E-Commerce generally gets all the headlines, but the biggest threat to physical retail has long been … physical retailers themselves! And, their self-inflicted threat is very real. If traditional, legacy retailers — “old school” brands, if you will — don’t get out of their own way and adopt technologies and processes to optimize stores based on actionable data and intelligence, they won’t be around in 10 years, and maybe not even five.
But, those brands don’t have to go the way of the many unresponsive, change-resistant companies that failed before them, for the IoT-enabled “smart store” is here, today, and it’s making an impact, enabling retailers to deliver differentiated, valued-added shopping experiences to their shoppers.
Just as the past several years have seen an unprecedented change in the retail industry, it’s also seen an explosion of technologies aimed at addressing the connected needs of homes, schools, and even cities. But, for some reason, while brands have invested heavily in digital technologies in the online channels, they’ve neglected the brick-and-mortar channel and let it, a source of nearly 90 percent of all retail sales, atrophy.
The IoT-enabled, connected and – yes, even smart – store is changing all that.
The technology landscape for in-store technologies and data-driven systems continues to grow. Seemingly every day another innovator emerges with a great idea to ease a very real pain point within retail, and solutions span the gamut from flashy technologies serving up personalized content based on the item a shopper is holding in hand to more routine solutions addressing specific problems, like how to ease the burden of online purchases returned to physical stores.
Through technology innovations, the smart store is powered by an ever-growing, vast array of data inputs, and it allows stores to better allocate their most powerful, expensive and scarce resources – labor hours, for example – to where they make the most impact on service and sales objectives.
For example, take labor scheduling, and envision a store where an assistant manager gets her schedule delivered to her mobile device, and where when she unlocks the IoT-enabled lock on the store, she is automatically “clocked in.” Moreover, as she enters the store, she receives a list of assigned tasks to complete before store opening sent directly to her mobile device, and as she completes each task and “checks” them off the task list, a record is created to understand task duration and opportunities for back-end, systemic efficiencies.
Once the store opens, operationally it all becomes about the shopper, the way retail is supposed to be. Data — and the arts of design and merchandising — drives the product selections on the floor, with analytics applications optimizing assortment planning and the like. Retail analytics platforms, like RetailNext’s SaaS offering, provide data and a feedback loop regarding shopper engagement on the floor, both with sales associates and product displays, and cycles back to even better merchandising planning. Item-level RFID enables smooth processes around product movement, identification and restocking, and delivers insights into whether a product moves, or not, because of design, placement, fit, price and more. RFID tags even empower the fitting room to become the digital engager, examining different designs, sizes, colors, etc., and even initiating shipping straight to the home or another location, immediately connecting the dots between online and in-store activity.
And that only scratches the smart store surface. Digital displays deliver content based on demographics and/or purchase behavior. Inventory management applications are powered by dwell, engagement and purchase behaviors. Operational tasks are diverted to times when shoppers are not in-store, and even HVAC, lighting and ambient music systems are throttled by store traffic and data inputs like weather, etc.
When you feed rich activity data into smart store applications and then measure the combined and integrated impact of all of these applications on the same playing field, retail magic returns. It doesn’t replace the carefully curated “art of retail” based on judgment and experience. Rather, the science complements and leverages the art, and allows retailers to more quickly move in the right direction.
Stores are an integral channel in today’s cross-channel, multichannel retail world, and they serve different roles to different shoppers and different retailing business models. Yet, while all stores serve many different roles, the smart stores share common characteristics. They are maniacally focused on shoppers, and are responsive to shoppers’ ever-evolving needs and wants — agile, nimble and quick. They utilize data-driven insights to complement retail’s hard-earned judgment and experience. And, they collect and act upon a wealth of inputs – including those of shoppers – to serve, delight and retain.
And, ultimately, smart stores save physical retailers from themselves.