Retail Reborn: The Smart Store Concept Art Anthony May 14, 2019 Not so long ago, many of us lived our lives in the mall. Before Netflix and Amazon, there was Sam Goody and Sears, but the latter are dying off and it doesn’t look like they’ll be coming back. But that doesn’t mean they can’t. Many retail chains are embracing automation in order to stay relevant. Tools like self-service checkouts or Walmart’s automated assistants are already being widely used in retail environments, but there are other less obvious methods of automation in use too. In addition to these, let’s look at ways offline shopping experiences could capitalize on the benefits of new technology, APIs, AI, and other innovative software architectures that could potentially change the game. Retail Is Dying, but It’s Not Dead Yet High street retail outlets and malls are becoming a thing of the past for a number of different reasons, but their struggles are usually attributed to the rise of eCommerce. That’s not the whole story though. Plenty of outlet malls for example, like Tanger in the US and McArthurGlen in Europe, remain profitable and continue to thrive. Although it’s not the only variable in play, there’s no denying that price is a factor in why brick and mortar stores are suffering. Often located on the outskirts of towns, outlet stores take advantage of lower rents to offer items priced around the same level as equivalent products online. With staff costs to cover, however, not even outlet stores can hope to match online prices all the time. As a repercussion, reducing the number of employees needed in a retail environment seems to be a recurring casualty of boosting a retailer’s bottom line. For all of the disadvantages of shopping offline – traveling to get there, crowded stores, higher prices, etc. – there are still advantages: Allows customers to browse Can be a social experience Easier to try on a range of sizes More personal customer service Of the advantages listed above, whether it’s chatting to customers about what they’re looking for or tracking down different products/sizes, human capital plays an active role in all of them. For some chains, the smart store concept is less about eliminating the human touch than it is facilitating it. Focus on Improving the Experience Making shopping more social and more of “an experience” is something that some brands are already pushing hard. Abercrombie & Fitch, for example, introduced their smart home-inspired Fitting Room Suite in 2017. In addition to phone chargers, customers can tweak lighting levels and adjust the volume of music as they see fit. They can also ping employees to get a hold of different sizes. The desire to improve employee-customer communication is visible elsewhere too. Vocovo, for example, is another company that’s capitalizing on this with their CallPoints – buttons that send a message directly to employees letting them know someone is waiting. They’re usually installed in areas where people pick up their Click & Collect orders or where customers need employees to unlock secure storage for them to look at something. The aim here is obvious: to improve efficiency and employee reaction speed. In addition to eliminating things like wandering around stores with an armful of clothes trying to find someone to unlock the fitting rooms, digitally encoded speech and duplex speech (which means that more than two people can talk at once) has other interesting applications: in effect, it could give customers unfettered access to the knowledge of every employee working at that time. Web-based mobile POS: another area where APIs serve multi-platform environments. There are also POS systems like LS One, notably used in Nike stores and capable of connecting to EFT APIs, which allow an employee to process transactions anywhere on the shop floor at any time, without the need to join a lengthy checkout line. Tom Vermeylen, of Belgian fashion brand ZEB, has the following to say about LS Retail’s unified commerce software solution: LS Retail allows us to dispatch the right material, at the right time, to the right shop, and in the exact amount as needed. And more important, the replenishment functionality makes sure that everything is stored and shipped automatically. The level of information available in retail analytics, both in “all in one packages” and standalone products such as ShopperTrak and CountBox, is greater than ever before, meaning brands can discover a ton about their customers. In addition to geofenced vouchers from the likes of Factual or Proximi.io, this gives retail the opportunity to offer a very personalized shopping experience. Triggers, Buttons, and Data Many of us are used to seeing “buttons” in airports and IKEA asking questions like “how smooth was your checkout process?” and “how likely are you to recommend us to your friends?” with four faces ranging from smiling and green to red and angry. Although that’s great for providing immediate feedback, most retailers are failing to use them as triggers. HappyOrNot is a common customer feedback device. Similarly, connected portals are making their way into retail. Via HappyOrNot. Amazon Dash was discontinued in March 2019, but it’s interesting to think about similar IoT triggers in a retail setting. One proposition is hooking up a button to an order management API to automatically re-order stock that’s running low, in the same vein as dropshipping. Plus, products like IoT Buttons or Square (who offer a powerful API for developers to create a custom checkout experience) are affordable enough that small retailers and pop up shops can take advantage of them. Perhaps the most vital retail data is not derived from physical triggers, but reflective of the items in stock. Best Buy offers an open source API that grants access to product prices, descriptions, and images for hundreds of thousands of items. A retailer can reap many rewards from building a similar API-first developer program. Internally, data could be used to perform price comparisons or populate POS systems and product listings. Externally, it could act as another revenue model entirely. Warehouse/Storefront Hybrids We’ve written above about how human capital is still relevant in smart stores, but it would be foolish to suggest that the number of employees in retail environments won’t continue to decrease in the wake of increased automation. Companies like Argos and Costco have both, albeit in different ways, already successfully executed the store-warehouse hybrid. The former relies on employees to fetch products for you manually while the latter allows you to grab everything from pizza to hot tubs and toss ‘em on your cart yourself. Imagine a retailer offering similarly unfettered access to their nearest warehouse combined with the technology of Amazon Go. Many Amazon physical stores – such as Amazon 4-star, Amazon Pop-up, and Amazon Books – mimic the shopping experience of a traditional retail outlet, which is a move that’s perplexed many. Amazon Go is different in that it grants access to a store via an app and allows customers to simply pick up goods and walk out. A combination of Amazon Go-style technology and a self-service warehouse is exciting because it reduces the number of employees necessary for the operation and makes 24-hour possible. Mass adoption isn’t beyond the realms of possibility either, since a small team has already used the Kairos facial recognition API to recreate Amazon Go. Granted, this was only a hackathon project (Subhan Nadeem, the author of the piece, warns readers that the code isn’t pretty!) but it sets a precedent for where retail might go next. Final Thoughts Online shopping brands are still, to some extent, afraid of brick and mortar stores. It’s why so many of them offer perks like discount codes for first-time buyers as well as free shipping and returns in an effort to measure up. Amazon even debuted Prime Wardrobe, a “try before you buy” service that allows customers to order up to 8 items/sizes with no upfront charge, at the end of last year. But, when it comes to the issue of smart stores, there are some elephants in the room. Namely, before we begin to mention the inevitable job losses associated with automating more and more retail processes, that they all rely on their usage being by “ideal consumers.” IoT buttons for re-ordering only work if consumers actually bother to hit the switch when they notice that stock is running low, and there’s way too much potential for pranksters who think it’s hilarious to use it to order hundreds of perishable items. Likewise, there’s a risk of opportunistic thieves following Amazon Go users into stores and picking up various items at their expense. Another elephant in the room? In traditional brick and mortar shopping spaces, or most of them anyway, rents are getting higher and footfall is getting lower. Many offline retailers are simply trying to get by, and don’t want to risk the outlay of expensive new systems. However, they simply can’t afford to bury their heads in the sand any longer. To their credit, some bricks and mortar retail stores are embracing the technology that’s out there and trying new things. Greater use of automation, improved employee/customer communication and APIs could be what keeps offline retail going for a little while longer or it could just be something that turns it around for good.