2016 connected store technology trends

store trends

The digitalisation of high-street retail is an exciting area of analogue to digital transformation. It can also be pretty confusing. 

Data, IoT and mobile are increasingly impacting on bricks-and-mortar stores, but when to invest and what technologies are going to be genuinely useful remains a relatively unanswered question. Some of the ‘sure fire bets’ of 2015, such as Beacons and AR failed to dent retail reality. 

Only time will tell which emergent store technologies will prove truly useful and valuable. However, for those looking to innovate and invest time and money in new retail tech this year I’ve put together my best bet on what to back and what to avoid.

Retail innovation trends you shouldn’t ignore:

Mobile Payments

It seems to me that mobile payments in retail are an obvious win-win. On the one hand they deliver customer convenience and on the other they tie CRM and loyalty activity into the offline channel. While barriers remain, adoption is growing and the vision of mobile payments that seamlessly integrate with Single Customer Views and loyalty/CRM efforts is within reach.

Paying is a pain, but not doing it is unfortunately illegal.

Perhaps the most fundamental advantage of mobile payments in stores is that they bring genuine customer value. The check-out process is a very necessary but very boring and often lengthy part of the retail journey. Even the most ardent shopaholic wouldn’t confess to enjoying queuing at the till. Moreover the staff contact at the point of purchase doesn’t usually add value, it’s purely transactional. Same goes for restaurants and other leisure environments. Paying is a pain, but not doing it is unfortunately illegal.

I see mobile payments as offering two levels of valuable convergence or dematerialisation. The first level is the mobile device replacing cash, payment cards and loyalty cards. The second level is the mobile device going further and replacing the till hardware and traditional payment journey with it. By that I mean M-POS as well as older style tills – a mobile tablet that takes payments is still a till that requires an operator. 

At Omnifi we’ve begun the mobile payments journey with our client, The Restaurant Group. Stage one is porting and enhancing their loyalty/rewards scheme to a mobile loyalty app, which involves integrations with their existing offer and CRM platforms, which was achieved late last year.  Stage two is integrating the loyalty app into their new restaurant ordering system to enable pay-at-table.

Our phase one mobile loyalty app for Frankie and Benny’s.

Ok, so mobile payments make sense strategically, but why bother in 2016? Three reasons, firstly Apple Pay is gaining traction, contactless cards have taken off (and for consumers are a ‘psychological gateway’ into mobile payments) and the gradual upgrade of till systems means more and more retailers can now accept such payments without clunky work-arounds.

Single Customer Views and personalisation

Data is going to be a big deal in physical retail, especially if you’re running a multi-channel operation. Right now stores can be a bit of a black hole when it comes to tracking customer activity, but the spread of in-store WiFi, mobile and RFID based loyalty and payments (and clever services like yReceipts) means that a more detailed view of in-store behaviour is gradually becoming a reality – even for those struggling with antiquated EPOS systems.

Getting a ‘single customer view’ is potentially hugely powerful for those who operate and communicate across multiple sales and marketing channels. It means that the single brand that the customer sees and buys into can finally start talking to them with the same voice, accuracy and authority wherever they might be shopping.

Giving customer behaviour data to store staff opens up the possibility of ‘old fashioned service through technology.

Knowing a shopper’s purchase history and preferences, what they have been looking at, their loyalty level or if they’ve had service issues in the past, and then turning that into actionable staff facing insight is a fantastic use of big data that delivers powerful but almost invisible customer service personalisation. Taking customer behaviour data, analysing it and giving it to store staff via tablets or the till opens up the possibility of what I like to call ‘old fashioned service through technology’. A powerful blend of CRM and retail CEX with a human face.

This bonkers ad from Thunderhead neatly shows the power of CRM data to improve customer service and experience in-store.

There are also those that believe that this type of SCV data can be harnessed to deliver real-time marketing in-store. If you want to get a glimpse of this brave new world of data and AI driven predictive communications then I recommend you book a session with Smart Focus who took me through their platform last year. It’s impressive, and will have marketeers salivating – but whether this fairly invasive real-time in-store push messaging is going to sit well with shoppers remains to be seen.

Store analytics and IoT

In addition to being able to gain a better understanding of individual customer activity, new digital measurement technologies are also opening up the prospect of being able to apply the kind of measurement and analysis you get on an eCommerce site to the physical store.

This emergent technique is called Store Analytics and draws on a number of IoT technologies to build up a detailed and real-time picture of store performance. Literally anything can be measured, from footfall and dwell time via WiFi and Beacons (and even floor sensors) to on-shelf product interaction via Video cameras.

Omnifi implemented footfall tracking via WiFi last year with TUI, and have also been experimenting with passive micro-sensors that can measure, amongst other things, proximity, pressure, heat and electrical activity. These IoT sensors can also be used to trigger experiences, a simple example being the proximity triggered mirrors and interactive drawers we installed in The Story Shop for World Vision in late 2015.

story shop
IoT sensors we mounted in the screens and fixtures of the story-shop add unique interactive experience elements to this ground-breaking concept.

It’s early days, but combining IoT devices with store analytics and single customer view data opens up the possibility of truly ‘responsive’ retail environments. These are scenarios where the store can actively listen and respond to shopper activity in real time and over time on both a micro (personal) and macro (general) level.

And before anyone says ‘Minority Report’, responding and reacting doesn’t necessarily mean bright screens and shouty communications, it could mean silent notifications to staff tablets or subtle changes in lighting. Sometimes the best interface, especially in high-touch retail scenarios, might be no interface

Offline/Online integration

In 2016 most sizeable retailers have fully mobilised websites with oodles of online content like product info, extended range and customer reviews. However most still don’t have a way to explicitly deliver this to connected in-store shoppers. To check prices, availability, other styles, online reviews and product info in-store most shoppers either have to ‘DIY’ by going onto the retailer’s standard mobile website, using a clunky kiosk or bothering a member of staff.

I believe the most fertile and achievable area for Retail Innovation in 2016 is going to be effectively bridging the (relatively small) gap between offline experience and online content. Many retailers have incorporated barcode scanning into their apps for this very purpose, but as we shall point out later on apps are not the silver bullet when it comes to offline/online integration for one simple reason – not everyone wants to download them.  

At Omnifi we’re in favour of a ‘thin layer’ approach here – small pieces of innovation that link up the investment made in the retailer’s online platform with existing infrastructure like WiFi and shopper’s own devices. Our Portal+ product is built on this principle and we expect it, and similar innovative, non-app reliant solutions to come to the fore in 2016.

Retail innovation trends that you could probably ignore

VR and AR in real stores

I have a fundamental problem with Virtual and Augmented reality in physical retail environments. Why go into a real store to experience an unreal product? Why enclose yourself in a headset or view the store through a screen? Surely the purpose of a shop environment (especially for the high-end goods that merit VR and AR investment) is that you can touch the goods, see the goods, maybe even smell the goods all within a carefully designed and branded interior.

True, VR headsets are going to come down in price as competition and range increase, but the fact still remains that nothing looks sillier than someone standing in store wearing a headset or trying on clothes virtually in a real shop.

At a push I can see that VR and AR is good showing stuff you can’t get into a shop, like a beach holiday or the inside of a proposed housing development, but really these are edge cases and VR and AR in real stores is a gimmick best left to eCommerce sites, video gamers and PR stunts.   

eyeglasses
Virtual Vision Sport virtual reality eyeglasses at the Consumer Electronics Show in Chicago on June 4, 1993. Ridiculous then, ridiculous now. From Paleofuture.

Beacons

Looks like the Beacon hype that engulfed much of the past two years has fizzled out in the face of reality. Beacons are a perfect example of technology ‘noise over need’ – who wants to be pinged with alerts, keep their bluetooth on all the time or even download that Beacon enabled app in the first place? I highlighted the Beacon pitfalls back in 2014, and am pleased to say I’ve been largely proved correct.

In all seriousness, Beacons could be very useful, but the technology is too embryonic to pay dividends for most retailers. The principal usability barrier being that you need shoppers to download an app to interact with them, and not just any app (like you can with QR codes), but a specific app for that campaign or retailer.

Now, if you are lucky enough to have a large pre-installed app base then maybe you might consider using beacons to trigger ‘in-store’ modes and experiences, or help customers navigate your store (if you operate out of a massive hanger or think traditional way-finding is passé). But let’s face it, most shoppers walking into your stores won’t have your app installed (or Bluetooth enabled), so until Beacon functionality becomes available at OS level, then it’s going to have limited usefulness for customer comms and service and should be considered as a bolt on feature for an existing app rather than a ‘thing’ in itself.

We’ve not even touched on the fact that most Bluetooth campaigns seem to based on glorified high-tech promotional spamming, but that’s not really a technical barrier, it’s a lack of creativity and customer empathy.  

Retail Apps

Bit of a controversial one, but I would say that most retailers need to think long and hard before hanging their mobile strategies on native OS apps. Apps are great for delivering experiences that pull on native functionality, such as phone cameras, and also useful in that they stay on the phone and enable always-on and contextual push messaging.

But like with Beacons, the app needs to be downloaded and kept on the phone to be useful. Many of our clients are now realising that, while they would like all of their customers to download their app, that is very unlikely to happen in reality. Best case scenario is that your loyal and engaged customers will download and keep your app if it offers some functionality and utility they can’t get elsewhere, but for the rest of your customers, forget it.

If you still don’t buy this argument, perhaps reflect on your own app usage. Do you have an app downloaded for every retailer you visit, or just the ones you visit all the time, or perhaps none at all? Now put yourself in the shoes of someone who doesn’t work in retail or digital and ask yourself, how many retail apps will they actually actively download and use?  

The truth is that retailers probably need a dual strategy, an app with unique features that will be downloaded and used by a core of loyal and engaged users, and a mobile web and e-mail strategy for everyone else. And if you had to prioritise one over the other, then from sheer reach POV, mobile web surely wins out.

While I don’t want to get into the well-worn apps vs mobile web debate (and I am actually promoting a dual strategy for the moment), mobile web is getting increasing app-like in terms of device integration and offline ability, so the pendulum may well be swinging in favour of mobile web longer term.

Further reading:

If you want to keep up with connected retail store openings, new retail tech and the internet of places, do check out our weekly newsletter.

Sources

http://paleofuture.gizmodo.com/heres-how-ridiculous-this-years-ces-will-look-in-2034-1495500665

http://www.retaildive.com/news/why-beacons-bright-light-dimmed-in-2015-and-whats-next/410704/

https://www.linkedin.com/pulse/interface-thinking-beyond-touchscreen-simon-liss

https://www.clickz.com/2015/12/16/eight-reasons-to-prioritize-a-mobile-site-or-web-app-over-a-native-app

http://www.lukew.com/ff/entry.asp?1954

https://www.clickz.com/2016/01/05/web-apps-bringing-the-advantages-of-native-apps-to-a-web-browser

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