David Shukri, Retail Industry Champion at Bluefin, a Mindtree company examines how digital technology is changing the in-store experience, the areas where technology is adding real value and how retailers are responding in physical stores around the world.
IMAGINE IT is Tuesday afternoon, around 2:30pm. You take a stroll down your local high street and decide to pop in to a few stores for a nose around. Perhaps a hardware store or a fashion outlet. At times, you’d be forgiven for thinking the digital revolution was all just a dream. There might be a few posters dotted around advertising some delivery and collection options, or maybe a hashtag or an Instagram account for you to engage with. What about an in-store digital kiosk? Have you seen one of those recently? Have you seen anyone using one?
When you look more closely, you notice the technology is out there, it’s just that in many cases it doesn’t feel joined up. The result can be uninspiring and leaves many shoppers feeling disappointed. The high street is under pressure and the need to reduce costs and improve efficiency means there is not always a huge budget, or appetite, for rolling-out expensive new concepts. That said, focussing on some key trends and technology enablers should help to reduce risk and improve performance.
“Carrefour’s connected LED lightening guidesn shoppers to promotional items”
SHOPPERS & BEHAVIOURS
It is important to start from the ground up. That means honing in on what modern shoppers want and how they behave. Retailers should be paying particular attention to generation Z, or GZ (pronounced GZee). Born roughly around the turn of the millennium, this cohort of consumers reportedly has shorter attention spans than goldfish. According to cmo.com, 79% of GZ would feel ‘emotional distress’ if they were kept from their mobile devices too long. Yet the same source states that 40% of all consumers will come from this group by the year 2020. More than any group before them, GZ sees the virtual and physical worlds as a single continuous experience in which technology itself is not that impressive. Instead, they see it as a function of everyday life, there to help them through their shopping journey.
Whilst GZ has not yet reached full consumer maturity, in reality the rest of us have already adopted many similar behaviours. The shopper journey highlights this best; broadly speaking the shopper journey now involves discovering and considering products, making a decision and purchasing, before finally sharing the experience and recommending it to others. Technologies that help GZ shoppers – or indeed any hyper-connected, tech savvy customer – to reduce the friction experienced at any of these points will play a big role in the future of retail.
Today, there are numerous ways of helping shoppers to learn more about products. The MemoMi Memory Mirror for example is the next generation in magic mirror. It enables shoppers to see a 360-degree video of themselves wearing different variants of a garment. US retailer Neiman Marcus is trialling the technology and sees major time savings for customers who will no longer have to traipse to and from changing rooms in search of different items. It is good news for Neiman Marcus too – the data gathered from user sessions can inform future range decisions and help to target shoppers with personalised offers on similar items. What’s more, if you are the kind of shopper that likes to share your every move with your friends, MemoMi can be streamed directly to social platforms.
Another technology that was on trial last year came from Dutch lighting and electronics specialist, Philips. At its hypermarket in Lille, French retailer Carrefour fitted 2.5km of Philips connected LED lighting that can transmit location information to a smartphone. The positioning technology is incredibly accurate and combined with Carrefour’s existing shopper engagement app, customers can pre-build shopping lists complete with promotional items and then be guided directly to their selections once in-store.
Nowadays though, it is not all about customer facing technology when it comes to providing more product information. Retailers in a number of markets have begun trials using video analytics. This technology uses a retailer’s existing CCTV cameras to analyse the behaviour and characteristics of shoppers in specific parts of the store. When it identifies a shopper that is likely to be in a buying frame of mind, it alerts a store assistant to engage with the individual and close the deal with a little personal care. In high value categories such as electricals, where products can be quite complicated and dwell times at shelves are reasonably long, an interaction with a product expert could be just the thing to trigger a purchase.
PAY & GO
Lengthy checkout queues are one of the biggest headaches in any physical store. Contactless payment is helping and mobile point-of-sale solutions such as iZettle are becoming more prevalent among small business owners. However, in Asia Pacific a platform called Sprooki goes further in facilitating the purchase phase of the customer journey. Sprooki is comprised of four individual tools, which together enable retailers to target shoppers with relevant messages and provide secure mobile pre-ordering for in-store collection.
Interestingly, Waitrose has just announced it’s opening a cashless store in Sky’s head office, a first for the UK’s grocery sector. Shoppers will only be able to pay using cards and mobile devices in a move the retailer says responds to customer feedback. This initiative also responds to three other important points. Firstly, it clearly helps to overcome an existing challenge. Secondly, it will reduce friction in the shopping journey. Finally, it will surely prove scalable as more people switch away from cash and towards contactless payment.
Thus, it comes to closing the loop and for modern shoppers that means sharing experiences of products and services. Connecting online and offline in this respect can be a challenge in physical stores, but Nordstrom in the US made moves to overcome this in 2013 when it began displaying popular items with red Pinterest tags. Not only does this lend products a certain validation, but a retailer can also use the data it gathers from social ‘likes’ to support inventory and ranging decisions. A similarly low-tech deployment from Tesco recently worked on the same premise. In-store point-of-sale advertising in conjunction with Gillette Fusion Proshield featured a star rating based on feedback from online customer reviews. Whilst not hugely sophisticated, we are likely to see more of this approach as it avoids the need for cumbersome interfaces like QR codes. It also generates a sense that shoppers are more deeply involved with the retail experience and contributing to what ends up on the shelves.
These are exciting times for physical stores. Challenging yes, but exciting too. There is a huge amount of innovation taking place around the world. Ultimately, such innovations will help bricks and mortar retail to reposition and find relevance in a digital world. Still, while testing and trialling are vital parts of the development curve, consolidating the learnings into a joined up, end-to-end experience will be just as important. A time is coming when shoppers will expect a more holistic approach – one that blends online and offline more comprehensively and makes the high street a key part of the shopping experience. For it will undoubtedly remain part of the retail mix, but only those retailers who heed the trends will be there to see it. Only those who become truly frictionless will survive to enjoy it.
