TOP 3 RETAIL STORE INNOVATIONS WE CAN EXPECT TO SEE IN 2017 Yay or Nay?
To cite Harvard Business Review: “In the Future of Retail, We’re Never Not Shopping”.
Digitization will allow us to shop instantly everywhere we go, as easy as never before. This trend is exciting for consumers, but will it eventually eliminate retail locations? In 2017 the majority of people will still prefer shopping in local stores. Consumers will still like to touch, experience, and test products before they buy– especially when it is a good of high value. Plus, retail shopping has been perceived as a routine and social activity ever since.
However, brick and mortar retailers will need to react to changing consumer preferences and enhance the ease and experience of retail shopping, in order to remain the channel of choice.
We want to introduce you to the top three retail innovations that bear the potential of turning the spotlight back onto local stores.
1. Faster Check-Out
According to Nielsen, 41% of consumers rate fast checkout as a highly influential criteria when selecting stores. This is why smooth payment processes are on top of the agenda for many retailers today. Mobile payment makes the shopping experience more seamless and less time-consuming. Paying with your smartphone or watch is not far from becoming daily routine, MasterCard even tests out payment options that verify consumer’s payment authorization via biometric identification, such as voice or facial recognition. This will solve the annoyance of queueing and cash handling, minimize human error, add extra security layers, and will make the life of the modern consumer more efficient. Studies are even suggesting that cashless payment drives people to spend more – good news for every retailer.
Amazon Go and the Omnichannel Consumer
The most compelling example for a super-smooth checkout experience is Amazon Go’s new Just Walk Out technology: The online retail giant is about to open the world’s first checkout-free grocery store in Seattle, powered by the Amazon Go app. Customers simply walk out the door without standing in line or stopping at a checkout terminal. Instead, small sensors are recording the items when leaving the store and charge it directly on the customer’s Amazon account. By supplementing existing online profiles with critical in-store shopping preferences, Amazon is able to create comprehensive omnichannel consumer profiles. This kind of consumer profiling is the necessary foundation for profitable customer relationships, as it allows retailers to retain consumers through the right messaging. MiNODES’ Offline-to-Online Retargeting technologyempowers traditional brick and mortar retailers with the same tools that digital-native retail business like Amazon are basing their success on. MiNODES’ technology tags visitors as soon as they enter the store and subsequently reaches them with targeted online and mobile ads, inviting them to re-visit the local store, to browse the online shop, or to download the brand’s app.
2. Digital Shelving
Physical price tags will soon belong to the past. The retailer of the future will implement digital shelves, which allow for dynamic pricing, on-demand product information, and more accurate stock monitoring.
Dynamic Pricing
Imagine a pricing strategy that automatically adapts to real-time demand and external influences. What might sound extremely exciting in the ear of retailers, may evoke concerns for consumers: having to deal with price elasticity while shopping in-store? That’s a no-go. Retailers need to find a way to fix prices for individual customers for the length of their in-store shopping trips, in order to prevent confusion or anger. What’s more interesting for consumers is the offering of personalized discounts depending on past consumption patterns and real-time spending. If the value in your current shopping cart is for example very high, the supermarket may offer you a voucher for a chocolate treat. The opportunities are immense.
Communication and Interaction
In a world that is becoming increasingly conscious about the environmental impact of production and consumption, providing at-a-glance information about the origin of ingredients and nutritional facts will make a huge difference. The display will allow marketers to provide shoppers with dynamic and engaging visual communication that mimics the online experience, including features such as product demonstrations, reviews, or recommendations for related products. The in-store signage platform also lends itself well for offering interactive VR experiences, allowing Marketers to target and entertain consumers with personalized brand experiences.
When the display hardware is integrated with MiNODES advanced consumer data, which uncovers metrics such as dwell time within specific store sections and visitor loyalty, retailers are able to create personalized in-store display campaigns that reflect the preferences of the consumer who is interacting with the smart shelves, based on their past shopping behavior.
Digital Shelving in Practice
There are two outstanding examples for businesses experimenting with intelligent shelve solutions: Kroger's Cincinnati store implemented a smart shelf system that assists consumers with finding items on their shopping lists. The Italian retailer Coop showcased its future retail store at last year’s Milan EXPO. One of their shelf innovation’s key features is the visualization of product-specific information, such as origin, nutritional parameters, and carbon footprint. The information is triggered by Kinekt sensors that recognize and react to consumers’ hand gestures.
Stock Monitoring
Digital shelving gives real-time information about the quantity of merchandise available, Retailers can access advanced merchandise analytics that enable them to adapt stock levels to consumer demand more accurately, reducing the risk of lost sales and out of stock issues by up to 5%. This is especially critical for food retail businesses, as their share of perishable products comprise of almost 25% of the entire inventory. One of the main benefits to the modern omnichannel consumer is improved local search, as in-store product availability can be displayed across online and mobile search platforms in real-time.
Overall, digital shelves will provide more transparent and personalized retail shopping. Consumers will likely experience a more engaging shopping trip and retailers will benefit from significantly increased consumer dwell times at specific points of interest. The innovation trends are supported by a recent Motorola Solutions retail survey, which found out that 74% of retailers believe that a more engaging retail experience will be critical to business success over the next five years.
3. Smart Mirrors
Smart mirrors and fitting rooms, such as those by Oak Labs, play a major part in the continuous digitalization of fashion retail. Their interface connects the physical and the digital world, enhances the customer experience, and provides the retailer with valuable data about shopper behavior as well as employee performance. To obtain a 360° view of the consumer, these insights should be supplemented with additional data sources. MiNODES provides a full data integration platform that allows retailers to obtain a comprehensive view of each consumer segment.
Virtual Shopping Assistants
The mirrors identify RFID chips integrated into the merchandise tags and act as a virtual shopping assistant. The chips trigger the mirror to for example showcase all items that are brought inside the fitting room. The customer can experience the garments in Virtual Reality and order different sizes and colors via touchscreen. The consumer may ask for help, change the lighting to fit different occasions, reserve items for later, send items to the online cart, or check out right away.
Increased Customer Engagement
Ralph Lauren adapted Oak Labs’ smart mirror technology as a first mover, when it merged digital technology and physical facilities at its Fifth Avenue flagship store last November. The results have been overwhelming: customer engagement increased by 90%and the company gained an immense amount of valuable consumer information, enabling them to further improve their retail operations.
Bottom Line
The signs are clearly pointing in one direction: the technology innovations that are about to transform the retail channel will provide consumers with new levels of convenience and entertainment that have until now been exclusively available at online stores. Consumers will soon be able to enjoy more seamless and engaging experiences and retailers will gain new sources of powerful data.
However, in order to make the right investment decision when choosing the technology of the future, it is critical to have a thorough understanding of key customer groups today. Every marketing measure and every customer-facing technology needs to get measured and evaluated against predefined performance goals and benchmarks. MiNODES delivers advanced insights into in-store consumer behavior and enables data-driven decision-making for C-level as well as store management.
It will still take some time until the first of the technological innovations outlined above will be ready for large scale market deployment. Yet we are positive that we will definitely experience the early days of those innovations in 2017.
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