Reinventing retail

The total acceptance of e-commerce and the access to both retailer’s websites and detailed product information via mobile devices have created an empowered and knowledgeable consumer that is driving great change in the way they interact with retailers.

This will certainly have a massive affect on the in-store experience to the extent that Conlumino research has found that technology is predicted to be used by 23.6 per cent of customers in shops by the end of 2014 (up from 3.9 per cent in 2011), which will generate sales of almost £1 billion (versus £49 million
in 2011).

Richard Goodall, group sales and marketing director at PCMS Group, says: “There is a new engagement model emerging between retailers and consumers, with different service level expectations and views on promotions. There is also a huge increase in the number of interactions taking place – at times when the customer wants them.”

He believes this will prompt a ‘huge’ investment in EFT solutions, especially with the emergence of electronic wallets, PayPal, Google Pay and Square, which are leading to retailers implementing more than one PoS solution. “Five years ago no retailer would have had more than one EFT solution but today you’ve fixed EPoS, tablets/smart-phones hosting transactional websites, and mobile PoS,” notes Goodall. He adds that the development of new options has led some US retailers to consider having no fixed PoS at all and Burberry has ordered 3,000 iPads for use in-store.

With iPads at a third of the cost of fixed tills Goodall says that for certain product categories the fixed PoS will be only part of the broad mix. It might well also be the case for self-service PoS units although Gopal Kutwaroo, senior marketing director for Europe at NCR, suggests that whereas the footprint of the devices can only go so small there is great potential to add value to self-service devices by making the customer experience more personal. Offers and promotions could be pushed to shoppers – determined by their personal details and their preferences based on transaction histories – which could be linked to retailers’ customer databases. He warns that such interactions will bring in the need for ‘filter management’, which will undoubtedly be a big issue in the future.

Also recognising the growing power of personalisation in a promotional sense is Anke Puscher, director of business development in Europe for Valassis, who explains: “Retailers need to reinvent how they keep shoppers engaged through personalised offers based on behavioural characteristics. This enables retailers to provide the right offer at the right time and at the right place, thereby increasing customer loyalty.”

This will include the likes of digital coupons: “E-commerce is impacting on retailers by changing the way their customers access and redeem coupons and retailers need to adapt by ensuring for instance that coupons can be redeemed online as well as in store.” This linking of channels is one way to dramatically improve customer interactions but at present it is a great failing of retailers, with Goodall suggesting: “No retailers have cross-channel promotion capability.”

Alan Morris, co-founder and executive chairman of Retail Assist, agrees this is a problem: “If we are to provide a true omni-channel experience for customers then what is available for one channel to market must be available for all. Although I have seen solutions showcased, which will bring previously exclusive on-line facilities to the store environment, I have yet to see such technology deployed in a live store environment.”

For Sarah Kellett, associate director at Fujitsu, this highlights how retailers “will have to make sure they re-organise the behind the scenes [infrastructure] in order to make interactions seamless [across channels]”. She adds: “You can have the technology and the [relevant] view of the customer but if you’ve not got the logistics and the infrastructure in place then the investments retailers make will not achieve their full potential.”

This would be disappointing because there is much to be excited about. For one thing, she predicts that ‘boring’ commodity goods will be bought very differently in the future and cites the trend in Germany when buying an intelligent washing machine. Part of the package can involve being sent batches of washing powder at the required time as the merchant knows exactly how many washes have been done. Advances in technology and improved connectivity might also see a re-visit of the ‘intelligent fridge’ that Morris recalls seeing in 2004 at IBM’s Innovation Centre in La Gaude. “It was presented as self-replenishing, so each time an item was used it was automatically re-ordered from the supermarket and delivered to home. While it hasn’t found its way into our homes, a lot of the logic and the process behind it is now commonplace,” he suggested. Another point of customer interaction that he says has yet to be properly exploited is TV. By using something similar to the ‘Red Button’ he believes the TV’s internet-ready capabilities can be utilised to enable consumers to buy whatever their favourite star has just been wearing, using or eating.

With this shift away from stores there is an increasing need for a more interesting experience in-store, with Morris highlighting the introduction of ‘Magic Mirrors’ and ‘Smart Changing Rooms’ by some retailers as setting the pace. “They have not only wowed customers and added to the theatre of the shopping experience but they have also been credited by some with having driven better incremental sales by maximising up-selling opportunities,” he says.

Kellett agrees: “We’re social animals so the shopping experience needs to be more interesting, with the testing of products and the use of augmented (AR) reality to see how goods would look in your home.”

She says AR is already being used effectively in Japan within the cosmetics departments as consumers find using testers ‘abhorrent’ so technology is used to take a picture of their face and then the cosmetics are applied virtually to their image.
Another trend that will affect interactions in-store is ethical retailing. “Customers want to know more about the provenance of what they are spending their money on. The buying office has had this information but it has not been available to customers or staff on the shop floor. But this could be addressed with shelf-edge labels,” suggests Fujitsu’s Kellett. The solution could involve technology from the likes of ZBD whose products, she says, can display PowerPoint-quality presentations on the labels or alternatively consumers could use their smart-phones to photograph a product and this then takes them to the relevant information online.

Helping the distribution of such information, and potentially enabling personalised interactions in-store, is Wi-Fi, which Kellett believes is a good idea, but she has some doubts about its implementation in the UK by many major retailers.

“They seem not sure quite what to do with it. And it might not be fast enough to match retailers and customers aspirations. In Seoul (South Korea) it is 20 to 50-times faster than in the UK and that’s why it’s has had a massive take-up,” she says.

While retailers investigate the latest technologies to improve their interactions with customers PCMS’ Goodall believes one very effective tool could be the widely over-looked old-school call centre.

“Being able to pick up the phone gives customers confidence when buying online and it provides a focal point for after-sales service, which keeps the interactions going after the product has been delivered,” suggests Goodall.

There is an argument that a good contact centre – when utilising the likes of ‘live chat’ – could help increase online conversion from a typical two per cent to nearer five per cent especially if the call centre personnel are empowered to offer customers deals or added benefits like discounted warranties.

This highlights that the future of retail technology is not just going to include the most futuristic implementations of cutting edge solutions like AR but will also involve some of the existing elements such as call centres – where their capabilities have been enhanced by utilising the latest communications technologies.

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