Posted by Bojana Lazarevska on 13 Aug, 2019
Retail is one of the most highly-disrupted industries, and perhaps a sector that feels most of the pressure from an increasingly digital society.
With more choice and access to information than ever before, customers are in the driver’s seat when it comes to their relationships with brands. A Salesforce report stated that 67% of consumers said their standards for good experiences have increased, while 80% said the experiences a company provides are as important as its products and services.
So, how can retailers keep up with the changing demands of consumers? Technology is at the forefront of this solution, which is why we’re increasingly seeing big-name brands, such as Walmart, Amazon, and Zara, adopt new technologies and blur the lines between physical, in-store experiences and digital ones. We dug deep to see which of these retailers are succeeding.
Walmart Enhances Retail Experiences with Tech
Retail disruption doesn’t necessarily mean a brand needs to become solely digital or move online – it’s about creating a multi-touch experience that embraces technology to enhance in-store experiences.
Walmart is one retailer doing it right. Over the last few years, Walmart has taken big steps in changing how its customers shop by introducing several innovations in-store and online, and sometimes blurring the two. Some of its new experiences include:
- The retailer’s grocery pick-up and grocery delivery options combine the convenience of online shopping with the ease of never having to leave the car or house.
- Its Check-Out-With-Me service allows customers to skip the dreaded checkout line and pay through cellular and Bluetooth devices carried by sales assistants, anywhere on the sales floor.
- The Dotcom Store app ensures that sales assistants can meet customers’ expectations, even if the physical store is out of a certain product, by accessing online stores through the app to search and order the required item.
Since introducing these (among other innovations), Walmart has not only made the shopping experience quicker and much more convenient for customers, but the retailer also reported its strongest quarterly growth in 10 years. This includes seeing a 4.5% growth in same-store sales and a 40% increase in online sales in 2018.
The Power of Amazon Go
Amazon made big headlines when it opened its grocery pop-up, Amazon Go. With Go, the retailer has reinvented how physical stores operate and has created a unique, frictionless shopping experience for consumers.
Unlike traditional shops, these pop-up stores don’t include registers or checkout lines – so it retains this aspect of an online shopping experience. However, consumers can shop in a physical space, choose their products, collect them, and leave, all without having to queue in a line to pay.
The store works by running high-level surveillance of those who enter it, using tech similar to that found in self-driving cars. Shoplifting is taken care of through technology that senses when products are taken or returned to shelves, keeping track of this in the shopper’s virtual cart. It’s certainly an impressive experience for shoppers.
This tactic is clearly working; Amazon has stated its ambitions to open 3000 stores by 2021, a huge jump from the 13 stores it currently has in 2019. The company is well on the way to taking over the retail industry. Its success has also prompted several copycats.
Standard Cognition, an AI-powered checkout startup, is raising $35 million in funding for similar tech, in the hopes of competing with the retail giant. Big brands, like Microsoft and even 7-11, are also testing technology similar to Go.
Daryn Nakhuda, Mighty AI chief executive, said Amazon Go has showed “how far you can go”.
The good news is that this has sparked a huge market for technology firms to capitalize on. Emerging tech like this is helping to create a unique and improved shopping experience for consumers.
The bad news is, tech has the potential to turn from innovative and convenient, to gimmicky, expensive, and slow to roll out. It’s important that retailers don’t get sidetracked from the real purpose behind new tech advancements; which is to create functional tech that improves the shopping experience, rather than flashy tech that distracts from it. Sometimes, the simple approach is best.
Experiential Retail with Zara
Fashion retail giant, Zara, has pulled out all the stops to compete with online retailers. Zara has always been known for having a very customer-centric approach, and the tech introduced in its stores reflects this.
Zara spokesperson, Jesus Echevarria Hernandez, has said:
We still want customers to interact with our physical stores.
This has urged the retailer to think creatively about how to entice customers inside its stores and improve their experience by creating a more efficient way to shop.
At one of Zara’s flagship stores, the retailer armed shop assistants with iPads to help customers order products in their size (if they’re unavailable in-store), and pick them up at a convenient time. Self-scan checkouts allow shoppers to pay with mobile phones or credit cards, without needing to interact with members of staff (unless they want to).
“Customers don’t differentiate between ordering online or in a store,” said Hernandez. “You need to facilitate that as best as you can.”
In order to boost efficiency in its stores, Zara included online-order collection points that are fully-automated, with shoppers receiving garments after simply scanning a receipt. The entire shopping journey has become more streamlined for its consumers.
Shoppers aren’t the only ones who benefit, however. A process that used to take Zara three days to complete, checking its stock inventory, can now be done in two hours by fitting every garment with a radio-frequency identification tag.
The risks have certainly paid off, with Zara being one of the most profitable, fast-fashion retailers around. When the brand refurbishes stores, its sales and profit margin pays off its investment in two years or less.
While stores without checkouts, experiential retail, and enhanced in-store experiences may still feel like a novelty, we’re well on the way to seeing technological experimentation become more and more common in brick-and-mortar stores that wish to remain relevant in an increasingly digital world.
It’s not just about implementing tech for the sake of it, however. It’s important to think about how it will impact your consumers and ensure that it will enhance their retail experience, rather than distract from it.
Walmart’s, Amazon GO’s, and Zara’s consumer-first technological solutions keep the buyer’s journey front-of-mind. This makes it easier for customers to shop and, more importantly, retailers increase their sales for a greater return on investment.
If you’re considering implementing digital solutions in your business, then we can help. At Future Platforms, we’ve created a framework to analyse your unique business goals and users’ needs to create the ideal solution that delivers value.
Stay ahead of the competition and disrupt the retail landscape by getting in touch with us today.
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