The future of retail technology –a magical theatre of convenience and personal touches
By Mel Taylor, CEO at Omnico Group
UK retail is undergoing major change with technology now essential to meeting consumers’ heightened expectations.
Regardless of how they shop, whether they are online, in-store or visiting a shopping mall, consumers increasingly expect to enjoy a combination of theatre, convenience and personalisation from the experience.
Admittedly, the influence of these individual factors may vary according to the nature of the customer journey. For example, shoppers who are pressed for time will certainly want a fast experience when they are doing their grocery shopping (74 per cent say this in the Omnico Retail Gap Barometer of September 2016), whereas less stressed shoppers buying a wedding outfit or expensive camera want to be entertained and engaged.
Whatever the journey, retailers need to acknowledge that the more theatre, convenience and personalisation they provide, the more successful they will be. In the process they will benefit from greater loyalty among their customer base.
Signposts to the Future
The technology to provide theatre, convenience and personalisation is evolving quickly. The likes of IBM, Google, Apple, Amazon and others are investing eye-watering sums into R&D, particularly into voice-activated applications, chat-bots, and the Internet of Things. Although prediction is a dangerous pastime and retail is an industry with more gurus than a magic carpet convention, we can nonetheless examine the technologies already being used in retail today that are going to be at the forefront of change over the coming years.
Voice-activation is one these technologies, for which the future holds much wider application. Waitrose, for example, started piloting hiku in 2015, giving customers the ability to use a small, very user-friendly, voice-activated device to create a shopping list that is synched to smartphones, ready for use online or in-store.
Amazon’s latest launch of virtual assistant Echo is another pointer to the future. It recently announced the speakers would be coming to the UK, Germany and Austria after being introduced initially in the US market. The machines can answer questions, control other internet-connected devices, build shopping lists and link in to dozens of third-party services including Spotify, Uber and BBC News. Some have estimated that between 1.6 million and five million of the speakers have been sold between November 2014 and June 2016. While promising a revolution in the future of the smart home, some, however, have claimed that the speakers’ lack of a screen will leave owners with an incomplete experience.
First Direct, meanwhile, is to enable its customers to use voice-recognition technology to access their telephone banking accounts without passwords. Indeed the conjunction of voice technology and the Internet of Things is inexorably leading to the proverbial “Siri on steroids”. Apple, for instance, has applied for patents for a smart dock that is always listening for spoken commands and has the ability to integrate with domestic electronic devices.
Whichever tech innovator it is, we are likely to see the growth of such personal digital assistants that know all about their owner and are capable of undertaking tasks automatically. They will know, for instance, when car insurance is up for renewal, automatically contact insurance companies and comparison websites and then update their owner on the options, before purchasing the right cover, at the right price.
Embedded in a kitchen device or sitting on a work-top, this technology is likely to take care of a grocery shopping list, find out the cost from stores nearby, order them from the cheapest and automatically arrange home delivery to match the owner’s diary. This is convenience and personalisation on a large, everyday scale.
Vehicle manufacturers are moving on with this technology too in the connected car, enabling drivers to order by voice before they arrive at their destination. This is going to drive service levels in areas as diverse as quick-service restaurants or tool-hire, where customers will no longer be prepared to wait at counters.
Drones for retail emergencies
Despite the excitement generated by Amazon’s recent partnership with UK government to test delivery drones, however, these airborne devices are unlikely to increase convenience hugely in the near future. The logistical and safety problems with drones are very challenging and the service they provide would have to surpass the growing convenience of click-and-collect and current returns policies. It may be that the future for drones is in distressed purchases where a half-hour deadline has to be met.
Generating in-store excitement
Drones may have a role to play in generating a sense of occasion (the arrival of one of these devices at a front door with a box of chocolates may be theatrical for an apologetic partner), but we can also see how clever retailers with a desire for authenticity do not have to rely on technology to excite and entertain customers.
Mercato Metropolitano, for example, has opened a large, multi-faceted delicatessen in a former light industrial unit at Elephant and Castle in London. This has been transformed into a destination where customers are engaged and delighted by the variety of produce and a commitment to excellence, rather than through obvious displays of digital technology. It is nonetheless, a business with global ambitions.
A different approach is to be found in Rose, the German bicycle retailer. Consumers can enter its 6,000 sq m flagship store in Bocholt and build a virtual bike on a screen with the help of an expert member of staff. The bike is then assembled behind the scenes while the customer has a coffee, purchases vital accessories or tries out their riding position inside a dramatic in-store wind tunnel.
The convenience is in not having to wait two weeks for the bike, the personalisation is in the amount of choice available, while the theatricality is in the store’s cleverly-designed layout and devices.
New customer journey technology is required
These new technologies and approaches are resulting in retailers launching exciting and innovative customer journeys. However, success will not rely on something as simple as having a few new apps to use. To maximise the convenience, personalisation, and theatre of the shopping experience, journeys need a myriad of system and technology connections.
To create the journeys of the future, retailers need to implement new technology tools that will enable them to design and visualise these journeys, and securely connect all the technology components to ensure the experience flows seamlessly across touch-points. A small number of technology companies are working on these enabling tools.
Retailers entering the new world of voice-related technology, fast and easy fulfilment and in-store theatricality, will need these tools to orchestrate the customer journey so that they can always meet the customer’s requirements. Because whatever the technology or touch-point, the customers are king and queen.