Retail is getting a digital heart

Headed by retail brands with a digital heart, different technologies are becoming more and more interwoven and are now practically inseparable from one another. Whether it’s transaction-oriented technology such as cash registers, self-scanners and lost sales kiosks, or experience enhancers such as smart fitting room mirrors, interactive instore applications and digital signage, instore analytics via sensors, cameras and beacons, or process-focused applications like automated inventory management, or even potential disruptors like 3D printing and robotics, the physical retail is going through a rapid and irreversible transition.

Fanatic (online) shoppers value technology the most
Research shows that shoppers who buy products online at least once a week believe that the technologies in retail can make their shopping experience more efficient and pleasant. Active shoppers (both online and physical) see retail technology more as a reason to visit the physical store than people who shop less frequently. So basically, technology won’t exactly help you turn relatively inactive shoppers into active shoppers, but it will definitely help you improve your relevance with shoppers who already love shopping and do so often.

Let’s delve into the technology cluster we believe will be determining the face of retail the most in the coming years:

  1. Frictionless retail
  2. Digital experience
  3. Instore analytics

1. Frictionless retail
Frictionless retail looks from a shopper’s perspective at eliminating all actions (by the consumer) that do not have a positive added value for the customer experience. With the advent of smart connected technologies for inventory management, customer recognition, product tracking and payment, a frictionless customer experience is now actually within reach.

Why would this be relevant? A great example is a visit to the fuel station. Wouldn’t it be great if you could just drive up to the pump, fill up and drive off again, with the amount automatically taken off your account and a receipt directly on your app? No more separate fuel cards, no more need for you to fill in the mileage or your PIN, asking for a written receipt for your bookkeeper, or even having to let the one-day discount pass you by. You get it: frictionless retail is the promise for the future. Amazon is already giving us a taste with Amazon Go and Echo.

The promise is that frictionless retail will eventually no longer require any human action, but that AI will take care of the complete process of product selection, ordering, shipping and payment. For some years already, Amazon has been working on “predictive analysis”, whereby AI – together with IoT devices in the consumer’s home – can estimate which products the consumer needs and, based on this prediction, can

reserve and ship items. Imagine having an espresso machine that keeps precise track of when your Nespresso capsules are starting to run out and can automatically top up your stock level. You never know, the future of shopping might not have anything to do with the way we shop today!

2. Instore digital experience
Instore digital experience is all about enhancing and enriching the shopping experience through guiding, inspiring and interactive applications. Digital signage has been a favourite among retailers for many years, thanks to its ability to tailor content completely to the location, time and even the instore shoppers.
The key question still is, though: what technologies do consumers find most relevant in their decision to visit a particular retailer?

  • Self-scanning checkout. The number 1 with shoppers is the self-scan checkout. The reason is pretty obvious: complete freedom in terms of the shopper journey and no more waiting in line to pay. Convenience clearly does matter.
  • The smart fitting room, equipped with RFID chips for product and customer recognition and an integrated touchscreen in the mirror that provides information on product specifications, but also suggests alternative matching items including the option to ask for a staff member’s opinion. This technology is high on the wish list of Dutch shoppers because it can truly enrich their instore experience.
    Lincherie, a Dutch lingerie and swimwear retailer, launched a mirror like this and integrated a smart biometrics scanner while they were at it, which can measure the visitor’s size and link it with suitable fashion wear.
  • A touchscreen information point inside the store that provides detailed information about the products (features, prices, special offers, availability and whereabouts in the store, as well as inspiration for matching products) adds a great deal of value according to many shoppers. What’s more, based on the research by Capgemini we talked about earlier, shoppers are very interested to be able to use these displays for comparing products in the shop with one another.

Our own prediction is that mobile apps with specific instore features will be the technology that takes the near future by storm. From shopping lists to instore directions and from the ability to use barcodes, QR codes or RFID scans to place products on a wish list or in the shopping cart, to location-based information such as reception information in the fresh produce section and personal offers based on customer recognition. The smartphone itself will be the killer touchpoint in attaining that personal, frictionless shopping experience.

3. Instore analytics: the great divide
There is an insatiable hunger among brands and retailers, which has blown over from online marketing and e-commerce to physical store environments.
Wi-Fi and Bluetooth tracking, beacon technology, RFID, cameras and smart sensors can monitor every move of the customer and, in very advanced cases, can even recognise customer motions. It’s a wealth of valuable information that allows retailers to optimise their formats at store level and maximise shopper conversions at a personal level.

Where relevance has been the focus, this particular area pushes the boundaries. Where is the balance between cool and creepy? Between convenience and service on the one hand and straight-up surveillance and invasion of privacy on the other?

Privacy is already becoming a key term in our society, and this counts for retailers too. Customers want to be more and more ‘in control’ of their own personal information and aren’t willing to share all of their details willy-nilly, without the intent and security first being absolutely clear.
As a retailer, ask yourself which data you really need in order to offer maximum service for your customers and how to securely encrypt this information, especially in light of the increased danger of data breaches. Privacy and security guarantees could very well be a USP in the battle for relevance!

The coming years will be vital for retailers in finding the ideal balance between measuring, monitoring and improving, and giving shoppers the sense that they can enjoy their shopping trip without feeling spied on or constrained in any way.

Make the connection!
One thing is undeniably clear: retail and technology are inextricably linked with each other and will only become more intertwined in the years to come. There’s an interesting fact that research tells us: stores showing an increase in revenue score higher on innovative applications than stores with declining sales. The causal link between the two is somewhat open to interpretation, but the fact remains that winning formulas score well in terms of (customer-focused) store technologies.
The most challenging question for retailers is still: how does technology contribute to making my concept more successfully relevant for today’s consumer?

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