Sexy new technologies will engage customers to drive a differentiated shopping experience as well as drive new operational efficiencies in stores.
Customers want to see techie gadgets when they go into brick-and-mortar stores, and retailers are going to be adding cool things like robots that give them directions, kiosks for in-store ordering, and magic mirrors for trying on clothes.
At the same time, retailers are craving operational efficiency – which in turn is driven by both the highly focused efficiency of new market entrants and wage-related legislation. This will result in more self-scanning for customers and tech to help store associates with their regular tasks.
The customer side involves retailers creating a differentiated physical retail experience that encourages people to go into their store - versus another store - or indeed just shopping online. The store is evolving into a full-scale fulfilment channel rather than merely a distribution center.
“The store's value proposition will evolve from being a distribution channel to that of a platform for discovery, engagement, experience and interaction,” according to the World Economic Forum.
Customers want something that entertains, intrigues and provides an interesting experience; 76% of retailers believe store results will continue to erode if they don’t invest in in-store tech. For example, virtual reality googles to see inventory, magic mirrors or 3D printing can attract a whole new category of customers. Lego is a good example of entertaining in store; with a very cool mosaic maker at its newest London’s store.
The operational side means making stores more efficient; i.e. selling more stuff with fewer people in the store. The new living wage can mean a cut in retail staff, so the remaining employees need to do more with less. Anything that drives efficiency and productivity can streamline the customer journey; like self-scanning kiosks to order products for delivery and enhanced product information for staff or customers.
Amazon is also really raising the overall operational efficiency bar across the entire retail operation – not just in store; for example it employs 45,000 robots across 20 fulfilment centers.
Improving the customer journey and making stores more profitable through efficiency are laudable goals for retailers. The difficulty lies in connecting all of the things together that create these cool technologies together. They must be integrated into the existing infrastructure and be able to monitor and respond to specific actions within the store – and even in the warehouse.
But the effort is worth it. This is the year stores will geek up – and not a moment too soon.