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How technology is changing the face of retail

Loknath Das August 9, 2019 Uncategorized Comments Off on How technology is changing the face of retail
How technology is changing the face of retail

Image result for How technology is changing the face of retailThe concept of “retail tech” might bring to mind a Jetsons-like shopping experience of glowing screens, biometric scanners, and robotic personal assistants. But the reality is more along the lines of traffic-tracking sensors, radio-frequency identification (RFID) tags, handheld scanners, and heat maps, all designed to provide a real-time snapshot of how the modern consumer is shopping. This wealth of data unlocks an understanding of the in-store customer journey that’s deeper and more insightful than ever, and retailers that can successfully leverage this information are the ones that will thrive.

Still, none of this technological wizardry matters if retailers don’t get the basics right. “We have all of these [great] technologies,” says Bjoern Petersen, president of Sensormatic Solutions, the global leader in enabling smart and connected shopper engagement. “But the No. 1 rule is: Don’t destroy the shopping experience.”

For Petersen, that starts with inventory accuracy, which is essential to getting shoppers to come back. “If I am coming in to buy or pick up something and it’s not there, that’s a terrible experience,” he says. “Yet almost all retailers have issues with inventory.”

RFID eliminates manual inventorying by electronically accounting for items packed inside shipping cartons, which are scanned upon arrival. Here’s how yoga-workout outfitter Lululemon puts the RFID-based TrueVUE technology to work: When a customer pays for a shirt, it triggers software that calls for a replacement to be pulled from the store’s back room. If the item is in stock, it will quickly appear on the floor.

“That’s a great customer experience,” Petersen says. “And the retailer can sell down to the last unit at full price because they know where every item is. If you don’t have that kind of deep visibility, you end up doing unnecessary markdowns—and when your store is full of racks of discounted items, the feel is very different.”

Not every retailer leverages RFID or other technology to create this deep inventory knowledge. Petersen says those brands will fall behind, particularly with services like Buy Online, Pickup In Store (BOPIS) on the rise. Petersen points out that more than 10% of BOPIS items are unavailable when customers arrive to pick them up, leading to order cancellation. “The percentage is unnecessarily high,” he says.


Almost all retailers try to optimize costs, often through labor. But Petersen warns that cutting too much here runs the risk of losing the “all-important customer experience.” No shopper wants to wander the aisles in search of assistance, though retailers don’t want to pay for associates to stand around during slow periods.

So how does one staff the right amount of sales associates at the right time? The answer lies in technology that analyzes foot traffic, tracks transactions, and optimizes the ratio of staffers serving customers compared to those conducting replenishment tasks.

The Sensormatic Solutions ShopperTrak traffic system uses sensors placed within stores to track shopper entrances, exits, and where they spend their time. Small shops have one sensor per entrance plus a calibration sensor to correlate the readings, and larger shops place one sensor per zone within the store. This information is boosted by Wi-Fi mobile technology, in which location-based and anonymized data is collected to understand both the behavior of in-store shoppers and overall shopping-center visitors.

“You can create trend lines and essentially predict the future to schedule exactly the staff you need,” Petersen says. “So, you’re not only operating at the right cost—you’re also getting the return on that cost.”

The checkout experience is another area where Petersen sees room for improvement. He points to Walmart, Nordstrom Rack, and Target, which equip their sales staff with handheld devices that allow shoppers to pay wherever they are in the store, without waiting in line. Others are rolling out mobile self-checkout, which effectively turns shoppers’ phones into a point of sale (though Petersen notes this requires loss-prevention solutions). Still other retailers are employing vending kiosks and other tools for online order pickup, to-your-door delivery, and other customer conveniences.

The goal of retail technology is to make shopping more seamless—and lead to even more compelling experiences. “My hypothesis is that AI is the next big wave in retail,” Petersen says. “When you look at the inventions that really disrupted the industry, the first was the internet, and then smart phones, which created new ways to transact. AI will automate things and optimize them over time.”

That optimization is key to transforming retail into a precision industry—one devoid of inventory issues, unnecessary labor costs, and more. “AI and machine learning will make retail a lean-and-mean industry,” Petersen predicts. “They will entirely shape what retail is and what it can be.”


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