The news is inundated with headlines declaring High Street closures and stories of the retail sector’s decline. Over the last few years, we’ve seen many household names - including Toys R Us, Maplin and Pound world - all vanish from the High Street, while Debenhams and Laura Ashley have more recently called in administrators in light of the impact of the ongoing global pandemic. The result of these closures resonates across all areas, with retail job-losses in their tens of thousands within the first month of 2020, according to the Centre of Retail Research (CRR).
With factors such as changing consumer buying habits as well as falling footfall, retailers need to consider moving away from the traditional retail experience and create a buying experience that fits with changing customer ideals. And, as we begin to operate in a new reality due to Covid-19, it’s clearly highlighted that retailers more than ever have to offer a cross-channel experience and have the ability to react quickly and pivot their offering to ensure business continuity.
Online vs physical
A key reason behind falling footfall is attributed to the rise in online shopping – the IMRG Capgemini Online Retail Index found that online sales have grown by 9.4% year-on-year. As ecommerce giant Amazon continues to dominate our online shopping habits where its UK annual sales have increased to £13.4bn, physical stores continue to jostle for relevance and consumers’ attention.
However, stores don’t have to compete against the online space to get ahead – in fact, an efficient and engaging online experience can be replicated, if not bettered in-store, through data, analytics and, importantly, automation.
Typically, when we think of automation in stores we think of increased efficiency – however, implementing this technology also focuses on improving the customer experience. By engaging customers and mirroring the positives of the online shopping experience, limiting queuing time and offering personal recommendations, stores can entice customers to visit their physical stores, bringing more people back to the high streets.
Today, customers are feeling burdened in an age of limitless choice and now expect retailers to help simplify and improve their shopping missions. New channels and digital touchpoints are emerging, bringing the store to customers and enabling access whenever and wherever they want. And The role of retail spaces, whether physical or virtual, needs to change in a world where it isn’t only retailers who are retailing.
Capgemini research ‘Smart Stores: Rebooting the Retail Store Through In-Store Automation’ reveals that customers are in favor of automation which allows them to pay more quickly. Self-service checkouts are an example of successfully adopted automation. For example, Waitrose has managed to automate, so that 40% of all in-store-transactions occur this way. Capgemini’s research shows the upsides of using automation results in an 11% increase in customer visits, leading to an uptake of 11% more sales.
This technology spans across the customer’s online experience, and includes self-identification with product suggestion, assisting customers with product information such as Zara’s use of augmented reality using models wearing items, AI integrated mirrors and self-checkout. Retailers who have utilised this technology have seen that nearly half (46%) of consumers are willing to shift their online purchases from an entirely online retailer to one with physical stores which uses automated technology.
The ‘smart store’ uses analytics and automated rules to ensure that interactions lead to a tailored customer experience. Standard architecture embodied across retail allows for existing IT architecture and infrastructure to be used in this way, so retailers can reap the benefits – as well as ensuring security, privacy and scalability – straight away.
How do we know automation is the future?
One success story of an online brand is Made.com who transitioned from solely being an online enterprise to having a standalone store that offered customers a chance to see their favourite products in real-life. By tailoring its offering, from the website and Instagram-friendly purchasing channels, into a seamless shopping experience the company offers a true omnichannel buying journey. The millennial-targeting furniture store utilises both the physical and the digital to give life to the brand’s physical presence.
Capgemini’s Smart Stores report has also shown that younger shoppers i.e. millennials (68%) and Gen Z (60%) would rather visit a physical store, providing that automation makes the in-store experience more fun and engaging. Therefore, it’s even more reason for stores to diverge away from the ‘traditional’ view of retail.
Primark, on the other hand currently does not offer customers the option of purchasing products online, and whilst in the current climate that will prove a challenge for the business, its new Birmingham megastore is a good example of adapting to evolving customer expectations and demonstrates ways the high street can shift towards these changing customer expectations – which can’t be matched by the digital realm alone. This includes featuring “in store experiences” unique to Primark such as beauty salons, barbers and themed restaurants. While these changes make the experience a lot more attractive to shoppers, automation can bind the new physical settings and to the digital platforms seamlessly.
As well as declining footfall, retailers need to investigate various societal changes that impact the retail sector. There’s a recognition that out-of-town locations are becoming less attractive due to declining car ownership. This is especially true when home delivery tends to be expensive and limited – signaling these retailers will benefit from moving to smaller, urban locations.
The Centre for Retail Research has also indicated that the top 150 UK retailers have 20% more space than they can afford, demonstrating why shops such as Carpetright and New Look have been restructuring landlord agreements and closing shops. Automation can offer an alternative through reducing business costs – by accelerating the ‘click and collect’ process, reducing the risk of stock spoilage and theft, and increasing employee productivity. As a result, automation can benefit customers’ experience while saving costs for businesses.
Thoughts for the future
While it feels like an ongoing flurry of negative retail headlines, automation offers exciting promise to fight back against falling footfall by improving the overall modern customer experience.
However, to take advantage of automation in the retail sector, organisations should look at the transition as a multi-faceted initiative. This includes prioritising automation, learning from collected data, creating an automation operating model and re-skilling and re-training employees. Challenges or ‘pain points’, of the physical shopping experience can be reduced while allowing retailers to tap into opportunities not available to their digital-native online counterparts.
As retailers look ahead towards a hopeful rebound and normalisation of their business operations and of society itself, we should expect to see a changed retail landscape. One in which online experiences have been redesigned and simplified, in which consumer buying habits are more considered, and in which the in-store experience has been rethought and repositioned as a new component. Importantly, we will see a retail landscape which is powered more by automation to enable better more reactive customer experiences.
This reinvented approach to retailing will help retailers shift their focus from selling products to providing solutions to their customers’ problems. To move from offering the same products as usual, to helping their customers organise and access the types of experiences, services and offers they really want. And to transfer their business’ attention from individual transactions to prioritizing customer lifetime value, by delivering effective, personal experiences to customers.
Christopher Baird is senior manager, inventive shopping within Capgemini Invent
Main image: Adobe Stock
Author image courtesy of Christopher Baird/Capgemini Invent