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Will “Smart Stores” Revolutionize Brick-And-Mortar Retail?

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Matt Wujciak
08/05/2020

smart store

It’s no secret that commerce is shifting towards a digital environment. Many studies have indicated a 50-70% year-over-year growth rate in e-commerce during different periods of the pandemic, as consumers stayed home but continued to shop. It almost goes without saying at this point that many new purchasing habits and consumer behavior trends (such as e-commerce surges and brick-and-mortar struggles) will continue after the pandemic. Simply put, more consumers are comfortable with online shopping.

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However, while many analysts, futurists, and social media influencers that dominate the news today are predicting the eradication of seemingly anything in-person and slapping a “new normal” tag on it, it’s important to take a step back and realize that the life we are living right now is not permanent. 

Brick-and-mortar retail is undoubtedly declining but it’s not necessarily the beginning of the end for in-person customer experiences, especially for industries such as luxury shopping (i.e. jewelry), entertainment (i.e. live events), or anything else that is dependent upon live experiential marketing, social factors, or the practicality that many brick-and-mortar retailers can provide - if they know how to go about it that is. 

The evolution of in-store automation

Many retailers are filing for bankruptcy. However, this is largely because they were already falling behind. The pandemic has been the nail in the coffin for many, expediting trends and outcomes by both consumers and brands. 

Simultaneously, the pandemic is also providing brands an opportunity to stand out and differentiate from competitors as technological innovation is evolving at an exponential rate. 

As WSJ and NYT bestselling author and CX and customer service influencer, Shep Hyken, recently told me:

“The adoption or adaption of existing technologies, depending upon how you look at it was thrown three to five years in the future… We would have gotten around to a lot of what we’re using now that we didn’t use much of before at the level we’re using now but it might not have been for another few years so we’re moving at high speed.” 

Consumers have always wanted shopping to be frictionless, convenient, and enjoyable. In today’s changing environment, they also want it to be safe. Innovative advancements, more specifically, automation provide value to the consumer by checking these boxes. We see and hear about it in a remote environment, but it can also apply to in-person experiences, especially through the evolution of smart stores.

Imagine, for example, a shopping experience that allows the customer to avoid touching surfaces in-store, but still enables them to get the product information and help they need from a live in-store employee. Perhaps they can even check out using their mobile device, voice interfaces, or other automation technologies, while still getting the (safe) inclusive, and social element of in-store shopping that many consumers are longing for. 

By taking advantage of these new automation tools, retailers can make their stores more efficient, interactive and engaging — with the ultimate goal of providing the most memorable customer experience possible.

And it goes without saying that a more rewarding shopping experience leads to more revenue. According to Capgemini’s recent study on smart stores, consumers reported that they're likely to spend as much as 21 percent more time in stores that have compelling automation functionality. The research also shows that 62 percent of consumers expect to increase their use of touchless interfaces in these smart stores. 

Of course, with any new technology that changes our behavior comes skepticism as a result of unfamiliarity. When self-checkout was first introduced for grocery and general merchandise stores over a decade ago, many consumers initially weren’t too keen on the change then. 

The unfamiliarity/skepticism of laggards and late majority consumers was understandable: the systems were often plagued by technical hiccups that caused customer friction. 

Many consumers even saw it as a lower level of service when compared to interacting with a live person. In fact, 63 percent of consumers feel retailers implement automation technologies only to cut costs rather than to improve the shopping experience, exemplifying the must-have of brand education (i.e. a knowledge base on the website or an employee in the store to help customers help themselves). 

Convenience, delight, and safety

Retailers have been experimenting with contactless shopping years before the pandemic to improve efficiency for the customer and the brand. Now, the advancements of technologies as Shep eluded to have been expedited. For example, Amazon's new smart shopping cart, called Amazon Dash Cart, automatically detects items with sensors, cameras and computer vision algorithms. It allows customers to skip the checkout line in a physical store by charging the credit cards attached to their Amazon accounts.

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The Amazon Dash Cart is designed for small shopping trips with room for two bags. The cart has a touchscreen that allows customers to access Alexa shopping lists and a scanner for coupons. The technology will be available at Amazon's Woodland Hills, California, grocery store in the future.

"When the cart is available, there will be a QR code in the Amazon app that will enable you to easily sign in and begin using the cart. After that, you’ll just place your bags in the cart and start shopping. When you’re done shopping, you’ll simply exit through the store’s Amazon Dash Cart lane, and your receipt will be emailed to you," Amazon shared.

Understanding where touch occurs along the shopping journey and replacing it with touch-free options will be key in the near future — from pulling up product information on a smartphone (reducing the need to handle products); to apps that alert associates of customer queries; to payment through an app; even robotics that bring items out to customers, as Amazon has been known for. In warehouses, Walmart and Kroger have also been exploring automation and robotics for some time, which can further reduce human contact.

In the emerging era of smart stores, augmented reality (AR) can also bring a sense of discovery and play to the in-person store experience, while enabling the customer’s safety. AR wayfinding in stores can direct consumers to items as quickly as possible, while serving up savings opportunities as they shop.

Try-on technology for cosmetics, jewelry and apparel can cut down on browsing time, while also helping consumers discover new products. In showroom environments, sales associates or even automated robots can source items safely from the back of the store. Simply put, automated tools connected to a customer’s profile or a brand's inventory can enable smart recommendations and efficient processes, getting the shopper to the right products faster, while creating personalized customer experiences, enhancing value for everyone involved.

This is a time when the world is vulnerable, where every person and organization is adapting to life with a live virus in their midst, where no one is operating from a best-in-class pandemic playbook to survive modern financial Darwinism. Brands, including marketers and customer service departments must become the very people they’re trying to reach. This means that among innovation, compliance, time and technology, humanity must become the greatest application. 

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For media coverage, lead gen, and digital marketing inquiries, (or to say hi), contact me at matt.wujciak@customermanagementpractice.com, or connect with me on Linkedin at Matt Wujciak. And remember, identifying consumer behaviors before they become trends is how brands deliver competitive customer experiences.

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