In the ever-evolving landscape of retail, technology has become a double-edged sword. It offers unparalleled possibilities, but also presents challenges, especially when solutions are developed in a vacuum, detached from real-world consumer needs and desires. The most recent example of this is Walgreens’ foray into replacing 10,000 conventional refrigerator doors with digital ‘smart’ screens from CoolerX (formerly Cooler Screens) resulting in a $200 million breach of contract lawsuit in 2023 against the chain.

Retailers are increasingly integrating tech solutions like augmented reality mirrors, smart shopping carts, and cashier-less checkout systems. While these technologies sound promising on paper, as did Cooler Screens, their practical utility often falls short.

Overreach

There has been a surge in deploying in-store retail tech as retailers strive to create seamless shopping transactions and differentiate their shopping experience from the competition. However, many innovations seem to address problems that are either exaggerated or nonexistent, becoming a distraction and potentially diverting focus from genuine consumer-centric improvements. The Walgreens/CoolerX execution is a perfect case in point. It was around 2017 that I first saw the launch of Cooler Screens; it was a clever idea but ignored one basic fact. Shoppers want to look through the glass door, see what’s available, make their choices – then open the door quickly (to avoid the cold, perhaps except in the summer heat) and grab the product they want.

The Cooler Screens derailed that behavior by displaying snazzy electronic ads or shelf sets, which didn’t always match the products behind the display, and hid the products from the shopper’s sight.

Tech is cool (pardon the double-entendre). No question about it. The Cooler Screens opportunity offered the possibility of increased sales, incremental profit from advertising, the ability for the retailer to offer dynamic pricing and promotions and improved shopper engagement and insightful shopper analytics. The problem, according to reports from Walgreens’ is that the tech was loaded with bugs: Screens didn’t load or failed resulting in blank screens and displayed incorrect products or information. The company also reported that each screen’s revenue from brand advertising was $215 annually, which was less than half of the agreed contract minimum.

Now the situation has become ugly. To further complicate matters, Walgreens’ ex CEO, Greg Wasson, who departed in 2014, is one of the co-founders of CoolerX. Wasson and the attorneys for CoolerX contend that Walgreens’ current CEO, Roz Brewer reneged on the sales agreement. They wrote that “After visiting stores in which Smart Doors had been installed, Brewer decided that she did not like the way they looked, purportedly comparing the screens to ‘Vegas’ in a derogatory way.” To force Walgreens into paying its overdue invoices, CoolerX CEO and co-founder Arsen Avakian cut the data feeds in December to 100 Walgreens’ stores in the Chicago area, according to Bloomberg.

The Disconnect Between Retail Tech and Consumer Needs

It is notable that the proliferation of in-store technology typically prioritizes novelty over necessity. Retailers are increasingly integrating tech solutions like augmented reality mirrors, smart shopping carts, and cashier-less checkout systems. While these technologies sound promising on paper, as did Cooler Screens, their practical utility often falls short. 

Example, augmented reality mirrors allow customers to ‘try on’ clothing items digitally, but they often fail to replicate the tactile feedback and fit assessments that in-store shoppers prioritize. I remember the first time I tested these in the Prada store on Rodeo Drive in Beverly Hills. Granted it is clever, but then I still needed to ask a salesperson to bring me the actual garment so I could assess the detail and fabric (I bought it!). Smart carts (which have been tried unsuccessfully for decades) equipped with digital maps and automated checkout options intrigue tech enthusiasts and promise retailers to reduce checkout labor. But not so fast. They overlook basic consumer behaviors, such as the preference for human interaction during shopping. And don’t get me started about self-scan.

Ignoring Consumer Desires for Simplicity and Interaction

Many retailers and tech innovators assume that every consumer values speed and automation above all else. This assumption does not align with the predominant retail customer base, who often values simplicity and human interaction as part of their shopping experience. The rise of cashier-less stores, for example, underscores a misalignment. While they promise efficiency, they may inadvertently strip away opportunities for customer service, interaction with employees, upselling and brand building that consumers find reassuring. A personal touch, such as assistance in locating items or providing product recommendations, can significantly enhance consumer satisfaction — an important reminder to those retailers who have added those plexiglass doors to lock up high-theft goods (including ice cream!).

And Then, There Are the Retail Networks

In-store networks are set to play an increasingly critical role in the retail landscape. As technology continues to evolve, and the cost of flat screens continues to drop, retailers that invest strategically in enhancing their in-store connectivity and programming are likely to see significant benefits in terms of customer satisfaction and competitive advantage. Retail media networks should serve two purposes: to educate and entertain. Those retailers who merely see it as a revenue opportunity to sell as many ads as possible to CPG brands will fail. 

Some supermarkets have added to their stores 50 to 60 flat screens and loaded them up with ad after ad after ad. There are two key results: The screens are white noise to the shopper and therefore “invisible,” and they just ignore them in the first place. There is another worse unintended consequence – the shopper gets so bombarded with ads they become annoyed and leave your store for another quieter place. 

The winning strategy is to align these technological advancements with consumer expectations and needs, ensuring the retail tech genuinely enhances the shopping experience. To optimize retail media, think like a TV producer with 2-3 minutes of high-quality editorial content, a 30-second ad, and then repeat. Remember that the shopper has not come to your store to watch videos, they are there to buy.

Looking Forward Not Backward: Aligning Retail Tech with True Needs

For technology to truly benefit the in-store shopping experience, it must align with the tangible and intangible needs of consumers. Solutions should focus on amplifying convenience without eclipsing the human elements that define the essence of physical stores. Proposals to enhance or innovate should be rooted in what customers actually seek: efficiency paired with choice, novelty balanced with familiarity, and technology integrated with a personal touch.  

Bottom Line

The critical takeaway for retailers is that innovation should be pursued with purpose and precision. By focusing on technological solutions that align with actual consumer behaviors and preferences, retailers can create richer, more rewarding shopping experiences. This requires abandoning the allure, excitement and promise of technology for technology’s sake and embracing advancements that genuinely solve existing problems, improve customer interactions, and enhance operational efficiencies.

As the retail environment continues to change, the thoughtful integration of technology, guided by genuine consumer insight, offers the best path forward.