In 1974 the first product in the world was bought using barcode technology. A shop assistant in a small Ohio town scanned a packet of Wrigley’s chewing gum, automatically registering the price as $0.67. We could consider that moment to be the birth of modern retail as we know it. Not only did the barcode help retailers better manage supply chain logistics and control stock, but it also transformed the in-store shopping experience. Barcode scanning shortened check-out queues and the technology underpinned the later development of customer databases and loyalty cards.
Data now sits at the heart of the modern shopping experience and retailers all over the world have introduced new technologies in an effort to help improve the shopping experience. However, many have confused digital as being a toy rather than a tool that helps improve customer service and new product development. For technology to be successful, it must move away from being a playful add-on and actually help customers during the retail journey, making it as easy and convenient as possible for them to shop but not distract them. For most, this is not happening yet, with several retailers focusing on implementing technology gimmicks that have gone under used.
Our research into consumer shopping experiences found that just over a quarter (26%) of UK shoppers believe that in-store technology does not work properly, with only 22% saying they plan to use technologies such as interactive displays (where they exist) in the future. So, while it is brilliant to see businesses experiment with how they can use exciting new technology in an eye-catching way, gimmicks alone will not lead to customer loyalty. Retailers must make their technology investments relevant to consumer needs. Brands need to shift their approach, from technology as an add-on, to being fully integrated, pulling together disparate data to develop services, apps and products that are of value to their customers.
Getting the basics right
Retailers therefore need to look at what shoppers really want. Take the launch of Amazon’s checkout-free store, Amazon Go, as an example. At a very basic level, the store is designed with the customer at the heart: using RFID tags to track the movement of goods, shoppers are free to walk in and out at their own leisure, picking up items they need along the way. Ultimately, it is in both the interests of the consumer and retailer to make the shopping experience as smooth and frictionless as possible.
But where should retailers start? A frictionless experience is a fine balance between four elements: convenience, experience, price and community. While convenience is currently the focus of most retailers’ strategies, at any one time they need to consider at least two of the remaining components to win over the customer.
There is a reason why Amazon is predicted to control 50% of the US retail market by 2021, and that is because it is the master of convenience and in many cases, experience. The launch of Amazon Go was hailed as a game changer in the retail world. At the heart of its success is the understanding of what people want – Amazon even knew it was going to make checkout-less stores without first knowing how it was going to do it. Like many great ideas, it took a while for the technology to catch up.
Whilst the use of technology in retail will only continue, that is not to say that stores and interactions should become void of the human touch. Most people still prefer to deal with a person while shopping. Where digital technology can make a difference is with transforming the role of the in-store assistants. In a shop without check-outs, employees will need to look at how they can offer added value on top of the digital experience. This will become vital as the importance of community grows within the retail space. That is why we are seeing shops all over the world make space for coffee shops in their stores, to make retail stores more than just places that you visit for a short period to become a hub for people come together to meet up and spend time, further boosting the customer experience.
Test the waters before you jump in
Ultimately, brands need to work towards making the shopping process as frictionless as possible. A brand will be judged on its weakest link, whether it is the online offering or in-store experience. While it may be daunting to be in the first wave of technology adopters, it is difficult to calculate the real ROI of experimental technology until it is tried and tested. Retailers should experiment and start small. For example, designer Rebecca Minkoff recently introduced a line of connected handbags. The ten limited edition bags included smart tags that, when scanned, offered tickets to a runway event. Not only did this increase customer satisfaction, but the data collected from these tags gleaned insights on customers that helped drive sales and marketing decisions. This approach could be replicated in so many different ways, enticing customers with exclusive deals.
With so many options available, retailers must take the time to determine what kind of technology they need and why, to shift technology implementation from being gimmicky to being digital that matters.
About the author
Scott Clarke, Chief Digital Officer and Global Consulting Leader, Retail, Consumer Goods, Travel and Hospitality, Cognizant