For all the excitement about e-commerce and its impressive growth rate, the real retail action – and 90% of total sales – still takes place in physical stores. 1Bhardwaj, Prachi. Online sales still account for less than 10% of all retail sales. Business Insider. May 29, 2018.
Yet retail tech has become pervasive, making the consumer experience increasingly phygital by combining physical stores and digital technology. More retailers are investing in technology because seamless tech experiences can boost brand trust, and increase shopper visits, purchases and positive word of mouth.2Ryan, Tom. Survey: Customer experience tech rivals personal attention from staff. RetailWire. July 12, 2018. Surging in-store technology investments allow retail companies to reach and influence shoppers at the very moment they make purchase decisions, while also saving consumers time and effort.
Here are some of 2018’s hottest in-store tech trends:
Mobile:
Beauty retailer Sephora’s mobile app helps create relevant personalized marketing for in-store shoppers. Consumers can scan products for ratings and reviews, look up past purchases, and access scannable loyalty cards to streamline their shopping experience.3Myers, Laura. Sephora Leads Digital Strategy in Beauty with Advanced Technology. CMS Connected. September 8, 2018. Mobile is especially needed in the grocery market, as sales are poised to explode.4 Hofbauer, Randy. Alibaba, Not Amazon, Shows Us Grocery’s True Future. Progressive Grocer. February 21, 2018. Given the ubiquity of smartphones, retail expert Randy Hofbauer declares, “Mobile needs to become the main way that customers interact with U.S. grocers.”
Virtual reality:
In time for the holiday sales season, department store chain Macy’s announced a furniture-focused virtual reality (VR) experience for consumers. The technology helps shoppers to accurately visualize their spaces and buy furnishings with greater confidence. In three pilot stores, VR-influenced furniture sales grew by more than 60% compared to non-VR furniture sales, and the technology decreased returns to less than 2%.5 Sillitoe, Ben. Macy’s installs virtual reality in 70 stores. Essential Retail. October 17, 2018.
Augmented reality:
More retail companies, including Sephora, Ulta Beauty and IKEA, have invested in augmented reality (AR) technology to give consumers a preview of the products they’re considering purchasing. AR helps shoppers buy with greater confidence by getting a realistic glimpse of their purchases, especially in categories like beauty, apparel and home décor, and it helps retailers to reduce product returns.
Beacons:
To enhance the in-store experience for consumers who want to use their mobile phones while they shop in physical stores, Walgreens’ updated its mobile app to include features designed to connect with beacons. In-store beacons send mobile alerts to customers when they walk past targeted displays. These personalized marketing alerts include consumer access to coupons and deals to entice them to buy more items while they’re at a Walgreens store.6 Walgreens Wants to Be the Beacon of In-Store Customer Convenience. Future Stores. 2019.
Robots:
To save time and labor costs, Walmart uses in-store roving robots to restock shelves, find and return misplaced products, and track inventory levels. Like a helpful R2-D2 for retail, a shelf-scanning robot travels across the store to ensure pricing accuracy and pinpoint out-of-stock merchandise.7Heller, Laura. 7 ways Walmart is innovating with technology. Retail Dive. June 7, 2018.
Smart shelves:
Kroger has installed new digital aisle displays that interact with consumers’ smartphones. Kroger Edge technology displays product pricing, nutritional information, video ads and coupons to give in-store shoppers more detailed product and company information than they can find on product labels and traditional signage.8 Driscoll, Kara. Kroger to roll out digital aisle displays that connect to smartphones. Dayton Daily News. 2018.
Handheld scanners:
For faster checkouts, Kroger launched its “Scan, Bag, Go” service, which lets shoppers scan product barcodes using a handheld scanner. When customers are finished shopping, they can use a self-checkout to pay.9Driscoll, Kara. No more waiting? Kroger looks to eliminate checkout lanes. Dayton Daily News. 2018.
Faster checkouts
The success of Amazon Go’s checkout-free stores, which use artificial intelligence (AI) and mobile technology has inspired the e-commerce powerhouse to open 3,000 stores by 2021 to make shopping easier, faster and more convenient for consumers.10Soper, Spencer. Amazon Will Consider Opening Up to 3,000 Cashierless Stores by 2021. Bloomberg. September 19, 2018. Similarly, San Francisco-based startup Zippin uses overhead cameras and sensors in its new AI-enabled convenience stores to minimize consumer frustration with checkout lines.11 Kelso, Alicia. Store with tech to rival Amazon Go opens next month. Food Dive. Aug. 21, 2018. In addition, a recent survey found that 28% of consumers wanted in-store self-checkout options to spend less time in long checkout lines.12 Ryan, Tom. Survey: Customer experience tech rivals personal attention from staff. RetailWire. July 12, 2018.
Anti-theft technology:
Home improvement chain Lowe’s uses facial recognition technology in some stores to identify known shoplifters. The technology can track customers as they move throughout the store and even collect data about consumer demographics for retail insights. In addition, ceiling cameras and advanced software located above checkout lanes can also alert the retailer when a cashier fails to scan a product, which can reduce inventory losses by as much as 40%.13 Lin, Annie. Facial recognition is tracking customers as they shop in stores, tech company says. CNBC. November 23, 2017.
Automated sorting:
Technology is also improving behind-the-scenes retail processes. To accelerate stores’ backroom product sorting, Walmart has automated the process of unloading trucks and categorizing inventory. The technology moves a trailer’s worth of merchandise along a conveyor belt and sorts the items to replenish shelves far faster than the manual process, freeing up associates to serve in-store shoppers.14 Heller, Laura. 7 ways Walmart is innovating with technology. Retail Dive. June 7, 2018.
To keep up with these in-store tech trends, more retailers are collaborating with technology companies to deliver initiatives like voice ordering and fulfilling online orders to seamlessly integrate online and offline service.15Hofbauer, Randy. Alibaba, Not Amazon, Shows Us Grocery’s True Future. Progressive Grocer. February 21, 2018. Consumer goods suppliers also play a role. They can continuously share accurate, up-to-date product data and promotional information with retailers to support in-store technology efforts that delight shoppers and give them a reason to keep coming back.