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GUEST COMMENT All is not lost for the high street as technology takes front foot for retailers

At first glance

The UK’s high streets witnessed 5,855 store closures in the last year, more than in any other year since 2010.

The last couple of years has seen a steady stream of news stories highlighting the death of the high-street, as increasing numbers of established retailers disappear from town centres, outcompeted by online rivals, or simply migrating online themselves. Most recently, household names including House of Fraser, Toys R Us, Mothercare and M&S have announced plans to shut hundreds of stores across the UK. At first glance, the future of the high street is bleak – empty streets are long forgotten in favour of busy websites.

But hope may not be lost for retailers. In a recent comment, M&S chief executive Steve Rowe said the company needs to provide a “better experience” for customers in order to reverse its downturn in profits. Some bricks-and-mortar retailers are already following this strategy by providing a more frictionless shopping experience for their customers.

A recent survey conducted by Which? highlights what customers look for in a tangible shopping experience. The survey ranked WH Smith as the worst retailer while cosmetics chain Lush, discounter Savers, and toy chain Smyths Toys came out on top in the survey. Customers based their responses on the layout of the store, staff friendliness and pricing. The survey also found that customers valued being able to touch, feel and try on items before purchasing them as well as being able to ask staff questions.

Retail convergence – the marriage of digital and physical– is fast growing as a game changing trend. Ted Baker has been piloting an in-store payment solution whereby customers in the shop order unavailable stock to be delivered to their home or work, or via click-and-collect. Customers can now enjoy the physical, immersive experiencing of a real store but if their size is out of stock or they don’t want to queue for the check-out or carry a large order home, they can enjoy the ease of delivery from an online platform. Out of town retailer Angling Direct also saw revenues jump 44 per cent in the last year owing to ‘modern stores and stocking that accurately reflects the customers needs’.

In order to meet this consumer desire whilst maintaining a high-tech approach, Amazon is investing in face recognition and motion sensors within their new stores, using the same technology as self-driving cars. This includes Laser Illuminating Detection and Ranging devices, which use laser beams to decipher changes in movement and surroundings. They are also using high powered cameras which, much like the human eye, provide overlapping images and can detect the depth of the field, peripheral movement and the dimensions of objects. This technology-driven approach tracks the movement of objects as they are picked up, automatically registering them onto the customers’ device, to be charged to their Amazon account as they exit the store – taking frictionless shopping to a new level.

A softer touch and more cost-effective approach to enhancing the in-store experience may also be possible, driven by data. The use of Radio Frequency Identification (RFID) tags enables retailers to collect a constant stream of data. Data from RFID tags can be used for both real-time and historical reporting, allowing retailers to track which products have been picked up and moved around most. These products can then be classified as high in demand and placed in the store accordingly.
IoT sensors have been used in stockrooms for a while now, to maintain dry stock levels. But recently enterprising businesses have been moving sensors to the shop floor itself, using them to monitor stock freshness in fridges and keep track of how shop spaces are used. Internet of Things (IoT) technology can also support offline sales by combining the physical shopping experience with the advantages of online shopping.

Once retailers can locate shoppers next to specific products, customer traffic within the shop can be anonymously tracked, just as on a website. With today’s ease of internet access many customers compare in-shop prices to deals they find online, which is a threat to physical shops that cannot adjust their prices as quickly. But by tapping into the aforementioned technology, shops can compete more directly with the online platform: once a customer is located near a particular product, or visiting an online site for a similar product through the store’s WiFi, retailers can develop targeted, individualised offers and product information to send to their mobile device as well as allow for real-time price adjustment.

Another useful development is the Virtual Bluetooth Low Energy (vBLE) beacon. For many years WiFi networks have been used to triangulate the position of people using the network – a good example of this being the blue dot on Google Maps. Companies are now able to install vBLE beacon, which can pinpoint a wireless device to a much more specific location. In large, complex warehouse shops such as Ikea, innovators can use this to help customers find their way around to different products, and floor staff can find customers potentially in need of assistance.

The trend of online retailers moving into physical stores highlights that the best retail model is one which combines innovative aspects of both bricks-and-mortar and E-commerce. Retailers can take well-defined and targeted steps to achieve the best of both worlds, and ultimately improve both customer satisfaction and revenue.

However, before integrating technology within the system, retailers should review the objectives behind doing so and the return on investment they wish to achieve. Not fully understanding the business outcome or the critical underlying infrastructure can lead to a fragmented solution that may not be secure, sustainable or scalable. Keeping this in mind, if retailers adopt the right tricks of the trade, the downward trajectory of the high street can be turned on its head.


Author: Matt Sebek, vice president of digital at World Wide Technology

Image credit: Fotolia

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