Smart Retail – The Future Thinking of Retail

As long as we continue to rely on our senses, it’s likely that we’ll still want to see, hear, smell, touch and taste the products we buy. It means that the future of retail is likely to be a combination of the traditional bricks and mortar store enhanced by digital technology and interactivity. – Jim Bennett, JT Global Enterprise Head of Sales, shares his thoughts on what a technology enabled retail landscape looks like in 2018 and onwards.

Smart Retail

Clearly, the internet has already affected retail dramatically, by offering a limitless range of products at cheaper prices with the convenience of shopping anywhere in the world through devices. Physical retail therefore needs to change too. The in-store experience needs to offer shoppers the same level of speed and convenience for them to buy, ensuring they keep coming back.

Interactivity is one of the key attributes of the store of the future. Technology lets customers see an entire product range and allow customers to engage with the brands they want to.

In today’s world, customers have more technology at their fingertips than ever before and they are not afraid to use it. Retailers embrace a multi-channelled experience for shoppers, creating valuable insights into their preferences allowing you to amend your content in near real time.

Content Summary

Smarter way to shop
IoT
Location technology
Omnichannel Retailing
Big Data
Smart Stores

Smarter way to shop

The recently published Zebra 2017 Retail Vision Study offers a fascinating insight into the future of the industry. Just under 1,700 ‘retail decision makers’ were interviewed from across the globe. The respondents represent a wide spectrum of retail segments, including specialty stores, department stores, clothes stores, supermarkets, electronics, home improvement and pharmacies.

Its key findings were:

  • 70% of retail decision makers globally are ready to adopt the Internet of Things (IoT) to improve customer experiences.
  • 73% of retailers rate managing big data as important or business critical to their operations.
  • 78% of retailers say it is important or business-critical to integrate e-commerce and in-store experiences, so an Omnichannel experience is delivered to every customer.
  • 87% of retailers will deploy mobile point-of-sale (MPOS) devices by 2021, enabling them to scan and accept credit or debit payments anywhere in the store.
  • 90% of retailers will implement buy online, pickup in store by 2021.

IoT

Delving a little deeper, 70% of retailers are planning investments in IoT; machine learning / cognitive computing (68%) and automation (57%) by 2021. Retailers want to introduce these technologies to provide a more responsive, real-time customer experience. Specifically, they see IoT as improving the supply chain through smart stock control and selections based on customer preferences. Machine learnings’ predictive strengths as a technology will solve supply chain constraints, better personalise customer experiences and improve inventory management. Automation has a wide variety of uses in retail including inventory tracking, enabling higher levels of customer service and managing stock control.

75% of European retailers are already investing in IoT technologies, such as automated inventory verification and sensors on shelves. One of the key areas retailers are addressing is supply chain performance: 72% plan to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics based on IoT technologies. IoT will particularly play an increasingly important role in security across all operations, in addition to supply chains, and enabling customer experiences and location-based marketing.

Location technology

By 2021, nearly 79% of retailers will be able to customise the store visit for customers as most of them will know when a specific customer is in the store. Retailers are predicted to pilot microlocationing technologies in the next four years and eventually adopt them in their main retailing operations. This will identify, for example, which aisles and products customers prefer and analyse the in-store journey. The goal is to generate concrete, actionable insights on customer shopping habits and buying patterns by tracking customers’ movements throughout a store, and note where people tend to linger.

Sensors can be embedded throughout a store’s digital touch points, like shelves, signs and displays and can interact with mobile devices using low-energy Bluetooth signals. These beacons are designed to send shoppers relevant in-store offers, like a special discount on a new activity tracker for someone who has lingered by the weights and yoga mats. Or it could be coupons for a shopper who consistently buys the same brand every week. Shopper analysis reveals that we tend to scan horizontally about four feet off the floor and we are two-to-four times more likely to take notice of special promotions and in-aisle displays.

Retailers are scrambling to keep up with the technology preferences of Millennials and Gen 2 have now eclipsed Baby Boomers as the world’s largest shopping group and will be 75% of the global workforce by 2025. Zebra believes that this group, born between 1980 and 1995, mark the first generation of digital natives who use technology as second nature and have high expectations for responsiveness through all online channels. IoT locationing technology is planned across a wide variety of applications by 2021 to improve store operations, optimise the customer experience and ensure responsiveness.

Omnichannel Retailing

Along with ‘IoT’, retailers will also hear a lot more about omnichannel retailing in the years ahead. In essence, it means retailers ‘meeting’ people on the channels where they are shopping and buying, whether it’s in a physical store or an online store or on social media, and connecting the dots between those channels. The purpose is to keep customers moving around within the brand ecosystem, with each channel working in harmony to nurture more sales and engagement.

Technology has created the omnichannel experience and it will continue to enhance it. The Zebra study found that retailers think that superior omnichannel support requires 90% inventory accuracy or greater to enable consistently excellent customer experiences. Eight out of ten customers use their smartphones while shopping as in-store shopping assistants, making omnichannel integration essential for the future success of any retailer. 78% rated the importance of integrating e-commerce and in-store experiences as important / business critical.

Big Data

73% of retailers in the study rated managing big data as important or business-critical to their operations. By 2021, at least 75% of retailers anticipate investing in predictive and software analytics for loss prevention and price optimisation along with cameras and video analytics for operational purposes and improving the overall customer experience. Market-basket analysis, customer segmentation and centralised customer data and intelligence are the top tech initiatives retailers are prioritising.

Smart Stores

In the future, everything will connect to the internet: washing machines, mattresses, thermostats, lightbulbs, door locks, cookers, security cameras and vacuum cleaners. There are already smart examples of each of these but internet connectivity will become ubiquitous. Just as consumers are embracing the internet so must retailers. Retailing and retailers will either make clear strategic decisions that permit online retail to coexist with other retail channels in a omnichannel world or, they will avoid avoiding making these decisions and fail to keep up. The unfortunate result of the latter, means that there will be some retail sectors that will become purely online businesses and the knock-on effect of this will show across high streets all over the world.

By JT’s Head of UK Sales, Jim Bennett