors handbag, that’s cool” (I4).

11.4.3 Perceived Enjoyment

While some technologies are used for functional purposes, others may be purely used for hedonic purposes looking for a fun experience through the engagement with the technology; “I think shopping is like entertainment. It is nothing else but enjoying yourself. I shop to treat myself or if I am sad, to make myself happy, so it is like entertaining myself. I would not like shopping, if I don’t enjoy it or I can have a pleasurable time” (I1). Customers prefer technologies which are interactive and provide a relaxed shopping journey. They also demand the presence of technology in specific spaces “… we do need technologies in the fitting room as I believe that it is the least utilized space in the store and has a potential to offer consumer a unique experience. Fitting room is the place where most consumers make any purchasing decision” (I5).

Nowadays, social media affects the way customers perceive technology and social networks act as facilitators in the adoption of new technologies. “In today’s time social media is such a big thing and a lot of different blogs are promoting free events here and there, things to do and stuff. I would definitely go and we also went to the topshop VR one” (I10). Perceived enjoyment represents an intrinsic motivation related to the use of new technologies and should complement the functional use of technology, providing a holistic experience.

11.4.4 Brand Satisfaction

The findings show that the in-store technologies that help customers to make more informed decisions have an effect on customers’ satisfaction and stimulate their emotions “I think when it works for you, you probably feel really happy and cool and satisfied, that is more likely to come in and try it again and if you have a good experience with it, you think why don’t all stores use it where I shop at that level” (I4). In-store technologies need to be convenient, effective and meet customers’ expectations as they are the main functional factors to enhance brand satisfaction. They should help customers to feel confident making decisions and indirectly satisfy their needs. “Emotionally I become more confident in my choices” (I2).

11.4.5 Brand Trust

The findings show that security is a major concern for customers nowadays “I don’t like the brand watching you wherever you go, it’s violating my privacy. I am not a very big fan of beacons” (I13). Therefore, if customers experience trust in a brand and with the services provided by them, their perceived risk will be reduced “Although I am still sceptical about the use of high tech applications in the fitting room and it’s not because I do not trust the brand but it’s because if it might get hacked, it will breach my personal security” (I5). Brands need to incorporate technologies that customers can rely on. They need to be sure they are not leaking out their details and intruding on their privacy, but on the other side, brands should use that information to provide exclusive and personalised services to them “Also, the digital screens help me know what’s trending” (I2).

11.4.6 Brand Loyalty

The development of an emotional bond between the brand and their customers created through satisfaction and trust enhances positive customer perception towards the brand. The research findings do not show obvious evidence that in-store technologies impact brand loyalty, but it does further help in creating brand preference and repeated purchases (Jacoby and Kyner 1973) “I think any type of service or experience would affect my purchase decision and relationship with the brand” (I1).

For some customers, in-store technologies communicating brand values and brand history may stimulate brand preference through engagement, as it does leave a good impression in their minds. Technologies should be compatible to what the brand stands for and should not completely remove the human touch within stores. The use of technology contributes to facilitate a purchase or to develop preference towards certain products. “I really depend on which brand and how is the match of technology with the brand. If it is really like a traditional brand then maybe you are expecting more one to one service than technology, whereby for premium brands, its ok because there would be people helping you but also you would be exploring something entertaining and functional in your purchase journey” (I6).

11.5 Discussion, Implications and Conclusion

In-store innovation has become an obvious retail phenomenon as retailers are adopting cutting edge technological advancements into their stores (Kristinnsson 2014; Grewal et al., 2017). Technological advancements, such as VR headsets, AR, digital signage, smart shelves, beacon technologies, self-service technologies, window shops, magic/smart mirrors, digital fitting rooms or interactive store windows are working towards the purpose of improving channel performance and customer-brand relationships (Thamm et al. 2016). Results from this research provide evidence for both. In terms of channel performance, respondents support the fact that the introduction of technologies helps them to make better decisions and improves the perceived performance of the physical store while at the same time has an effect on brand satisfaction.

Literature supports that the introduction of in-store technologies has a positive effect on enhancing the in-store involvement of customers. However, most of the interviewees mentioned that the technologies they have encountered do not work properly or are not very accurate with the exception of the ones implemented for pure hedonic purposes. Many customers did not notice technologies or found them obstructive or located in unsuitable locations. Contrary to Kim et al. (2017), who found that perceived enjoyment is considered more important than perceived usefulness to develop a positive attitude among customers to use technology, premium fashion customers seem to prioritise utilitarian aspects as they consider enjoyment as a secondary factor over functionality. But it is important to note that both aspects, functional and emotional, improve customers’ relationship with the brand (Mosley 2007). Results show that the interaction with technologies enhances the emotional relationship with the brand and makes customers feel more satisfied about the service received.

Among premium brands, trust is a very important factor (Euromonitor 2017). However, many respondents were not able to trust brands as they do not want them to interfere in their privacy. In terms of the different dimensions of trust developed by Clark et al. (2010), respondents expect technologies to be accurate and provide a superior experience which fits with the competence dimension. They also rely on the suggestions provided by technology, which enhances the integrity associated with the brand. Last, benevolence relates to a brand’s willingness to help customers, which should improve through the implementation of technologies and in turn contribute to help customers and retailers to construct their own competitive differentiation. The customers’ trust towards the brands can provide the basis to transform a cognitive connection to a more emotional connection between brands and customers, hence enhancing the attachment (Hess and Story 2006).

Regarding brand satisfaction, according to the results, the perceived performance of technology affects the satisfaction felt by customers (Anderson and Sullivan 1993). Brand satisfaction contributes to developing a positive perception towards the brand which along with brand experience and trust produces brand loyalty (Şahin et al. 2011). Previous research found that attitudinal and behavioural loyalty has an influence on repatronage intention as well (Morgan and Hunt 1994; Anderson and Mittal 2000).

The specific characteristics of premium fashion brands make some technologies specially relevant in the physical space. In terms of brand positioning premium brands needs to communicate their heritage and what the brand stands for. Hence, in-store technologies can be used effectively as a platform to provide information about brand heritage, craftsmanship and values, differentiating themselves from the other brands. On the other side, technology should not be implemented to keep up with the competition, if it cannot be applied properly. The result of a faulty technology or a not relevant one will affect trust and satisfaction (Anderson and Sullivan 1993), which in turns affect brand loyalty. Technology should be used to optimise customers’ experience and retailers need to find the right balance between technology and personal interaction with sales assistants. Findings show that in-store technology lead to repeated purchases which might lead to behavioural loyalty as a result of the satisfaction gained through the service and trust on the technology implemented by the brands (Kumar and Reinartz 2006).

Customers develop purchase intentions and repatronage decisions based on their holistic experience as a result of cumulative satisfaction (Ha and Perks 2005). However, current usage of advanced in-store technologies do not completely satisfy customer expectations (Pantano and Viassone 2014) as retailers find it difficult to understand what customers expect in order to develop proper services to fit these expectations. Interviewees provided suggestions regarding their ideal in-store technological experience and how the retailers can improve already existing technologies within premium fashion stores to maximise their relationship with customers. Based on their perceptions, in-store technologies should eliminate all friction points in the purchase journey and be innovative and engaging at the same time. Technologies should be implemented within all the stores of the brands as customers would expect a similar experience in different locations. A positive encounter with the technology would influence customers’ purchase behaviour and relationship with the brand if they get the service they were expecting. They suggest to combine the concept of third place with technology within premium fashion stores to increase the time customers spend in stores and provide a superior experience, thus improving the relationship. Also, they consider technology as key to increase brands’ customer base as it would be a way to engage younger customers and would position the brand as more creative and innovative. Regarding the use of specific technologies, respondents suggest the following (Table 11.3):

Table 11.3 In-store technologies in premium fashion retailers (authors’ own)
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11.6 Implications for Theory and Practice

Previous research has observed customers’ attitudinal and behavioural responses towards in-store technologies in general settings, while this research is focused on fashion-oriented in-store technologies within premium fashion context. Also, the role of in-store technologies to enhance a multi-sensory consumer experience has been already addressed, but not in relation to its impact on customer-brand relationship in a premium fashion retail context. This research has applied the TAM in a new context, customer-brand relationship. In terms of methodology, previous research related to technology and customer-brand relationships is either mixed methods or quantitative, whereas this research is built on qualitative research techniques.

This study provides practical recommendations for retailers from the viewpoint of the customers; it helps retailers to understand the impact of technology in customers’ relationship with the brands. It contributes to the literature on customer-brand relationship and extends the in-store technology literature, which is a relatively new field of academic research. Also it provides broad understanding of advanced in-store technology and its current implementation by premium fashion retailers and prospects for future incorporation (Ki and Kim 2016). Through this study, in-store technology has been defined as an effective relationship-marketing tool to enhance brand satisfaction and brand trust and as a facilitator of brand loyalty.

11.6.1 Limitations and Areas for Further Research

This study contributes to an emerging field of study but has some limitations, which will need to be addressed in future research. Further retail formats and retail contexts such as fast-fashion or luxury fashion could be considered in order to offer a more complete consumer perspective. Also, looking at the role of demographic variables would expand research and provide relevant insights for industry.

This research has been conducted over a cross-sectional time horizon, which does not completely explore the dynamics of customer-brand relationship. Therefore a longitudinal study could be developed in order to consider the complexity, dynamics and causality effects.