The principles of our current retail structure to design a layout to get as much stock on the floor as possible and the customer needs to pay at the designated location, which is often at the front of the store that often brings long lines and delays.
In the early days, we had Shopkeepers greeting customers at the door, which allowed a much more personal perspective, and they could direct the customer to the right product or help with any queries. During the 1990s, it was more about packing the stores with products with pure disregard for the shopper experience and more about the movement of products out the door.
Now, the trend is towards simplicity and creating a store layout that is more user friendly and allows consumers to touch and feel products without feeling overwhelmed about the amount of stock. Which in theory allows the shop assistant to give better assistance within the store.
Some retailers are indeed embracing the layout of their retail stores. The Apple Retail Store is the perfect example, products rule the space. The checkout process is secondary but is done on the spot, via a cashier.
Retailers are figuring this out, its all about customer service, which is something that you can’t find buying online and are now taking advantage of. Warby Parker are doing a similar thing to Apple. Products are displayed around the store, with lots of space for customer and shop assistants to mingle and discuss the product.
However, The Gap Retail store, is slowly moving, it often takes up valuable space with guard barriers for customers to line up and wait to be served at the check-out. This results in a bottle neck and a disappointed customer experiences. There are retailers that have trying something different, like the line busters’ functionality – which enables the sales assistants to walk around with tablets or iPads and assist customers in checking out. But that is really a Band-Aid solution and it doesn’t solve the problem of long lines.
Amazon overnight have changed this and completely ignited the retail industry again.
A Bit of Context
AmazonGO is an electronic retail store that allows the customer to scan the app to enter the store and then shop and simply leave. No lines and no checkout.
The key elements of the Amazon GO platform is customer identification. They use technology, like sensor fusion and computer vision that scans and identifies the user entering the store. As Amazon has the customers card details, its simply a matter of matching the product to the customer.
How can they assign the right product to the right customer? Using buying behavior and machine learning, Amazon can predict what type of product the customer will choose. There is a certain level of risk in there, that the wrong product is selected, and Amazon undercharge the customer, but I can imagine the price point for the products within the store are very similar.
Edge Case – is probably how the customer is identified in all situation, like wearing a baseball cap? How does Amazon know who they are? What about the identification of the product the user is selected. Can the customer pick up a product, put it down – then someone next to you pick it up. Is the system smart enough to know? I spoke to someone the other day, that said – the store has a lot of camera’s in it. Will this become an issue? Customer privacy.
Other Retailers
This has really made other large retailers open their eyes and embrace technology to compete with the ever conquering Amazon.com. There are many headlines and focus on the personalization of the customer journey. This is the right focus, Amazon have done it for the last 20 years, building the process not only to ensure the payment aspect of the check-out is friction less, but also what the customers want to buy. They’ve done this by AI – which is in the form of products recommendations.
The space is really open for tech companies to build a platform that can plug into any retailers platform to help them grow and compete. The biggest challenge for tech firms is that they need to strike a balance between product features and retailer control. Most retailers want control of their data but often don’t have the resources or ambition to build in house. So tech firms need to be able to find that sweet spot where they can offer the right product mix but allow retailers to control and dictate on how it works.
Many large retailers are investing in In-store beacons that allow retails ton initial capture additional information about what the customers are doing within the store, but also push information to them by offering coupons and discounts.
The UK retailer House of Frazier have recently announced they are investing in a challenger bank in the UK, Tandem bank. This is a bold move for an old traditional retailer, who are commonly known for instore activities rather than a cutting-edge mobile only banking system. These signals a few changes in two industries. Banking – which has already seen several mobile only banks rise (well, start – growth may come) and Retail – which overall is declining. This is evident in the US with Macy’s and Australia with Coles and others taking out several other smaller players in the market. This highlights the convergence of mobile activities and great user friendly designs with a physical presence and the brand equity in a large retailer that has the trust of the customer, and they’re ambition to explore other opportunities, like small business loans or insurances during the shopping experience.
Square can really take a great step here in the future store – they have the technology, hardware and capital to explore and expand functionality to enable the SMB around to US to enable customers to gain the payment journey that the Amazon Go store have opened the door to and all can expand on.
The functionality can be quite easy if Square were to configure their NFC device to accept a non-payment transaction, like a $0 AUTH transaction and also enable the customer to pass non-payment information to the merchants to determine a customer specific price.
I hope to see this soon
Reference
- http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/digitizing-the-consumer-decision-journey
- https://www.internetretailer.com/commentary/2015/04/08/digitizing-store-breaking-down-onlineoffline-mentality
- https://www.thinkwithgoogle.com/articles/five-ways-retail-has-changed-and-how-businesses-can-adapt.html
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