Cutting-edge retail technology promises to transform the sector, but even the best developments are no replacement for getting the basics right.
More than 100 Australian retail professionals sacrificed their holidays on the beach this summer, flying to New York to attend the world’s largest retail conference.
Despite freezing temperatures, exorbitant airfares and surging COVID-19 infections, more than 35,000 retailers, suppliers and retail experts from 90 countries attended the conference, which is hosted by the National Retail Federation.
This year’s event did not disappoint.
Autonomous checkouts and queue-busting mobile point-of-sale technology featured at the NRF’s annual retail conference.
Retailers have returned to Australia full of inspiration and armed with information about the latest trends and technologies, from autonomous checkouts and mobile point-of-sale systems to holographic marketing, augmented and virtual reality, and the metaverse.
Some innovations may never see the light of day in Australia because, in our relatively small market, retailers would struggle to achieve acceptable returns on the sizeable investment required.
However, experts say some emerging technologies would be relatively simple to implement and could be in stores within 12 to 18 months.
Given the well-documented labour shortage in the retail sector, “frictionless” shopping in the form of autonomous checkouts, “just-walk-out” and “scan and go” technology, and queue-busting mobile point-of-sale devices could quickly become mainstream.
Smart carts, like these on display at the NRF’s Big Show, could soon replace the traditional shopping trolley.
Veteran retailer Gareth Jude, the CEO of retail advisory ThinkUncommon, liked scan-and-go technology implemented by Best Buy, where customers open the Best Buy app in the store, scan the products they want to buy, and add them to a virtual cart on their mobile device. Associates package the products and have them ready to pick up at the front of the store.
“Smart” shopping carts, which scan and tally the cost of products as consumers place items in their trolleys, were also a highlight at the NRF’s Big Show and would be easy to retrofit in supermarkets.
“Not all of this is going to stick and the stuff that sticks might be a few years out in the future,” says Jude. “It’s great that retailers are experimenting – whether it sticks or not is up to the customers.”
Fashion retailer Ganni has started using hand-held point-of-sale technology developed by Boston-based company NewStore, which enables staff to get out from behind the counter and process customer transactions, make selling suggestions, check stock levels and search for inventory in other stores on iPhones using apps with POS and customer support functions.
“Staff don’t get trapped behind a counter – it’s a high service environment and you never break that connection with the customer,” Jude says.
Queensland-based tech company TagR has gone one further – its web-based technology enables shoppers to scan and pay for products on their phones and promises to increase retailers’ sales by freeing up store staff to focus on customer service.
Real-time inventories
QUT’s Professor Gary Mortimer, who chairs the Australian Retailers Association’s Consumer Research Advisory Committee, says retailers such as Aldi, REWE, Tesco and Wakefern are using Israel-based computer vision company Trigo’s technology to quickly convert traditional supermarkets into “zero friction” stores.
AI-powered ceiling-mounted cameras scan and tally the cost of products as customers add them to their trolleys, bags, pockets or prams – and then leave without having to pay at the checkout.
Trigo’s technology, similar to that deployed in Amazon Go stores, also enables retailers to monitor inventory levels in real time and connect their e-commerce, inventory management and order management systems while generating insights into customer behaviour. “When Tesco and Aldi are playing in this space, that shows there are great efficiencies,” Mortimer says.
He also sees a role for AI-enabled voice technology in retail stores, given the fact that many consumers already use voice to connect with Siri, Alexa and Google Assistant on their mobile devices.
Rather than tracking down a shop assistant to ask where the capers are, consumers could open a retailer’s app and ask for assistance.
Germany’s Schwartz Group, for example, is working with Vixen Labs to develop advanced AI-based voice technology that can deal with a variety of accents and languages.
“It’s one of the types of technology I’d expect to see pretty quickly because we’re already using it – we might have Google Assistant or Alexa systems at home,” Mortimer said. “The next stage will be talking to my phone to order groceries.”
Artificial intelligence, which is already widely used in retail marketing and merchandising (eg predictive ordering), featured at the NRF’s Big Show, with some of the most promising technology designed to improve store operations and buying processes.
Jude says Walmart is using AI-powered software, developed by California-based start-up Pactum, in its buying office to automate supplier negotiations, negotiating routine contracts with little or no human intervention.
Virtual and augmented reality
“The AI understands what is in the contract, has instructions on guidelines where to take the next one and puts terms forward to the supplier,” Jude said. “Walmart reckons they’re getting the majority of contracts done without human intervention.”
Virtual reality and augmented reality (AR) applications are also being tested by retailers to conduct shopper research, improve store layouts and ranging, and make shopping easier for customers.
Mortimer says Sainsbury is using AR to help customers find products in supermarkets. They open the Sainsbury app and camera on their phone, search for a product and, like Pokemon Go critters, the item pops out from shelves.
US company ReadySet’s immersive 3D software uses VR to help manufacturers and retailers create realistic virtual store plans and planograms to plan layouts – complete with products, signage and fixtures – and test the reaction from customers before implementing them.
The growing use of AR and VR in retail is leading the sector towards the metaverse, with brands attempting to create immersive experiences to create excitement, build customer loyalty and boost the sales of physical products.
Nike, for example, has launched a Web3-enabled metaverse platform dubbed .swoosh, which allows consumers to co-create and collect virtual products such as shoes and jerseys and sell them in a virtual world, with scope for virtual products to become physical products down the track.
L’Oreal has dipped its toe into non-fungible tokens, launching a branded digital wallet where customers can claim free NFTs and use them to unlock digital experiences, real-world events and new product drops.
Gucci has built virtual spaces on online gaming platform Roblox, offering games and NFTs and showcasing vintage fashion pieces, while Forever 21 is testing customer reaction to virtual new products in the metaverse before turning them into physical goods.
Back home, cutting-edge Sydney-based brand Injury allows customers to shop for digital clothing modelled by avatars. Online retailer The Iconic took its first step into the metaverse last November, launching an NFT from its runway show. The NFT was auctioned off on its website to raise funds for its charity partner, ThreadTogether.
“There are going to be so many interesting and probably at this stage not yet understood opportunities in how metaverse-based technologies are going to change the retail landscape,” says Kelly Brough, retail and consumer lead at Accenture.
“The promise is immense,” Brough says. “In the context of retail, it enables much more deeply blended physical and virtual experiences.”
According to an Accenture report released last month, 55 per cent of consumers want to be active users of the metaverse and 89 per cent of company executives believe the metaverse will have an important role in their organisation’s future growth. Accenture estimates that $US1 trillion ($1.4 trillion) in value can be created from metaverse experiences and commerce by the end of 2025.
However, Brough says retailers harnessing metaverse technologies need to protect consumers’ data and privacy to build trust and create “fluidity” between their virtual and physical environments.
“Not everyone I speak to is saying let’s dive right in,” she says. “In retail right now, it’s more about testing or experimentation and starting to understand … what might resonate with consumers.”
If the metaverse takes off in retail, we might see supermarket collectibles and rewards replaced by NFTs, and virtual stores where consumers can shop for clothing, shoes or furniture using an avatar, before swapping them for the real thing.
However, for retailers still grappling with supply chain disruption, soaring costs, last-mile challenges and increasingly cautious consumers, venturing into the metaverse at this point may seem a bridge too far.
As Matt Alexander, the CEO of US department store Neighborhood Goods, told attendees at the Big Show, “you can have all the tech in the world, but it doesn’t mean anything unless the underlying offer to consumers is there. It comes down to the basics.”
Source Australian Financial Review 3.2.23
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