No cash, no cards – no tills? If you took this news to the middle ages, they’d have burned you at the stake. But here in the outrageous present tense, all is normal (well, kind of).
If you don’t know what I’m talking about, last week, the Amazon Fresh store in London turned on its cameras and opened its doors. The incredibly intuitive store relies entirely on IoT and machine vision technology to create a seamless (and till-less) shopping experience, while also being able to maintain exceptionally high levels of efficiency for Amazon. If you thought things were already getting Orwellian, wait until you try high-surveillance shopping (though it should be noted that no facial recognition data is stored).
The potential for digitalisation to transform retail stores into smart stores is huge, it can improve user experience, energy monitoring, inventory management, and much more. Believe me, when I say the potential is enormous.
Why The Sci-Fi Shopping Experience Should Matter to Retailers
In retail, user experience is key, shopping should be an enjoyable experience. Digital innovations can enhance this and provide a more seamless, customer-centric buyer journey, driving return visits and positive reviews by word of mouth. Surprisingly, it’s not only the TikTok generation (45%) who report they would rather visit a retail outlet that utilises AR and VR in-store, as both Millenials (49%) and Gen X (31%) agree.
Digitalisation holds the key to unlock this potential, it also affords physical retailers the power to revitalise their energy consumption and inventory management.
Soon IoT Smart Stores Will be as Common as Contactless Card Payments
Do you remember getting your first contactless card? I do. All my mates already had them and were enjoying easily buying pints at city-centre pubs (ah, remember pubs?) that already had the right kind of reader. I got mine and was a little bit out of the loop; I kept forgetting that I could use it without my pin. I even bought into a couple of conspiracies that hackers could use the internet to siphon money out of my new magic card… But sure enough, a few years passed and now I rarely even think about my pin – never mind cash.
The integration of smart stores on the high street will be the same. IoT technology has near limitless potential, Amazon doesn’t just settle with delivering car chargers and workout gear. Before Amazon Fresh, there was Amazon Go (2016) – which used the same cutting-edge sensor and IoT technology (with AI and machine learning). Amazon installed hundreds of sensors in the ceiling of the store to manage stock with a high degree of accuracy. The store tracks items down to the millimetre and adds picked up items to a virtual cart, allowing customers to walk straight out (No more five-finger discount). That was the first of its kind, but now the wave is growing and we’re going to see more retailers catching it.
I mean, why wouldn’t they? Amazon’s first smart store is a huge success, the average rating for visitors is between 4 and 5 stars and it is projected to bring in $4.5 billion for Amazon yearly. This technology also allows the store to keep a perfect picture of stock levels and helps them learn more about their customers, in terms of buyer decisions and customer drivers. It keeps them up-to-date on the health and energy usage of all of their assets. It’s an unstoppable efficiency powerhouse.
Other than Amazon, leading businesses utilising tech to build smart stores are Walmart US and Carrefour FR, which have introduced cloud computing into their process by allowing visitors to shop in-store and pay instantly by scanning barcodes on their phones. Walmart has launched over 400 of these stores in china already.
The point is that the complete connectivity between all the components in an IoT store is what brings its success. Much like a well-drilled sports team, they work for each other and create a holistic shopping mechanism. The same sensors that work to detect loss prevention also can contribute towards predictive maintenance. In the case of an Amazon Go store, they would use the ceiling sensors to alert the staff when the assets were not performing to their optimum capacity, using AI and machine learning to enhance the lifetime of a fridge or camera by reducing unplanned downtime and mechanical breakdown.
Why Are Retailers Adopting Change? The Bottom Line
When running a business, one of the most important variables to monitor is expenditure. Businesses that don’t manage their outgoings put themselves at risk of collapsing like a house of cards. Lowering operating costs is one way they can balance the P&L sheets to continue a successful business model.
Tech innovations are happening monthly, if not weekly, and new ways to reduce expenditure are continually being made available to retailers.
In 2018, US retail chain Kroger introduced tech innovations into their stores by integrating digital price tags. These allow managers to update prices instantly, based on stock levels and offers and promotions. This technology utilisation is simple data management as it takes information from inventory management and reports it to managers, but the innovation lets retailers enact this data in the basic rule of commerce, supply and demand. This drastically enhances the retailer’s ability to operate high gains and reduce stock losses as high stock levels are costly.
Know what’s not okay? 100,000 tonnes of food is wasted yearly in UK supermarkets. Considering there is readily available technology out there to prevent that while reducing costs, it’s probably a safe assumption that in ten years, most of your top high street retailers will be using IoT.
If you’re a retailer that wants to utilise the latest breakthrough technology in your retail outlet today, get in touch with the team to discuss how our solution could slip effortlessly into your existing set-up.