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In-store technology: how does it help retailers and customers?

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In-store technology: how does it help retailers and customers?
Walmart has been hailed an in-store technology success story. Its share of the US online sales market has grown from 3.3% in 2017 to 4.6% in 2019, as its investment in in-store technology continues to pay dividends. More and more retailers are following suit and using in-store technology to improve the experiences of customers and to make business processes like restocking, security and pricing more efficient. Moreover, as the evolution of 5G technology promises more internet speed and functionality, experts are predicting an even greater reliance on in-store technology by retailers – both large and small.

 

Experiential shopping

Experiential shopping is widely seen as an antidote to the decline in high street shopping, otherwise termed “the death of the high street”. Customers, interested in the experience that shopping delivers – something that can’t be replicated online, are slowly returning to high street shopping where they can be assured of (i) novel, unique experiences they won’t get online, and (ii) a convenient and enjoyable shopping experience which matches the speed and convenience of an online shop. In fact, retailers that don’t deliver enjoyable and convenient experiences for their customers are caught in the high street decline much more so than retailers prepared to move with the times and adapt to what customers want. Experiential shopping experiences that are helping to keep high street retailers afloat, not only cater for the needs of shoppers while they are actually shopping, they also cater to the needs of the tired shopper who has finished their shop and wants a convenient place to have a meal, or a coffee. This has led to many high street retailers incorporating café and restaurant facilities to their existing premises. This allows customers to shop, in the knowledge that they don’t have far to travel in order to rest and get refreshments like food and drink. Waterstone’s is a case in point. It has even started to produce its own brand of coffee.

 

In-store technology is being adapted by retailers everywhere to deliver experiential shopping to in-store customers, in the hope of creating more loyal customers prepared to return to high street shops and choose a high street shopping experience over an online one. VR is an apt example of this application of in-store technology. Home furnishings retailers like Macy’s have introduced VR systems so their in-store customers can “see” how home furnishing products on display will look inside their own homes. Customers looking to purchase home furnishings now have a reason to visit the store, as opposed to making a purchase online, because with VR technology they can visualise how a piece of furniture would “look” in their existing interiors and they can use the technology to help them decide if something is too big or small, or if it matches the rest of the interior as expected. Use of VR technology has the added advantage of reducing Macy’s operating costs as costs associated with returns of products that don’t fit as expected have been reduced.  

 

Similarly, Audi introduced a VR orientated system into their showrooms in 2017. This immersive system allows customers to create their “dream car” and explore the car’s exterior and interior in detail. Users are given special access to so-called “Audi moments” where they are connected to car-themed experiences like the pit stop atmosphere at the Le Mans 24 Hours race.

 

The focus of in-store technology is to enhance the overall experience of shopping. Specsavers, for example has developed a system whereby customers can “try on” glasses remotely, so that when they arrive at a store, they can quickly choose the glasses they like and buy them. This tool reduces the length that busy shoppers have to spend browsing the rows and rows of glasses and styles available, and it has proven to be very popular with its customer base.

 

Proving that VR could be successfully used in marketing campaigns, Topshop used a VR themed campaign called Splash! to attract new customers and deliver a novel experience to their in-store customers. In implementing this campaign, the brand turned its flagship Oxford Street store into an interactive pool scene. Customers were able to “ride” on a virtual water slide which had a 360 degree perspective when they wore the Oculus headsets provided.

 

Combining online and bricks and mortar store experiences

Because more and more people are shopping online now, retailers have given some considerable thought to how the advantages of online shopping can be assimilated into an in-store retail experience, in the hope that this will bring more shoppers back to shopping by visiting shops in-store as opposed to buying online. As with the concept of experiential shopping, the rationale is simple - “how can in-store shopping be made more attractive than online shopping?”. As ever, convenience and speed have been key factors in creating the kind of shopping experiences that encourage shoppers to prefer the in-store experience. Chinese brand Hema is a prime example. Hema stores, opening in China since 2016 have successfully combined elements of online shopping into bricks and mortar stores, thereby providing unique and convenient tech driven shopping experiences for customers. Hema customers can visit their store and scan what are called “QR codes” which contain a lot of detailed information about the individual products on sale, for example scanning a QR code will typically reveal information like the exact date food items were harvested and delivered to the store. Shoppers use this information to select the best products available, and because this can’t be done online, Hema stores have successfully added value to the in-store experience, which has, in turn, attracted higher volumes of footfall.

 

Hema has also successfully adapted robotics to provide a more convenient shopping experience for shoppers. Hema customers can use the Hema app to book a table at the in-store “robotic restaurant” and place their food orders before they arrive at the tables. Hema robots pick the items to be cooked and deliver these to the kitchen, and also deliver them to the required tables when they are ready. This dispenses with the need to wait for food to be cooked and served, and it is attracting increasingly levels of footfall to Hema stores.

 

Chinese retailer JD.com has also taken a lead in the development of in-store tech that provides shoppers with the convenience of an online experience, while also offering novel, in-store experiences that aren’t available online. In what is being referred to as the development of “super convenient” shopping experiences, JD.com has developed a “smart cart”. This is an autonomous shopping cart which follows a customer around the shop and does not need to be pushed. As a result, customers have their hands free so they can examine products more closely and attend to personal responsibilities like looking after children more readily. The so-called smart carts also “sense” when an item is picked up and can display additional information about the product when it is lifted up, with technology known as “magic mirrors”.

 

Development of in-store tech has been widely used in the USA, too, for example in Nike’s flagship store, which has been dubbed the “Nike House of Innovation 000”. The store allows for shoppers to use instant checkout points and mobile checkouts that are linked to a customer’s smart phone. This dispenses with the need to wait in a queue, thereby making the shopping experiences quicker and more convenient. The flagship Nike store also allows customers to order shoes online and try them on in-store. Customers use this facility by arriving through a dedicated entrance point, finding a locker with their name on it, which contains the shoes they want to try on. The locker can be unlocked via an app on the customer’s smart phones.

 

US grocery giant Kroger has developed unique technology to communicate pricing information to their in-store customers. This technology allows for the digital display of pricing and nutritional information. It can be updated remotely to ensure it is current and accurate. There are plans to expand this technology to allow customers to integrate their customers’ shopping lists, which will enable the Kroger technology to issue reminders and suggestions about what to shop for next. There have also been incidental benefits, for Kroger, in introducing these in-store technologies. One is that the system works entirely on renewable energy, thereby saving electricity. It also saves the raw materials that would otherwise have been used in the creation of paper pricing and information tags. Moreover, high powered overhead lighting is no longer required to ensure that customers can read paper information and price tags.

 

In its unique effort to attract customers back to Ted Baker stores, Ted Baker has been particularly innovative by designing an interactive window. People walking past the shop windows are encouraged to interact with the various tools and campaigns that are active at the time. These tools and campaigns are then shared via social media which, in turn provides a welcome marketing boost to the Ted Baker brand.

 

Personalisation through retailer apps

Personalisation of the shopping experience, delivered through retailer apps is being used to attract more customers into high street shops, and to re-engage avid online shoppers with the promise of a convenient and enjoyable high street shopping experience.

 

Retailer apps are growing in popularity simply because they make the experience of shopping more personal to the shopper and as such, easier. When shoppers have a more personal experience, they can avoid unwanted messages, for example discounts that don’t apply to them. A more personal experience also allows customers to quickly locate products that interest them, as opposed to conducting a search through masses of stock they may not be interested in.

 

Users can download retailer apps to their smartphones and use them to navigate large premises quickly, without the need to ask directions. The apps can also be used to check stock remotely, and check prices, opening hours and store itinerary. Retailer apps can be used to make payment securely and conveniently. Some retailer apps even allow users to scan and make payment for items in-store, so there is no need to queue to make a purchase. Starbucks allow users of its retailer app to add loyalty points to their loyalty accounts after making purchases with a retailer app.

 

Retailer apps are being used to deliver a comparable experience to the one that customers get online. When shopping online, customers have easy access to an array of reviews, ratings and comments about different products. When shopping without a retailer app, customers don’t have this information to hand, so many are likely to wait and make their purchase online, where they can compare prices, reviews and ratings and use the information to “shop around”. Retailer apps also solve common problems that can irk customers like when stock on display has been moved around in-store, so the customer does not know if a product is available in their size.

 

As such, retailer apps have solved major problems that were repelling and alienating in-store shoppers, and it is no surprise that use of retailer apps to compliment an in-store shopping experience has soared. A study by payment solution company, Synchrony has shown that retailer app use doubled in 2018, from an average of two apps per phone to four apps per phone. 67% of customers surveyed reported downloading a retailer app on their smart phone in 2018, compared to 63% the previous year.

 

Retailers apps are being used to deliver relevant discounts and incentives to customers, which is always preferable to the traditional “one size fits all” advertisement of a discount or deal, because a customer’s time is not being wasted with irrelevant messages and information. Customers receiving information on discounts and deals through a retailer app are more likely to find them appealing and persuasive because they have been specifically targeted.

 

Restocking

The use of in-store technology is undoubtedly making business processes like restocking more efficient. Some retailers are using AI and robotic systems to scan shelves and carry out restocking. This delivers benefits to retailers in that their “out of stock” status is either eliminated, or greatly reduced. The benefits of this are far reaching for retailers, because research shows that today’s customers value convenience, meaning that customers don’t want to make the trip to a store, only to find that the items they want to buy, are out of stock. A study by Which? even highlighted that repeated out of stock status actually harms a brand’s reputation. Moreover, an out of stock status almost always equals lost revenue for a retailer, because, had that out of stock item been in stock, it may have resulted in a sale. The use of AI can also be used to restock more efficiently, and it can be used to integrate restocking processes with wider processes like operations management and pricing strategies. With AI constantly monitoring stock levels, retailers can more quickly identify which products are selling better or worse than expected, and their logistics, pricing and warehouse management strategies can be optimised as a result.

 

Customers, too, benefit from this, because, when stock is replenished systematically, there is less chance that an item they were expecting to be there is out of stock.

 

Security

The National Retail Federation estimates that US retailers lose almost $50 billion USD to theft every year. With more retailers relying on AI and robotics to assist with restocking, it is easier to identify theft and stock losses. In fact, theft and stock monitoring functionality can be built into purpose-built AI systems, so that theft and stock losses are flagged more quickly. When a pattern of theft and stock losses is identified, human executives can work to find out the cause and remedy it. It may be that inadequate signage is encouraging theft as a result of shoplifting, or it may be that a member of staff is stealing directly from stored stock. Manual systems of stock control struggle to manipulate data in the way that AI has the power to, and as such an AI system is much better placed to identify theft more quickly.

 

In-store technology: how does it help retailers and customers?

In-store technology has been used in many unique and innovative ways to engage customers and there is no doubt that technology including VR systems, mobile checkouts and retailer apps has gone a long way to entice customers to come back to bricks and mortar stores as opposed to buying goods and services online. Technology has served as the means through which retailers have been able to deliver novel, experiential shopping to customers thereby enticing customers to shop in stores as opposed to online, because the tech allows for a quicker, more personal and convenient shopping experience. Additionally, technology has allowed retailers to solve some of the problems surrounding why customers have shunned bricks and mortar premises in favour of online shopping experiences. Some of the retail trends known as “death of the high street” have been mitigated and in some cases reversed as a direct result of technology. As it stands now retailers that have not used technology to actively engage customers are suffering the effects of the decline in high street and in-store shopping, much more acutely. Furthermore, retailers are now using technology, specifically AI and robotics to cut costs associated with mundane tasks like restocking, allowing them to cut overall operating costs.

 

 

 

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