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When online retailing hit the market, the objective of retailers was to replicate the personal experience of their stores on the digital platform. But as technology has advanced, the opposite is now true and retailers are increasingly looking to introduce into their physical outlets the rich, frictionless experience that customers enjoy online.
Mike Dowson, commercial director at Trust Systems, says Covid-19 has further disrupted consumer behaviour and put the physical store under even greater pressure from e-commerce as shoppers have become increasingly comfortable with the online channel. There has therefore been a need for change, which is leading to the creation of new, more immersive roles for stores and to integrate them better into retailers’ overall digital strategies.
The most radical change brought about by technology is the cashier-free store. These have been pioneered by Amazon, but it has become an increasingly competitive field and various solutions have since entered the marketplace, with myriad retailers, including Marks & Spencer, Aldi, WH Smith and Tesco, testing the concept.
One solution in this area is MishiPay, which provides its Scan, Pay & Go self-checkout technology to retailers such as Flying Tiger and Muji. Shoppers scan a QR code when entering the store and then use their mobile device to scan the product barcodes before checking out on their device at the end of their visit.
Unlike systems that rely on computer vision and smart shelving, it requires very little cost to introduce, according to David Grenham, marketing director at MishiPay, who says: “Physical retail has been in need of a catch-up with the frictionless experience [enjoyed] online, where it is a very much autonomous journey, but you do miss out on the personal bit and being able to touch products and take them home.”
The MishiPay solution therefore does not seek to completely replace in-store staff and strip out all forms of interaction, but instead provides a complementary alternative to checkouts that encourages engagement with shoppers – through store staff as well as via their own device through an in-built recommendation engine that uses an algorithm and artificial intelligence (AI) to upsell items intelligently.
“It can identify pairs of items, so can recommend batteries with relevant products and handle ‘people who bought this, also purchased this’,” says Grenham. “It also enables item discovery as well as offers and promotions that helps retailers that have a surplus of items they want to move. Muji often uses this [functionality] when launching new products.”
The opportunity for promotional interactions in its cashier-less stores has not been lost on Amazon, which is investigating the selling of digital advertising via screens and other in-store assets such as smart shopping trolleys. This will be a much more data-rich proposition than has traditionally been seen with digital signage in stores.
Digital signage reimagined
Trust Systems is also very much involved with this reimagining of the digital signage proposition. “We have needed to shake it up, to make it relevant, and for it to operate in real time,” says Dowson, who is working in partnership with Samsung Electronics.
“We have the ability to get rid of the old content that is often found on digital screens – like Easter eggs being promoted at Christmas time! It’s been too much about old playlists and it confuses customers,” he says, adding that the retailer might have a batch of products that need to be promoted quickly and sold via markdowns, which can be efficiently pushed out to specific screens in certain locations in real time.
Dowson also highlights how digital signage solutions have the potential to incorporate facial recognition and utilise the data built up on a customer’s activity. He cites the traditional scenario where people like to be personally recognised by the owner when they enter an independent store and for them to be recommended relevant products based on the owner’s knowledge of them.
But to do this at scale across a large retail business requires data and digital technology, he says. “It’s the only way to give an immersive experience and promote relevant products. Retailers need to look at who is in-store [possibly using facial recognition] and promote to this grouping.”
Steve Powell, business development partner at Kyndryl, says the likes of facial recognition and cameras in-store are increasingly utilising the power of AI and machine learning to spot patterns and make decisions more efficiently than humans. One system that uses AI and facial recognition is being trialled by Asda and involves a camera within the self-checkout terminals that can verify a customer’s age when buying alcohol.
Glenn Edwards, Leon Restaurants
Unlike within the manufacturing industry, Powell does not believe that AI in retail will lead to robotics and automation that reduces the human element. This is certainly the thinking at Leon Restaurants, which is introducing kiosks to its premises with the main objective of improving the customer experience.
Glenn Edwards, managing director of Leon Restaurants, says: “The biggest benefit is the increased customer experience. With ever-changing diets and new legislation around allergens and calories, the use of kiosks puts the guest firmly in control of their dining experience, with all the information they need at hand.”
The company has worked with Vita Mojo and Centegra to create the total infrastructure involving aligning the customer kiosks with its kitchen management system, point of sale, customer relationship management (CRM) platforms, and stock and labour scheduling.
“Over 80% of the restaurants are now fully kiosk-live and we will be completing the estate roll-out in the coming weeks, along with our new restaurants around the country going straight online,” says Edwards. “In restaurants that are now fully live with kiosks, over 85% of transactions are now processed through them.”
An additional benefit of the kiosks is the data they generate, which will help with menu development based on customer habits and needs, says Edwards. “We’re on a mission to put the data into the hands of the restaurant managers, enabling them to make smart decisions improving the guest experience. All our systems report into BI [business intelligence] dashboards for real-time reporting, allowing for localised decision-making in the moment.”
Tablets in bike showrooms
Rather than use kiosks, Ribble Cycles has instead introduced Android tablet devices into its six showrooms and positioned them next to each of its bike models. Matthew Lawson, chief digital officer at Ribble Cycles, says: “The showrooms are designed as an extension of our digital presence and we use the space for customers to continue their shopping journey as a rich experience.”
The tablets dynamically pull the relevant bike information from the Ribble website, which is determined by their location in the store. Because the information is sourced from a central repository, which feeds into all the company’s touchpoints and channels, any changes only have to be made once and they spread across the portfolio. “It means everything is consistent and takes a task away from the team in-store,” says Lawson.
The tills and website are also run from this single back-end infrastructure, which ensures there is one view of the customer. This enables the customer to log into the website and continue their shopping journey, which they might have started in-store, and to checkout seamlessly.
This cross-channel journey is further enhanced by “Ribble Live”, which involves technology from GoInStore that links customers on the website with a specialist in-store via video connectivity. “Not everyone can get to our showrooms and people often have a single question they want to ask a person before they commit to a purchase,” says Lawson. “This leverages the capital investment in the showrooms.”
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Such is the power of this live video interaction that it generates 10 times the conversion rate of a pure online customer and the average order value is 40% higher. “It humanises the digital process,” Lawson adds.
The final piece of the in-store technology proposition in Ribble Cycles stores is the digital screens that will soon enable customers to press “play” on the tablet devices and trigger video images of the relevant bike onto the large screens. Again, this content can be managed from the CRM system at head office.
Because all Ribble cycles are built to specific customer requirements, and it only sells its products direct to customers, the finished products are either collected from a store at a future date or delivered to the customer’s home. This requires management of the fulfilment process, but it does not involve high volumes that would cause Ribble any headaches.
For other companies, especially supermarkets where speed of delivery for online orders is an important factor, this can mean serious trouble. Colin Coggins, chief commercial officer at Fabric, which works with the likes of FreshDirect, Instacart and Super Pharm in the US, says the ideal solution for such retailers is micro-fulfilment centres (MFCs). These semi-automated warehouses can be integrated into existing stores, which are invariably situated close to customers.
Colin Coggins, Fabric
“Our MFCs are located in close proximity to the end consumer, enabling fast delivery,” says Coggins. “They achieve impressive throughput and efficiencies through dense product storage and software-led robotics to accelerate order processing, item retrieval, picking and packing. Humans and robots are able to work together within our MFCs towards a more efficient, profitable and sustainable approach to order fulfilment and delivery.”
They can achieve a 200% increase in the number of items dealt with each day compared with a traditional fulfilment centre and only require about half the space, with a footprint as small as 10,000 square feet.
Coggins adds: “Retailers understand that in order to meet changing customer expectations for faster deliveries, they need their fulfilment operations much closer to their customers, and in order to do that profitably, automation is critical. Micro-fulfilment will become the standard that brings the combination of customer proximity and automation to enable retailers to scale their e-commerce businesses quickly.”
Such solutions highlight how much more advanced the digital space has become since the early days of online shopping and how the physical space can play an integral role in the overall shopping journey – but only when the relevant technology is implemented.