The Creative Technologist Blog

It is no secret that retailers have been suffering ever since the pandemic swept the globe in early 2020. An industry that was already playing catch up to digital platforms like Amazon was dealt a seemingly fatal blow when most brick and mortar locations were forced to shut down. Hundreds of retailers have filed bankruptcy, even larger companies that apparently should have been able to weather the storm.‍

Sign Saying Closed due to Covid-19

What Happened?

As shoppers lost their access to physical retailers, many consumers who had avoided adopting digital technologies were forced to turn to newer technologies for everything. This was especially true for everyday purchases like groceries.

This acceleration towards widespread adoption of digital solutions heavily favored online retailers such as Amazon, Shipt, Uber Eats, and Instacart. Supermarkets that had the resources to adopt curbside pickup and other digital services at the onset of the pandemic have fared better but were still impacted.

Brick And Mortar Stores Wither

As we continue to see more and more news stories of behemoth retailers collapse, it is often overlooked who is suffering the most from this: smaller retailers who do not have the resources in place to shift towards these new digital trends.

Mom and pop store closed

Smaller retailers are entirely unable to compete. As these mom-and-pop shops begin to wither, it's only a matter of time before they are entirely replaced by supermarkets and franchises that survived the pandemic.

The future for smaller stores is not entirely bleak, though. There is hope. Even though these supermarkets have massive capital reserves and digital solutions in place, they are reactive to the current state of retail.

They are not proactive. You may have noticed these corporations did not being embracing digital transformations until they absolutely had to.

With smart retail technology becoming more accessible, mid-market retailers have an opportunity to thrive by embracing the retail 4.0 transformation that is currently taking place.

Consumers Turn To Digital

In the height of the pandemic, digital shopping experiences were just a part of the new normal for consumers. Even as the pandemic's restrictions live in the US, we continue to see customers continue with that online shopping habit developed during the pandemic.‍

Person handling Curbside Pickup

Even as consumers return to stores, people are now much more likely to a retailer's mobile app as a part of their in-store customer journey. Even beyond that, customers are more comfortable using in-store technology too. We have seen a substantial rise in the utilization of in-store kiosks and an overall change in behavior towards customer technology engagement.‍

Retail App Use Is Up Among Mobile Moms |

The increased usage of technology in retail spaces shows that even as customers pour back into brick and mortar stores, the expectation of smart retail has already been established. Positive retail experiences are now deeply intertwined with an expectation of in store technologies.

Survivors Thrive — The Rise of the Smart Store

Despite the constant doom and gloom of retailers failing, there are a few success stories. Physical retailers who embraced these trends early on or even before the pandemic have seen substantial growth over the last year. These retailers positioned themselves early to leverage smart retail technologies to gain a degree of adaptability their competitors did not have.

Smart Store

According to US Chamber, the most successful retail stores were able to augment their retail environment with technology to the point that it is integrated directly into their store experiences. Integrating technology into their core store experience is the critical factor that separates the big winners from those who are struggling.

Self Checkout Kiosk

Retailers who have found ways to address the pandemic with radical shifts to their business processes have seen more success than those who have adopted more temporary solutions. Even as the pandemic restrictions lift, more and more physical retailers are transforming into smart stores.

Shaped by Disaster

Born from necessity, the first major smart store advancements we saw were focused on cutting costs. The two biggest expenses for a physical retailer are the employee salaries and the rent for the physical building. The most common smart store solutions today are generally targeted at minimizing these two expenses.

Self-checkout kiosks installed in all San Diego libraries - The Morning Call

Solutions like self-checkout kiosks are designed to reduced the required store associates needed at any given time. While these kiosks often help with the social distancing restrictions imposed during the pandemic, their usage is primarily driven by the potential cost reduction in employees.

We even see the utilization of kiosks to replace customer service desks and other informational services in larger retail environments like malls and amusement parks. Self-checkout kiosks are also the easiest form of smart retail to implement since they are usually wrappers on top of the retailer's existing POS (point of sale) system. Not much development work is usually needed to achieve this and is a great entry point for retailers looking to adopt smart retail.

Complete automation of in-store employee responsibilities has one of the largest returns on investment for any smart store. This was originally one of the primary driving forces for smart store innovation before the pandemic.

Experience — Cooler Screens

Minimizing rent costs is another target for retailers. This expense is harder to target than reducing salary costs; however, there are still plenty of opportunities here. Using technology like smart shelves that can replace and monitor inventory needs more accurately can reduce the need for storage space allowing them to operate out of smaller physical locations.

Smart shelves with product placement driven by AI may also allow stores to build shelves up higher and in more efficient ways using less real estate. We are starting to see this now with companies like cooler screens offering a way to see products behind a freezer door.

Products can be dynamically displayed and sorted such that the entire product inventory does not need to be visible to a customer at any given time. Offering e-commerce like experiences in a physical space is key to retailers optimizing their real estate to offer more value in a smaller space.

One thing to notice here, the first steps towards smart retail in response to the pandemic have focused almost entirely on risk mitigation and decreasing expenses. As this trend continues, those who truly want to compete in this space need to focus on the needs of the store and the customer's experience.

Digital Transformation For A Better Customer Experience

The one fatal flaw a lot of smart store implementations have is that they prioritize the retailer's return on investment over the individual customer experience. While that's understandable considering the current economic climate for physical retailers, we have to be mindful not to cause too many disruptions to the customer in the store.

Retailers must balance the advantages of automation with the needs of the customer. Negative experiences from poorly designed retail technology have the biggest consequence of lowered customer retention for in-store foot traffic. Even if they continue to engage with your brand, they will shift to online stores over your physical store.

What works in experiential retail

The biggest factor to consider for any smart retail initiative is the experience it provides for the customer. A mistake smart stores will often make is they focus too much on convenience. While convenience is important, it doesn't tell the whole story.

Physical retail of the past treated their brick and mortar storefront as merely a place where customers would come, perform some transaction, and then leave. This is no longer the case. Customers of today, especially in a post-pandemic world, want an experience. This is especially true for younger demographics who prefer to see experiences they can share on social media.

Major players in this space need to become in tune with their customers. They really need to figure out why someone would come into their space instead of just visiting an online store. Most importantly, any adoption of smart retail technologies needs to put analytics front and center to ensure what you think your customers want matches reality.

Those analytics need to go beyond sales metrics too. Analyzing a customer's overall happiness and engagement in that physical retail space in ways that relate to the brand's experience is paramount to investing in the right smart retail technologies.

When we hit our lowest point, we are open to the greatest change

The pandemic ravaged many retailers, but not all hope is lost. Adopting in-store technology strategically in ways that add value have been shown to re-engage old lost customers and attract new customers looking for experiences they can't get online.

CNBC found that there's an anticipated 25% increase in expected travel plans once the pandemic is over. The number one reason cited for this is a desire for experiences they cannot have at home. It would be foolish for retailers not to cater to this desire for an experience after everything that has happened.

Future of store aisles

There is no reason post-pandemic retailers should continue competing against online stores. The value a physical store has is equal to the experience it can provide, not just in the goods that it sells.

The future of retail is bright.

Every brand and every retailer will have its own experience. The retailers who embrace this now will thrive as the global market adopts these ideas. Technology is becoming more and more accessible, with startups worldwide shifting their focus onto smart retail technology. There has never been a better time to embrace the future than now.

A Match Made In Heaven: Smart Retail Solutions and the Internet of Things

Trend-setters are already paving the way. Retail 4.0 is here whether we like it or not. The question now becomes: How does a physical retailer become a smart retail store? Internet of things have become a talking point at the center of the smart retail revolution.

Not all solutions need to be as complex as a what Disney did for their parks. They made a mobile app for an amusement park that uses real-time data to manage their ride's queues so visitors don't have to wait in line. When it is their turn to ride the visitors instead get a notification when it's their turn.

Even simple solutions like a smart light that lets gas station visitors know if a bathroom is clean are effective in the right retail environments. Many other existing internet of things solutions are finding their way into smart retail too.

Tooshlights helps people know where to go

A recent study by McKinsey showed that RFID had seen major adoption across the smart retail space for inventory management due to the price of RFID dropping and the technology improving. When properly implemented, RFID can help retailers improve inventory accuracy, reduce labor costs, and boost revenue. RFID provides a cheap and effective way to leverage incorporate digital transformation strategies into your store without committing to some high budget overly complex solution.

RFID in retail

Computer vision has shown promise in advanced product marketing, smart store layout design, and even improved customer interactions with touchless interactions with other smart retail technology like kiosks. Computer vision doesn't just mean RGB cameras like we typically think. A cafe in Tokyo, Japan, uses an infrared camera to detect heat maps so they can projection map animated designs onto the drinks of their patrons, creating a unique customer experience.

Computer Vision identifies products in hand

Bluetooth beacons are finding their way into big-box retailers and grocers to provide wayfinding and in-store navigation. The analytics gathered from pathing their customers' routes allows for the retailer to position products in more strategic locations.

Target rolls out Bluetooth beacon technology in stores to power new indoor  maps in its app | TechCrunch

Companion mobile apps that interact with the in-store experience at first might not seem like an internet of things solution. Still, some of the most successful experiences rely on input from internet of things devices implemented within the smart store.

For example, combining computer vision and wayfinding allows for predictive loss prevention, enabling smart retailers to minimize the risk when adopting self-checkout enhancements.

This is especially true for systems which use the customer's mobile app instead of a kiosk or store associate for checkout. Using a mobile app as a part of the in-store customer journey makes it easier for the customer to be aware of coupons and discounts on sponsored products. The store can even promote those products through location-aware alerts for nearby products.

Meijer finishes rollout of Shop & Scan

A store in New York named ShopRite even launched a robot to help sell candy to patrons in the store. Customers flocked to the store to see the cute robot try and sell them candy. They went to ShopRite for the experience of interacting with the robot, which then led them to purchase products they otherwise might not have.

Can ‘Smiley’ the Robot Sell More Candy at ShopRite?

We will continue to see these technologies adopted as a customer expectation as we move into a post-pandemic world. The bar for physical retailers has been set; it's now up to them to adapt to the new market.

You’ve successfully subscribed to Augmented
Welcome back! You’ve successfully signed in.
Great! You’ve successfully signed up.
Your link has expired
Success! Check your email for magic link to sign-in.