The reinvention of in-store retail is underway. To stay competitive on the cut-throat high street, there’s no room for complacency.
Proactively embracing tech to exceed customer and employee expectations is no longer just a nice-to-have, it’s a must-have.
But while the possibilities created by advances in machine learning and the Internet of Things are proving revolutionary for some retailers, others are struggling to remain relevant and big names are shutting up shop for good.
Not every retailer can be Amazonian in scale but without some form of differentiation, any small fish left in the big pond will be under serious threat.
Here we explore how retailers’ physical stores can compete with customers’ online experience: five examples of transformational tech with the potential to spearhead a high street renaissance.
The Rise of Machine Learning
Central to this cataclysmic change is machine learning: the ability for computers to use data to learn. In retail, the focus is on lessons about the customer and how to meet their ever-growing demands.
Machine learning isn’t new. These data-hungry algorithms have been around for 30-40 years. What is new is the amount of data it gives users access to and the availability of its immense capabilities.
Tasks that were once the preserve of super-computers can now be carried out on a back office desktop or shop-floor mobile device.
Machine learning is central to any modern retailer’s tech tool-kit. Without harnessing its data-crunching power, it’s impossible for them to get insights into shoppers’ retail habits, dreams and desires: crucial if they’re going to keep the doors to their stores open.
Bryan Black, Chief Technology Officer at REPL, says: “There are a lot of myths to bust about machine learning. Retailers want to know what they can use it for: it can definitely solve some of their problems but it can’t magically solve them all.
“Ten years ago, it would have taken a lot of time and money for any of them to take advantage of machine learning. But now we have the perfect storm of data, computer power and algorithms that means not using machine learning simply isn’t an option.
“Retailers want to know where to jump on and how to stay ahead without having to re-invest every year just to keep up. The pace of change won’t be slowing down so they can’t rest on their laurels.”
Amazon is already pioneering the possibilities of machine learning with their Amazon Go concept, checkout-free grocery stores in the US that use “just walk out technology”.
Shoppers swipe in with their smartphone, choose their drink and snack, then leave, seemingly without paying. Instead, computer visions, sensor fusion and deep learning has detected what products they’ve taken or returned to the shelves, added them to a virtual basket and will later charge their Amazon account.
Amazon Go shows that current technology can make a physical store visit as convenient and hassle-free as an online transaction – without any logging on, clicking, swiping or dodging unwanted banner ads. Zero queues for their shoppers, rich data for them.
Black adds: “This is a taste of a future that requires a change of mindset in all retailers. Partnering with major cloud providers to make this kind of operations possible is vital for differentiation and to provide a frictionless shopping experience.”
The Power of Personalisation
Consumers are no longer fooled by a one-size-fits-all approach. They demand and expect personalisation. Retailers must have the agility to adapt.
Matching the shopper with the product and increasingly the product with the shopper is relatively straightforward online: plugging into preferences and search histories makes customisation easy.
The challenge in-store is to replicate, and then improve, this online experience by combining the best AI tech with the personality that only human beings can offer.
REPL’s Black believes this needn’t involve a ‘Big Brother’ approach: “The vision of the store of the future we saw in Minority Report is pretty much the opposite of what consumers actually want,” he says.
“Large flashing screens and retina-scanning devices just aren’t necessary as they can put people off. What’s important is the data and how that’s used.
“The key is simplicity, making tech invisible and unobtrusive while still doing its job. Retailers have to consider ethics alongside their commercial goals, especially in these GDPR-governed times.”
The holy grail for retailers is to leverage the right technology in-store to link the customer journey back to their online profile. This requires a complex set-up to know exactly who is in your store and what they’ve been browsing on your website.
This is where AI, and specifically machine learning steps in: for example, if a specific shopper is using your app or free wi-fi in-store, real-time alerts deploy assistants to offer targeted help based on where they physically are in the shop and their search history.
By de-anonymising customers in this way and bringing a human, face-to-face approach to personalisation, physical stores can rise above the experience offered by the likes of Amazon.
Black adds: “It’s very difficult to provide this connected experience and I’ve not seen anyone do it well – yet. But that’s the aim, to access and process data in real-time to create personalisation without compromising ethics.
“The best solutions are often the simplest ones. For example, following up a store visit with a message from a real person to say ‘Thanks for coming in, here’s more info about what we talked about,’ can play an important part in the path to purchase.”
The Evolving Internet of Things
The Internet of Things – those physical objects that have data capabilities – has been used in retail for the last 10-15 years. From RFID tags to the growth of self-check-outs, blurring the lines between the physical and the digital has always been a popular technological technique.
But while traditionally this has been based around proprietary systems and stand-alone devices designed for specific tasks, there’s an emerging shift towards Internet of Things platforms overseen by cloud-based providers.
These allow devices to collect data across the customer journey, from warehouse to shop floor, integrating multiple systems and optimising the overall experience.
“More and more, retailers are discovering that knowledge is power,” says Black. “The convergence of cloud capacity and Internet of Things platforms, alongside machine learning gives them unprecedented amounts of data and insight.
“With this, they can achieve more than ever before. For example, predictive maintenance alerts you to problems across your estate before they actually happen. So, armed with historical examples of when a lorry from your fleet broke down, it will look out for the possibility of this happening again and nip the issue in the bud.”
This kind of crystal ball-style foresight, when used within a fully-connected set-up, can dramatically improve margins.
“This technology is nimble and efficient,” adds Black. “Quite often, it can spot potential problems better than humans can. When that saves money off the bottom line, the ROI is very impressive.”
Get Vocal About Voice Assistance
A report from OC&C Strategy Consultants revealed that by 2022, consumers are expected to spend £3.5bn on shopping via voice-activated devices. With 10% of UK households currently owning a smart speaker such as Amazon Echo or Google Home, this figure is predicted to grow to 48% in the next four years.
The trick for retailers is to get on board with voice assistance technology now: as more and more people use these AI hubs at home, the more in-store expectations will grow.
Moving this type of frictionless transactions onto the shop floor and into the hands of employees eases frustrations about stock and staff availability.
For example, a store assistant can speak into a head-set to check if a particular pair of shoes are in stock in a size 7. A cloud-based system will be able to process that voice and the relevant data in real-time, instantly giving the customer the answer they need.
“Voice tech has improved massively over the last few years,” says Black. “There was a time when it was more frustrating than helpful but it’s reached a point now where I’m almost happy with it. It can only continue to improve and it’s definitely going to be big.”
Mobile has always played a crucial role in employee empowerment but quality expectations are higher than ever.
Staff expect the same leading-edge tech in the workplace as they use at home once they’ve clocked off. They want to find out everything about their job from their device: mobile-first is central to their working day.
When it comes to apps for retail staff, clunky just won’t cut it.
Black says: “There’s no excuse now to provide employees with anything other than clean, simple-to-use apps that make their jobs easier. All the relevant data they need can now be collected in one place.
“If you have a cool app with great UX that harnesses that data, people will want to join your company. Having a slick set-up is a big plus for staff attraction and retention, especially in retail due to the average age of the workforce and high turnover rates.”
To impress at every step of the customer journey, retailers have to make the commitment to invest and innovate. Those with legacy infrastructure baggage must either abandon it or give it a serious digital makeover.
Collaborating with experts who understand the industry, as well as the latest technology, is a positive first step to take. So while others fall by the wayside, you can future-proof your brand through tech-fuelled differentiation and delivery for your customers.