September 24, 2021

SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

Survive or Die: An Insider View into the Adoption of Retail Tech Solutions

Share This :
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

This post was authored by Hemant Chavan from Brik + Clik. Hemant is the Co-Founder of Brik + Clik and when he’s not writing, he’s experimenting with new ways to push the boundaries of retail.

While everyone is talking about the future of retail, there is a very small sample size regarding the adoption of these technologies post-COVID as it pertains to independent retailers. BOPIS or curbside pickup was a necessity rather than an innovation that found widespread adoption at scale due to the rollout by Big Box retailers. Going into Q2, there is a spate of resources touting the adoption of in-store technology. 

The behind-the-scenes story regarding the adoption of these technologies might throw a surprise or two. We rated the adoption of these technologies based on daily in-store observation, interviews with fellow operators, and by using the in-store sensors. 

While the majority of the retailers were either shut down, scaling back operations, or pivoting to online, we had a front-row seat to the store operations and foot traffic on both coasts by launching amid a pandemic. The first store we monitored is in Santa Clara, CA at the Westfield Valley Fair, and the other store is at the Oculus in New York City.

Eleven technologies were analyzed and can be found in the table below.

Table of Contents

We categorized these technologies into four categories: 

  1. Survive – Short Term: Necessary in the short term with a high replacement probability
  2. Survive – Long Term: High probability that these technologies are in use in 2030
  3. Die – Short Term: Low engagement in dry use retail
  4. Die – Long Term: High probability of concept failure in the long term.

, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

1. QR Codes 

    Verdict – Die

    Technology – QR codes on restaurant-style menus on shelves to redirect customers to the product page online for descriptions. Customers would be avoiding touching products but still could learn about the product. This would keep associates socially distant from customers and vice versa without compromising on product education. 

    Observation – We saw a less than 10% adoption rate for QR codes across both the stores, even with placements of QR codes on each shelf along with training provided to the staff to encourage the use of QR codes to learn more about the products. A retail customer might have some level of motivation to make a purchase, but is typically distracted by the spate of products and visuals.

    QR codes do not work in dry use retail.

    A study conducted for Klarna, an installment payments app, pegged the adoption at 48%, which seemed exceedingly high compared to our in-store data. QR codes seem very transactional so a better placement would be at checkout where you are using it for payment gateway applications. As an alternative, programmable NFC tags were tested due to the low engagement of the QR codes.

    , SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

    2. NFC Tags

      Verdict – Survive

      Technology– Programmable NFC Tags that can be used for a multitude of purposes, including: redirection to the website and social media, autonomous checkouts, and customizable brand discovery pages.

      Observation – The adoption rate was higher than QR codes at 25% primarily due to avoiding the conflict point of opening up your camera. 

      Significantly, NFC Tags are much more aesthetically pleasing and have more flexibility with custom branding than QR codes. A great use case is when NFC tags are programmed to redirect to the website at checkout, with a display prompting the customer to leave a review.

      Another application would be replacing price tags with NFC tags on apparel. Upon tapping the tag, the customer would be redirected to a custom page listing the brand story, material specification, fit, color and size options, in store and online availability, and a checkout link to a payment gateway.

      These are just the tip of the iceberg when it comes to the customizations that are possible with NFC tags.

      3. Digital Receipts

        Verdict – Survive

        Technology – Reduce operational lift required with printing receipts and capture phone numbers and emails for growing a subscriber base.

        Observation – Approximately 73% of customers provided their email or phone number at the point of sale instead of paper receipts. The rest avoided providing the information primarily to avoid receiving promotional campaigns. Importantly, no sales were lost due to the lack of issuance of paper receipts.

        Cell phones are prime real estate right now.

        As customer engagement is driven through mobile technologies it becomes increasingly important for stores to become mobile in many ways. Customers want a seamless checkout experience and do not mind sharing their emails, which could be junk email in most cases or phone numbers if it helps them in shaving a few seconds in their checkout experience.

        , SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

        This seems more like a fundamental shift in consumer pattern due to COVID-19. Ali Kriegsman, the co-founder of Bulletin, which pivoted from brick-and-mortar to an online wholesale marketplace explains,

        “When I used to run brick-and-mortar stores from 2016-2019, most customers were averse to giving their phone number or email at checkout, which we needed to issue a digital receipt. I think post-COVID, with all of us becoming so accustomed to handing over phone numbers or emails to subscribe to digital events, customers are MUCH more comfortable sharing that type of personal data in-store.”

        4. Digital Window Shopping

          Verdict – Survive

          Technology – QR codes on the windows redirecting the customer to the website or social media page enabling them to engage with the store before or after store hours, or as they pass by on the street. Also, includes dynamic and smart window displays to create agile promotional content.

          Observation – Although there was a lower than 25% adoption of these QR codes, they did capture the attention of the customers and drove incremental traffic to the website. Additionally, customers preferred to come to the store after browsing the website, instead of directly ordering from the website.

          In conjunction with computer vision sensors, which provide invaluable data about customer demographics passing through, the smart displays can create content that is customizable to the demographic and time of day. This reduces trial and error and manual work of changing window displays frequently. Giving the passer-by an option to learn about the store, or the products within, without having to enter is invaluable. This is especially true with unmotivated buyers that are not ready to make a purchase, or even enter the store at that time. However, you can still engage these customers at the top of your funnel with smart window displays.

          As Mark Dilizian, the CEO of Exteros puts it,

          “Through computer vision technology, you can learn more about your customer in a physical store that is analogous to an ecommerce store, but actually you can learn more about your customers and how they shop.”

          @brikandclik

          Did someone say window shopping? ##fyp ##gaspedal ##experiential ##retial ##omnichannel ##storestoshop ##coming2america

          ♬ gas pedal in the usa – veggibeats

          5. Local Delivery 

            Verdict – Survive and thrive

            Technology – To test if the customers would adopt the store as a grocery store to discover complimentary food and beverage brands. The extension of this would be rolling out an on-demand delivery service—especially in densely populated cities where such service is much more efficient—rather than using third-party postal services.

            Observation – Medium scale adoption on food delivery service apps as customers still associate food delivery apps with prepared foods. Creating a marketplace for on-demand delivery similar to Cornershop would provide incremental distribution to retail stores.

            , SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

            While the share of ecommerce in the overall retail market rose from 15.8% at the end of 2019 to 21.3% at the end of 2020 (according to the US Department of Commerce), the supply chain for the fulfillment of this demand could not keep pace. The delivery times went from a few days to weeks, as we observed during the holiday season. While there has been tremendous investment in last mile delivery services over 2021 Q1, the store of the future would by default convert to agile delivery centers, in most cases local delivery, as retailers eventually embrace omnichannel fulfillment. 

            The next wave of retail will involve fulfilling online orders within hours, not days. The key is to control the associated third-party fees, which can hinder conversion for dry use retail.

            6. Micro-Fulfillment 

              Verdict – Survive

              Technology – Using the store as a hub for both local and national fulfillment. 

              Observation – The pandemic was the impetus for retailers to set up their online presence in the wake of store closures. This accelerated many retailers to pivot to omnichannel fulfillment by leveraging their physical spaces as fulfillment centers.

              Per Anne Mezzenga, the Co-founder of Omni Talk and former Executive at Target’s Store of the Future:

              “COVID accelerated the rollout of BOPIS and converted the stores to fulfillment centers which were in the works for a few years. We are starting to see this trend where industrial centers or warehouses have been converted in pick up only centers by major big box retailers.”

              Correspondingly, for independent retailers, the ease of integrating their ecommerce and POS systems is easier than ever using services like Shopify’s POS system that is directly connected to the ecommerce websites backend. This reduces the operational lift of inventory exports and imports using Excel between two channels that were disjointed. 

              While reducing the fulfillment times through optimal use of stores is key, the pandemic has shone light on the importance of human interaction and how physical spaces play a key part in providing an escape from the mundanity of our new work from home culture. The store of the future is not just a transactional channel for commerce, but rather a hub for brand discovery and content creation. In order for stores to survive and thrive, they need to look at store design beyond the norm of placement shelves, cabinets and clothes racks while innovating beyond the banal store within a store or mini-mall concept.

              Experiential retail will evolve beyond buzzwords

              Functionally experiential stores will be the new norm for non-grocery, dry-use retail. 

              For example, Brik + Clik creates dioramas of a home such as bedroom, bathroom, living room, or kitchen. Then, products and brands are placed as they would appear in the home. This efficient but elegant store design helps the customers envision the products in their own home, while avoiding the churn of costly store build outs in a mini-mall setting.

              , SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

              The new iOS 14.5 update which lays a greater emphasis on data privacy will make micro-targeting of advertisements more difficult, inhibiting the ROI on paid digital advertisements. The majority of DNVB brands, especially emerging brands with limited budgets, are seeking B&M distribution as digital advertising becomes a crowded space. At the same time, it is important to activate physical stores and give a reason for customers to walk inside.

              7. In-Store Gamification

                Verdict – Survive

                Technology – Enhancing the store experience while engaging customers to interact with the products through discount-based games.

                Observation – Brik + Clik deployed an app called Kysmmet that would enable customers to scan a product, redirecting them to play a digital scratch-off game that provides the customer with an opportunity to win a discount. In exchange, the customer has to provide their email address or cell phone number to checkout with that discount. Games are a great engagement tool online and can equally be applied to an in-store setting.

                While the lines between the digital and physical world blur, the mobile-first customer is seeking digital experiences in real life. In-store gamification is a subset of the wider gamut of a true omnichannel shopping experience, which can be visualized in a virtual reality setting.

                8. Virtual Reality Stores 

                  Verdict – Survive

                  Technology – Virtual reality store to be used as a checkout-enabled, digital twin of a physical store. The goal is to truly digitize them and scale their adoption beyond the store hours and physical location. 

                  Observation – Brik + Clik used the opportunity to test out this unique technology that enables you to browse, learn, and shop in a virtual store that is a lifesize replica of a physical store. A closed beta yielded a slew of orders as the customers were enamored by this unique technology.

                  As Kate Kyung-ha Lee, Associate Principal of CallisonRTKL states,

                  “VR technologies would have widespread adoption if the platform was a cellphone instead of hardware, like goggles.”

                  [embedded content]

                  Autonomous stores are not completely scalable

                  Brick-and-mortar stores suffer from the stigma of non-scalability, with fixed staffing costs as one of the biggest cost drivers. Although checkout-free stores are being rolled out, the cost of the sensors and associated hardware is a tremendous capital investment that most retailers cannot afford, and these autonomous stores are still bound by store hours.

                  However, a checkout-enabled VR store provides true scalability as it can be accessed from anywhere in the world through a mobile device, while also being autonomous and unbounded by store hours.

                  As Brandon Singer, co-founder of MONA puts it,

                  “The pandemic hit those stores the hardest who looked at ecommerce or innovation as a competition rather than as a compliment.”

                  Karen Strach, the VP of Marketing at Unibail-Radamco-Westfield adds that,

                  “VR experience was key when we leased our billion dollar Valley Fair center in Silicon Valley to help retailers see that vision of the center and walkthrough the retail spaces, the restaurants, and even down to the parking spaces.”

                  9. Live Shopping and Events

                    Verdict – Survive

                    Technology – QVC-type live shopping content packaged in a Gen Z and millennial format that inspires impulse purchases during store closures, while leveraging stores as production studios

                    , SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

                    Observation – Social commerce and content commerce have seen exponential engagement.Per eMarketer, US retail social commerce sales will rise by 34.8% to $36.09 billion this year, representing 4.3% of all retail ecommerce sales.

                    Instagram and Pinterest have taken the prime position as platforms for the distribution of this content. However, TikTok, Facebook, and Snapchat are expanding their product offerings to meet this demand. Validation by peers is becoming the defining factor in driving conversions.

                    As Brian Folmer, the Founder of FirstLook Venture Co. puts it,

                    “Consumer psychology says that it takes us a few times to hear something before it resonates with us, so it’s nice to see your friend buying a product which validates it for you that if they are behind it, it must be a good product.”

                    Although social commerce has seen a steep increase in engagement, the production of live shopping is not scalable by its very nature. Anything on-demand is basically a video streaming platform which while being effective, is not innovative and is a monopoly at this stage. However, it still has the potential to be an integral part of social commerce.

                    A good compliment to live shopping is a virtual appointment to help brand discovery in a more intimate setting for returning customers, and these have a higher probability of conversion.

                    10. Virtual Appointments

                      Verdict – Dies in the long term 

                      Technology – Another byproduct of store closures that would facilitate sales for an exclusive and intimate sales experience. The use cases include product recommendations, size and fit, and help with gifting to name a few.

                      Observation –  Such services seem unsustainable long-term and engagement has dropped since the stay-at-home orders started lifting. This is both a niche and unscalable model in its current form—the returns on the training along with its human-driven nature make it an offering that would only work for high-end luxury retail and not necessarily a mass market product.

                      While these appointments seem like a function of the pandemic, the true litmus test would be if these appointments have engagement levels when the mobility restrictions are lifted. People have short-term memories, so there is a case where customers revert back to traditional in-store shopping with a smaller base of customers still preferring in-home virtual appointments for a myriad of reasons. However, it is difficult to envision this having a mass market appeal.

                      11. Smart Mirrors and Smart Lockers

                        Verdict – Smart Mirrors (Die) / Smart Lockers (Survive)

                        Technology – Smart mirrors: Interactive displays on a wall or a changing room that are dynamic and provide product suggestions, allow you to virtually try on clothes, or call for an attendant—this removes a lot of the current friction in the sales process. Smart lockers: An automated hub that acts as a point for seamless in-store pick up of online orders or dropping of returns.

                        Observation – The high capital expenditure in these technologies along with the consumers’ preference towards engaging content on their cellphone is a deterrent to the wide scale adoption of these technologies. Hardware that takes up physical spaces usually gets disrupted by a combination of smaller hardware (cellphone, smart watches) and software solution. Remnants of these concepts might exist or a large format rollout in a niche sector such as high-end apparel might very well be probable. However, this fails to meet the criteria of a large-scale rollout.

                        On the other hand, smart lockers had a high adoption rate at the Westfield Valley Fair mall in Santa Clara, CA as they were used both by customers to pick up their orders or for retailers to have supplies delivered during non-store hours. The dual function of dropping off returns or picking up orders solved a variety of pain points for the end user with high engagement rates.

                        The future of shopping can only be envisioned through an iterative process.

                        The volume of predictions and technology proponents is high, but there is limited empirical evidence that all these technologies will be adopted. The lower levels of foot traffic during the pandemic has enabled Brik + Clik to look at each technology and its adoption with customers on a more intimate level. There is no denying that the store of the future will be an agile hub for delivering orders within hours rather than days. Correspondingly, smart lockers or an automated returns process/pickup points will continue to evolve with the cost of their production eventually going down as its demand scales.

                        Seamless technologies like NFC tags and digital receipts will find use cases across multiple store operations and channels. Live shopping, while not a novel concept, is tried and tested. Innovation will center around packaging the content in a target-demographic-friendly way and distributing it via mobile devices. However, it’s not a scalable solution.

                        Finally, the post-omnichannel, and specifically post-ecommerce, solution is converting stores into shoppable and checkout-enabled virtual stores. These stores are an autonomous digital twin of the physical store that are accessible from across the world and unbound by store hours. These stores provide a dynamic and 3D ecommerce experience that can be programmed with background music, links to live shopping events, or virtual appointments.

                        While these are a snapshot of some of the technologies that most retailers have adopted or accelerated development of during COVID, the retail experience is still anchored in fundamental human behavior. Humans are social beings that thrive mentally in the presence of other humans. Retail is a medium to amplify these interactions and technology will always be a great compliment, but it cannot ultimately replace the physical store experience for non-grocery dry retail formats. 

                        Share This :