Fantastic opportunities are available with Retail Tech. To reduce costs, improve the customer experience and increase revenue. But not every technical application leads to overflowing cash registers. After a period of extensive experimentation, we’ve slowly pinpointed the things that determine success. Our cautious conclusion? They key is not the quality or the ingenuity of the technology, but consumer behavior. And with that insight, Retail Tech can now finally reach full maturity.
Has anyone seen the iBeacons?
Remember the iBeacon hype? A few years ago, trendwatchers predicted that those tiny location beacons would turn the retail world upside down, in a positive way. The beacons would be able to communicate with store visitors’ smartphones, who in turn could look forward to personalized offers, recipes and walking routes. Many tech-savvy retailers could practically hear the cash register ringing.
But in 2019, nobody is talking about iBeacons anymore. What happened? Of course, the fact that major tech companies did not continue to develop this technology certainly plays a role. And privacy legislation also threw a monkey wrench in the works. But something else was uncovered: consumers aren’t inclined to intensively use their smartphones while shopping.
Failure is part of experimentation
It’s no surprise that every single technology developed isn’t adopted. We’re in the middle of an experimental age: everyone is looking for ways to effectively use new technological possibilities. And experiments sometimes fail. But that doesn’t matter, as long as we learn from those failures.
Help or hinder
In the meantime, we’ve learned an important lesson. Applications only really work if they fit with a user’s natural behavior. For example, people usually have a fixed route that they walk in a supermarket. They therefore don’t need an ‘ideal’ walking route. Moreover, they know how to find their favorite products flawlessly, and they often already have an idea of what they want to buy. A supermarket app – whether controlled by iBeacons or not – can actually make this tried-and-true customer journey unnecessarily complicated. Downloading the app, opening it on arrival and keeping it close at hand adds no value for most consumers. It’s therefore understandable that the adoption of supermarket apps is still a bit disappointing.
Tech needs to add, not subtract
It’s important for retailers to focus on applications that are in line with existing behavioral patterns. Because no matter how ‘disruptive’ a technology is, it shouldn’t disrupt the user’s actions. For instance, LED screens on shelves seem to be making a difference. Customers only see what is on them when they’re already busy grabbing an item off the shelf. When they move to a product, letting them know that the product next to it is on sale will help them quickly opt for your promotion – and they don’t have to do anything extra to reap the benefits.
Gaining efficiency in the back room
Of course, there are also opportunities to increase profitability behind the scenes. In places where difficult-to-control consumer behavior doesn’t play a role. Take costly, repetitive actions that can be robotized to save costs. Walmart’s Alphabot is one great example. This robot takes care of order picking for the ‘click and collect’ service. So there’s no need for round-the-clock shifts of workers putting online orders into boxes. The Alphabot works tirelessly, 24 hours a day.
The demise of shelf-stockers?
Some retailers are even trying to bring robots to the front of the store. After all, plenty of repetitive – and therefore automatable – work takes place there, too. Stocking shelves, scanning products and payments, just to name a few. In an Ahold-Delhaize supermarket in Tennessee, Marty the robot keeps track of inventory and keeps the floors clean and free of debris. Marty’s success varies, though: sometimes, he can’t get his work done because of all of the staring customers. And most retailers know about Amazon Go’s introduction of ‘just walk out’ shopping, with which people can do their shopping with practically zero human interaction.
The benefits of balance
Retailers may wonder whether it’s smart to go ‘all the way’ with robotization in the store. You can focus on efficiency in the back of the store, but other factors are important in the front of the store. What happens, for example, with the community function of a supermarket when you set up scan robots and computerized checkout stations? The quick chat at the checkout becomes a thing of the past.
Thankfully, Retail Tech doesn’t have to be an all-or-nothing proposition. Dutch retailer Jumbo Supermarkets proves this with the introduction of the ‘chat checkout’ line: a checkout for customers who’d like a little conversation while the cashier rings up their order. The store can therefore continue to develop efficient and techy innovations, without losing the social function of the store. In fact, the store becomes even more social, since the Retail Tech ensures that staff is no longer hindered by the necessary, repetitive chores they had before.
Retail Tech: make it happen, but make a plan
Now that Retail Tech is slowly transitioning from its experimental phase into a maturity phase, it’s time to get busy creating policies and plans. That starts with considering where technology can offer viable solutions, when you should simply let customers get on with things in their own way, and when you need actual employees to lend a hand. In this way, retailers can develop an effective mix of tech and non-tech solutions. And that – hopefully – will indeed lead to very active cash registers.
This article is published in Dutch on Retailtrends.nl.