From Now to Next-Gen Retail
AI, VR, IoT — Profitable or Pointless?
The future of retail can seem daunting as new technologies emerge — which tools are momentary fads, and which investments will help grow businesses? This guide outlines current technologies retailers should be using, optional solutions for some specific businesses, and how to get ready for next-gen marketplaces, including the impact of 5G on wireless retail. While there are many challenges with new practices and technologies, they present an opportunity for success.
Before looking ahead at the incoming conveniences for future stores, there are many cutting-edge solutions businesses are using or should be using right now. These are considered must-have technologies stores need to keep up with current retail trends:
Customers expect a seamless in-store experience, during which they can find the exact products they want, whether they are in-stock or not. They also anticipate a trip to a physical store will be consistent with a business’ online brand. Having an omnichannel business environment is the solution. This means connecting all touchpoints to give customers dependable service online and in-person.
This smooth functionality allows shoppers to buy products online and pick them up in-store. Additional omnichannel features like endless aisle reduce the need to stock high value or unique items; instead, customers can use in-store displays to order those products for convenient delivery.
Other must-have omnichannel features include the ability to ship products from the store to customers as well as to other store locations. Omnichannel means having real-time inventory visibility, simplifying those delivery processes and other needs, like returns. Many retailers have difficulty returning items that were ordered online because they lack a central system that holds inventory, customer information, and purchase histories.
New POS Methods
More and more, customers expect better service or value than what they get from online retailers. This means instantly getting product information and reviews and not standing in line to make purchases. Mobile POS takes this a step further. It allows associates to be on the sales floor with handheld devices that showcase customer history and allows them to provide additional product information. Associates can walk customers through the store to find what they need, suggest add-ons, and complete the buying process.
Customers assume retailers will have complimentary WiFi access. This lets them research products, read reviews, check availability, compare pricing, etc. There has been fear that enabling customers to browse online with their mobile devices encourages price comparing for out-of-store online buying, but the opposite is true. In a 2015 report completed by IHL Group, 28% of retailers claimed they experienced a positive impact on customer loyalty as a result of offering instore Wi-Fi with an associated 2% increase in sales.
The days of pen-and-paper and spreadsheet management for employee workflows are over. Modern retail management systems include permissions-based access. This means employees can find only what they need to do their job well. Furthermore, scheduling, education and training, and even guided selling practices or customer follow-ups for sales associates can all be accessed and tracked with centralized task-management solutions.
Data from Retail Info Systems News shows the top workforce management technologies for investment in 2019 are: education and training, mobile workforce and/or HR applications, and labor scheduling.1
Price points must shift quickly to adapt to the market. Carriers frequently update pricing in response to technology or service changes; however, this can create inconsistencies across channels. It can be difficult for carriers and authorized retailers to manage and maintain these updates. Furthermore, customers want competitive deals from big-box stores and online retailers, and they expect the same at specialty stores. In other words, in-store systems must have adaptive tools, such as digital price tags, to optimize pricing strategies. These solutions free up time for sales associates, who don’t have to manually adjust prices and can then focus on serving customers.
More and more customers want to pay by credit card and wireless options including NFC. Offering chip and “tap” payment means faster transactions, leading to an increased potential for spontaneous accessory and add-on sales. Digital payments are also more secure and easier to track and reconcile.
1 29th Annual Retail Technology Study: Retail Accelerates, RIS, 2019
Some in-store solutions, while innovative, may not be vital for all businesses. However, retailers should examine these tools to see how they can make workflows more efficient, speed up sales, and drive growth:
Retail stores produce massive amounts of transactional and customer information, and that data can be captured and used to plan better processes. Retail management software can format this data to provide high-level, easyto-read charts and pinpoint problem areas. According to 2018 reporting by Forrester, many retailers refer to advanced analytics and data tools as the “foundation” or “source of truth” for everything else. 2
Kiosks and Digital Signage
Space management is always a challenge in brick-andmortar retail, and some businesses can make the most of their floor plan by implementing kiosks and digital signage. Kiosks can be used to educate customers on products and facilitate quick sales, helping them skip lines when they make spur-of-the-moment buys. Digital signage can also cut down on promotional clutter and roll out visual updates to keep up with new trends and products.
Radio Frequency Identification (RFID)
Many stores track their inventory using RFID technology, allowing staff to scan SKUs with handhelds. Newer systems can monitor products through their full lifecycle and even enable self-checkout options, meaning customers don’t need to go to a staffed till to pay for their goods. One innovative use of RFID can be seen at some Amazon Go stores. The company uses RFID for self-checkout.
One challenge of RFID becoming mainstream is not all manufacturers put RFID tags in each product. It can be expensive and logistically difficult to implement. So, retailers who are not also manufacturers — and instead carry multiple products from various manufacturers — will see an even bigger challenge in using RFID. That’s why the technology is optional and should be monitored as better systems become available.
Connected Shelves and Electronic Shelf Labels
Inventory management is made easier with the internet of things (IoT). As products are sold or rotated, smart shelves track these changes, inventory data is automatically updated, and electronic shelf labels can be set up to instantly roll out adjustments. This means no more manually printed shelf labels, and retailers can stay competitive with targeted sales that respond to market trends.
Virtual Reality (VR) / Augmented Reality (AR)
Setting up a store for virtual reality (VR) or augmented reality (AR) features is an interesting concept but may not be practical for all businesses today. Customers can interact with digital versions of products using handheld devices or with in-store displays that demo electronics. For instance, at AT&T flagship stores, customers can wear VR headsets and participate in a Game of Thrones-themed experience. Fashion and beauty brands have also begun using VR and AR to live demo the look of clothing and makeup products with interactive mirrors.
|You’ve got 99 problems and VR ain’t one. No matter what the technology is — make sure it serves a purpose and preferably resolves problems for customers during the retail experience.|
Advanced retail management solutions can use AI and machine learning to study buying trends, make personalized product recommendations, and streamline shipping and supply chain management. It’s no wonder a 2019 Retail Touchpoints study found “55% of retailers plan to leverage AI over the next three years.” 3
Same-Day and Next-Day Delivery
Retailers may be tempted to invest in same-day or next-day delivery, but careful cost-benefit analysis should be done before offering the service. Forrester has reported “sameday shipping may not have the conversion and retention impact that a retailer expects,” despite 54% of businesses showing interest in using it to compete with online and bigbox retailers. 4 That said, some high-value products, such as cellphones and other wireless devices, can justify offering rapid delivery.
Associate wearables can accomplish several things. Firstly, associates can wear or carry portable devices to count inventory and better assist customers with product information, rate plans, accessories, and more. Secondly, paired with omnichannel and cloud POS, wearables can also complete sales transactions without the need of a till. In the wireless industry, associates may also be more likely to recommend products they are wearing and using. Retailers are also experimenting with associates using wearables in the form of fitness trackers. Employee safety is important in any business, and especially in a space where staff are on the floor all day or receiving shipments. By tracking exertion levels, retailers can ensure no one is pushing themselves too hard, reducing potential insurance claims and liabilities.
More Payment Options
Online retail and social media have set up customer expectations for quick and easy payment transactions. Companies like Amazon have been experimenting with “just walk out” technology (as outlined above in the RFID section), allowing buyers to simply walk out of a retail store with their chosen items and have the purchase automatically completed through their wireless device. This function, while convenient, may not yet have practical market demand. 2018 data shows “60% of US online adults still prefer to check out with a store associate or a device provided by the store.” 5
That said, expanded credit card options, cellular payment, e-commerce and buying functionality through social media platforms, and tap technologies are becoming the norm. Payment experiences through Uber, Ready, Alexa, and Google Home are driving change in other markets, and that type of innovation is coming to retail. Customers will demand seamless interfaces between stores and the apps they use. Integrations from social media, such as Instagram, into payment systems and point-of-sale systems may soon be critical.
2 Trailblazers of The Top Five Retail Tech Trends, Forrester, 2018
3 Top Trends Driving Retail Growth: AI, Voice, & the Reimagined Store, Retail TouchPoints, 2019
4 The Top Retail Technology Investments In 2018, Forrester, 2018
5 The Top Retail Technology Investments In 2018, Forrester, 2018
A Future-Proof Retail Platform
The elements discussed so far set the groundwork for becoming a store of the future and keeping up with changing demands and retail innovations. Ultimately, an integrated POS and retail management system with a strong IT network are critical for making these tools work together. Getting the right core system allows businesses to scale across all store locations as future technology becomes commonplace and customer expectations continue to evolve.
The Near Future
So, what does the store of the future look like? While fantasies of flashy digital displays and minimal aesthetic designs might come to mind, the marketplace seems to be demanding more emphasis on offering unique customer experiences. Experiential retail or sensory retail are terms that describe the change from a product-focus to service culture. Retaining long-term customers now means hosting classes, events, and offering lifestyle benefits. And by “experiences,” this doesn’t mean implementing VR or AR functions and expecting new customers. Stores must deliver meaningful experiences.
How Do Businesses Create Experiential Retail?
Adding Services to the In-Store Experience
A practical way to create unique experiences is to give services that complement product offerings for target customers — the dog wash at the dog food store or free coffee at the appliance outlet. More and more, brick-and-mortar retailers are building lifestyles around their merchandise. For example, athletic wear retailer Lululemon now provides yoga classes, workout programming, health foods, and meditation.
Must Haves Wireless Services
If a customer breaks a phone, wireless businesses should position themselves as the ones to solve that problem. After all, that’s likely where the customer got the device in the first place. By allowing the customer to come back to the store, associates can offer multiple options — repair the device or trade it in and upgrade. Customers don’t have that option at repair-only shops. In order to facilitate repair service, in-store and online technologies such as appointment scheduling and inventory management tools should be integrated into a store’s POS or labor management system.
Businesses can integrate themselves into communities by offering special initiatives such as educational classes, networking, and charitable events. Devices change quickly, so educating customers is increasingly important. Retailers can host events as new devices are launched or announced.
With charitable events, retailers should find causes that resonate with their brand and the local community. These events can help foster a positive brand reputation and showcase the in-store experience. Service-oriented organizations have the potential to win the hearts and minds of future generations.
What Wireless Businesses Can Do Today
Evolve From Omnichannel to Unified Commerce
Omnichannel has been a way for retailers to provide seamless customer service across all touchpoints, whether online or in-store. Unified commerce is the next step. It brings data from all business platforms into a single repository, tracks consumer insights, and helps offer services to customers during each interaction. In a 2016 survey of executives, Boston Retail Partners said “81% of retailers plan to have unified commerce within three years,” meaning the switch is already happening.
Unified commerce capabilities can also pinpoint frequent shoppers and administrate loyalty programs. Loyalty programs contribute to the overall brand and lifestyle experience more and more retailers aspire to offer.
A unified commerce strategy bridges the customer’s experience with a brand; it also connects carriers and authorized retailers. With unified commerce, carriers can offer omnichannel solutions across all touchpoints, ensuring price control, streamlined product details and specifications, inventory management, and consistent promotions at all stores. Additionally, unified commerce gives authorized retailers streamlined access to rate plans and media services, and it allows them to reconcile carrier rebates.
Businesses should audit their customer data collection points to improve marketing and personalization, online and offline. This audit must account for consumer privacy, as many shoppers are concerned about their personal information. Not only that, but data regulations will continue to become more rigorous as markets adapt to a more connected world.
That said, finding the right balance is possible. 79% of Deloitte Insights survey respondents in 2017 agreed that “they would be willing to share their data if there was a clear benefit for them.” Customers expect brands to understand and even anticipate their needs.
Personalized services based on data collection start online and follow customers into the store. Online log-in recognition, visual product recommendations based on the customer’s history, contextual marketing that predicts a shopper’s end goals, and behavioral heat mapping are all part of sales data optimization.
Some retailers are even experimenting with connecting associate devices to customer wearables. Someday, a customer could walk into a store, and sales associates can know their current wireless device, rate plan, upgrade date, and even budget.
Other retailers are testing the concept of providing customers with wearables to try as they walk in the store. Not only does the customer get to experiment with the device, but it can also aid them in getting an associate’s attention, scan product information, create shopping carts, take voice commands, etc. By syncing to other mobile devices, these wearables can also help complete a transaction. Data collected during this process can then be analyzed to better understand user preferences and behavior for future personalization.
More Valuable AI and Machine Learning
Retail management systems with AI and machine learning functions can optimize businesses in many areas, from marketing to inventory management to in-store monitoring and KPIs. All the data from across every business channel can be formatted by an AI component to make it more useful. By charting this information, changes can be made to revamp the online and in-store experience. Furthermore, machine learning can use this information to automate actions.
AI can quickly analyze shopper data to recommend what is needed. For example, AI can push promotions by finding the best combination of price and product to increase the likelihood shoppers will return. AI can also gather and act on external data, such as from competing carriers or other bigbox store offers in the market.
Inventory optimization with these advanced features means establishing centralized product tracking. Additionally, supply-chain management can be done in real time. This ability can enable businesses to give same-day and nextday delivery. As AI technology improves, businesses can tailor the delivery experience to meet even more demands. For instance, if a customer indicates, “I want my new phone delivered to my car within 20 minutes,” inventory management with AI functions can automatically arrange this transaction.
Eventually, warehouse robotics and increased item-level tracking capabilities will be commonplace, but those functions are only possible with centralized, AI-enabled retail management systems.
|Chatbots won’t replace human interaction. While chatbots provide a decent front-end customer experience, they are not an end solution for full service. They should be used within an escalation process or to better serve suggestions for human agents or intermingled workflows. Research by Aon Hewitt found a 3% increase in revenue when sales associates use customer data gathered by chatbots.|
The 5G Generation of Wireless Retail
Incoming 5G-data networks are poised to change the retail market. Faster speeds, lower latency, and increased connectivity will improve wireless devices and the way shopping is done. 5G will likely be widely available within three years, and retail businesses need to be ready to capitalize on it.
Enhanced Customer Experience
Wireless devices will have more memory and improved connectivity. And just as 2G phones could not connect to 3G or 4G networks, 4G and LTE devices will not be able to connect to 5G networks. This means an increase in sales all around with new wireless devices able to access improved networks and compatible accessories for those devices.
Increased network benefits will allow carriers and wireless retailers to charge more for rate plans or even add new options. 5G will be an expensive endeavor for carriers so it will be important to recover those costs.
In addition to new rate plans or add-on services, there will continue to be more media and entertainment services. With the ability to stream or download content at increased speeds, there will be more service opportunities. Current subscription packages may become obsolete as new, more profitable services emerge.
Improved Operational Efficiencies
The new 5G world will allow better data collection, analytics, operations efficiencies, and more opportunities for business growth. Retailers that rely on multiple devices and sensors to communicate and aggregate data will see performance enhancements. This will allow more devices to be connected and with lower latency. Surveillance video or tracking technologies will also be faster and better utilized for shopper pattern recognition.
5G will mean sharing even more data to the cloud but with faster speeds and less manual entry. Automated uploads reduce errors that can skew analytics. As technology improves, AI will scan the data to make it more useful for actionable insights in all store areas, from inventory to marketing. In the not-so-distant future, autonomous vehicles will deliver store shipments and items to customers. These operations will need to be connected through a powerful retail management system to connect businesses at all touchpoints.
The Human Touch
Given the new technologies available now and coming soon, retailers must remember that human connection will still be pivotal for in-store business. This is especially true given the shift toward service-based and experiential retail stores. Balancing technology and person-to-person care is key.
Retailers should begin to future-proof their businesses by understanding which technologies and trends best suit their customers’ current needs. Not every solution will be ideal for every store; businesses must start by analyzing market demands and problem areas first. Next, they should consider a flexible, centralized retail management platform. By choosing a platform that takes future growth into consideration, retailers can begin to determine which technologies and services make the most sense. This approach clarifies which business strategies are fads and which will drive growth.