This year the annual “Big Retail” show organized by NRF was buzzing, with attendance up almost 10% year over year according to Matthew Shay, President and CEO at National Retail Federation. Energy was positive and there was little talk about the retail apocalypse that overshadowed the year before. Retailers, brands and technology companies alike instead had optimism and excitement around the retail store transformation that’s underway and customer experience was at the pinnacle of the conversation.
Legacy brands are working to modernize the store, digital natives are raising funds to expand their physical footprint, and measuring in-store engagement is taking a front seat in the ROI dialogue. Among the key trends prevalent was the growth of mobile and the importance of frictionless payments. According to recent reports, U.S. consumers waste an average of 118 hours per year waiting in line, with a large chunk of it spent standing in queues at stores, and there are an entourage of retail tech companies working to alleviate this problem. Retailers and brands are also recognizing that consumers are also at a point where click-and-go is no longer a novelty but an expectation. Mobile shopping eclipsed desktop with 48% of orders came from mobile compared to 44% from computer over the 2018 holiday season, according to the most recent Salesforce Shopping Index report, and that trend isn’t going to slow down.
When we think of experiential retail, we often gravitate to thinking and speaking about selfie moments and immersive technology like augmented and virtual reality. The ticketed “adventure store” has seen its heyday with the Museum of Ice Cream, Candytopia, Color Factory and more, and it has pushed brands and retailers to invest more heavily in design and in-store experiences. But consumer immersion hits a wall as soon as its met with friction, and oftentimes that friction is most heavily prevalent at the check-out experience.
Here are a few spotlights from this year’s convention:
The Grab and Go Fire Has Been Ignited
Since Amazon started rolling out their AmazonGo stores, we have seen dozens of companies release technologies to answer consumers expectation of faster check-out. Investments in Al algorithms, complemented by the advancements of sensor capabilities, intelligent cameras and edge computing, continue to bring down the cost of deployment in-store while increasing the robustness of these solutions making it more accessible to retailers.
Photo courtesy of Scandit
Fast growing start-up, Scandit showcased a fully comprehensive solution whereby they tap into consumers smart devices to serve as the stores cameras and via computer vision any barcode, text of the shelf and/or objects is read via the customer’s built-in camera/video feed. Customers can scan an entire shelf with their smartphone to quickly find an item from their shopping list or see personalized deals, additional product information, and reviews displayed over the items on the screen. Through their robust software technology stores can be more accurately stocked and re-stocked, and its powers a more fluid self-checkout experiences with a substantially smaller upfront investment that that of AmazonGo. A close comp, Zippin is also helping empower brands with scan-and-go technology via a patent-pending approach that uses Al, machine learning, vision cognition via overhead cameras much like Amazon and sensor fusion technology to eliminate checkout lines and self check-out scanners.
They estimate the payback period to a retailer using their solution is about 6-months as not only does their system add efficiency to purchase but since all inventory is tracked, both customers and retailers know exactly what item is on each shelf in real-time, providing retailers with timely out-of-stock alerts so they can better serve customers. Intel also featured autonomous check out in their booth with their partner Cloudpick who allows retailers to build staff-free stores by utilizing automated door access, weighing sensors, cameras and computer vision. They currently have 30 stores in China and Shanghai, costing an average of $2-4,000 per square meter and a month to get up and running according to the team.
Buy Online, Pick-Up In-Store
According to Ryan Yost, General Manager of Printer Solutions at Avery Dennison the buy online- pick up in-store demand is growing and product tags are being designed more intelligently to power efficient solutions. Rfid tags can now work with liquid products and aluminum; and some rfid are now microwave safe – serving the growing demand in the grocery sector. QR code adoption is really picking up since the newer smartphones can read them without required an app download, and many tags now integrate QR codes to enhance the informational aspect and rfid tags or nfc tags to allow brands to learn more about what information customers are looking for.
Photo from NRF
Chinese based retailer and tech giant, Alibaba showcased their Freshippo market run by robots, where customers were delivered their food for dine-in and bags to take out. Customers can “click and collect” or can order and have products delivered in 30 minutes or less within about 2 miles of their homes by simply using their app to complete payment via biometric facial recognition.
The grocery industry is seeing the most growth as groceries have grown fearful that Amazon will eat larger pieces of their market, but the more broadly available self-checkout becomes the sooner the expectation that it should be available all across industries such as footwear and apparel (as we have seen with the newest Nike stores) and beyond. It’s has been predicted that cashierless checkout systems will process more than $78 billion in transactions by 2022, up from $9.8 billion in 2017 while consumer interest and excitement for these solutions continues to grow.
Paying Via Installments Has A New Credit Line: Afterpay
A third area of excitement around check-out is the ability to break-down payments without tapping the credit card. Australian based Afterpay has flipped the script on credit by having the retailers pay a fee (4-6%) to offer Afterpay, which allows the consumers to shop via installments interest-free. Serving a core demographic that’s anti-debt, they been quickly expanding their offering in the United States for a user base whose average age is 33 partnering with brands like Revolve, Urban Outfitters and Anthropologie.
According to Nick Molnar, Co-Founder & CEO who has built quite the marketplace of their own in their native app “we have some of our biggest retailers who have seen better direct sales generated from an Afterpay launch their email than their regular sale emails”. And a focus on making payments accessible can show substantial ROI he further explains “when retailers are considering Afterpay, a key component of the value proposition is to maximize driving full price sales rather than relying on a discounted campaign” which they have proven to be the case as their customers are reportedly spending more per transaction and returning to shop with more frequency.
The role of payments in an omnichannel environment, whether customers want to buy something online and return in-store, or buy in one location and pick up at another.
“People realizing stores are their strength, not their baggage” says Nitin Mangtani of Predict Spring whose company helps companies modernize the store into flagship experiences by offering point of sales, clienteling and bopis management capabilities in one holistic solution. The pressure of increased customer expectations at checkout such as more payment options, faster checkout and mobile wallet acceptance are driving retailers and brands to prioritize spend to create frictionless environments.
When a customer checks out with a brand, the relationships is only beginning when done right.