The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
Economic and technological shifts have rewritten the shopping journey. What was once transactional in nature is instead focused on relationship building. Each step of that journey – whether offline or online – is centered on how to elevate consumer engagement in order to deepen said relationship.
Taken together, these shifts have led to a plethora of store closings, thus, giving rise to the notion of an impending retail apocalypse. Thankfully for sleepless retail executives, the impending doom has been overstated. Euromonitor International projects 83% of goods purchased globally in 2022 will still be bought in store.
In recent years, talk of Amazon has dominated industry gatherings, but at this week’s National Retail Federation’s annual show, NRF 2018: Retail’s Big Show, the internet retailer behemoth was largely mentioned only in hush tones. It seems the industry is starting to push back on the notion that the end is near for brick-and-mortar outlets. Instead of shifting into a defensive mode, retailers are going on the offense, and using technology to entice consumers to shop both online and in store.
The floor of NRF 2018 gave a glimpse of three ways technology will change how consumers shop in store by 2020.
Taking a page from online retailers, brick-and-mortar retailers will be able to change prices on products and services hourly. The technology will enable retailers to adjust prices on-the-go or mark down weekly specials more efficiently. Retailers can even make adjustments based on supply and demand.
Couple this technology with more affordable item-level sensors and grocers could more quickly locate and drop prices on food that may spoil in the coming days. In recent years, RFID tags have fallen in price to roughly six cents, making it more affordable to digitize the supply chain. Item-level sensors could also be leveraged to power a more seamless checkout as well as a tool to drive future customer engagement.
Kroger, the largest grocer in the US after Walmart, is an example of one retailer that has committed to digital price tags in nearly 200 stores by the end of 2018. Kroger Edge will also be able to share nutritional information and highlight items that match a consumer’s dietary restrictions. One day it could eventually be able to communicate with customers’ smartphones to highlight products on their shopping list as they walk down aisles – helping hurried shoppers quickly locate the desired product.
Technology is enabling retailers to mix digital with reality to enhance consumer engagement and boost brand loyalty. While many of the first use cases in commerce have been deployed more so to enrich online shopping, retailers are starting to use the technology to create more fun, experiential settings in store.
ModiFace, which is behind many of the augmented reality mobile apps used by several beauty brands today to visualize looks, recently released an augmented reality mirror for in-store use. The mirror, which leverages facial tracking and 3D video, enables consumers to try on different makeup shades in store. SenseMi’s interactive smart mirror does the same for beauty as well as fashion, enabling consumers to virtually try on an outfit even before entering a fitting room.
Using only light, Spacee out of Texas has developed a technology that transforms virtually any 2D or 3D surface into an interactive touch screen. At NRF 2018, Spacee was showcasing how it worked with Walmart to create an end-cap for Nest products using only its technology and plastic pieces that mimicked the shape of the actual Nest products. In high-theft categories like consumer electronics, the faux end-caps can eliminate security concerns for retailers altogether while providing end-consumers with a more enhanced experience that better showcases what a product can do.
Since Amazon Go made headlines a year ago, retailers have been knocking on the doors of technology firms wanting to understand how to create unmanned store fronts themselves. The rise of more affordable item-level tagging brought forth by the Internet of Things era and new computer learning technologies and smarter algorithms ushered in by artificial intelligence have made it possible. In some cases, retailers have been blinded by the bright shiny new nature of these technologies rather than considering if it fits for their format. For example, such technology makes more sense in convenience stores where retailers do not expect store personnel to upsell consumers.
Vendors are responding to the increased demand for unmanned checkouts. Mastercard showcased its partnership with Ava Retail to create unmanned checkouts in convenience store environments. The sensor technology tracks the consumer in store and adds their items to a virtual shopping cart. When the consumer leaves the store, the cart is transferred to a mobile app and the payment is processed through Mastercard’s Masterpass. Others like Intel and IBM now also offer a suite of technologies to create staff-free stores. Meanwhile, it is already happening in China as Alibaba and JD.com are actively testing and announcing plans to open more unmanned posts.
In an era in which everyone sells everything, retailers must work harder to differentiate themselves from others. Retailers can no longer win on price or proximity. Instead, retailers need to harken back to their brand promise and what differentiates them from others selling the same goods. Technology will be key to assisting retailers with creating new, meaningful ways for consumers to interact with the brand. The biggest issue holding back retailers today is not the availability of technology, but instead, understanding and embracing the technologies that would further their brand ethos.