How Technology Is Changing Shopping…Again
The convergence of disruptive technologies will drive further changes in how shoppers behave and will place even more information and power in the hands of consumers.
- The purchasing experience: The old, linear purchase funnel has turned into a more complex journey as shoppers explore all online and offline possibilities, consult their social media connections, and (eventually) select and purchase.
- Webrooming: Retailers have been plagued by the “showrooming” phenomenon—shoppers kicking the tires in a store, and then buying online. Showrooming is giving way to “webrooming,” in which online shoppers complete purchases in stores. This is an opportunity for retailers that can provide seamless online/offline experiences and Amazon-like in-store fulfillment.
- Click-and-collect: home delivery, with its longstanding hurdles, is being circumvented by in-store collection and strong demand for click-and-collect is forcing some internet pureplays to open physical stores.
- Subscription buying: Services such as Amazon’s Subscribe & Save offer discounts on regular purchases of staples such as cleaning supplies.The Technologies
- Sensors and MEMS. Tiny sensors are used in smartphones and other devices to gather data aboutthe physical world, including location and movement, enabling “Internet of Things” applications for in-store promotions and back-room efficiency.
- Mobile apps. More than a billion smartphones are sold every year and developers are creating apps for every imaginable use—including for anytime/anywhere shopping.
- Cloud computing. The ability to store data and tap into remote processing power and other remote resources in the cloud makes complex smartphone apps possible. The cloud also provides flexibility in IT operations and access to capabilities that retailers don’t have in-house.
- Beacons. Compact, inexpensive Bluetooth transponders can be installed throughout stores and other spaces to provide continuous connectivity with consumers, track activity on the shopping floor, and transmit data to consumers and associates.
The Store of the Future
As the new disruptive technologies spread, stores could well morph into hyperconnected environments in which the digital and physical worlds meet.
- In-store offers: When a consumer walks into a store, beacons identify her by detecting her smartphone. Based on her profile, the store can offer coupons, shopping tips and other suggestions.
- Self-serve options: Armed with a mobile phone in a store (or using an information kiosk), a shopper can continue to browse online and order merchandise for pickup or request that a particular dress be placed in the changing area for her to try on.
- Clienteling: This involves equipping associates with tablet computers, which can be used to tap into data about customers, suggest items and even allow customers to pay.
- Automated inventory: Using sensors to automatically determine what is in inventory, retailers can replenish stock when it is actually needed, rather than according to a schedule, thereby avoiding stock-outs and limiting markdowns.
- Online/offline fulfillment: Stores will need to provide a seamless, omnichannel experience for cross-channel shoppers who want to collect or return purchases in store.
- Mobile payments: New payment systems are emerging, including touchless cards and mobile payments that are made with smartphones. Eventually, checkout could be completely automatic— with scanners totaling up all the items in the shopper’s cart and automatically debiting his mobile money account.These disruptive technologies create challenges for retailers: they are not cheap to implement, they are still evolving, and they require new business models and capabilities. There are also barriers to adoption that retailers must consider, including privacy and security concerns on the part of shoppers. Overcoming these obstacles will take time, but retailers that do not learn to master the new technologies will be victims of disruption, rather than the disruptors.
To read the full report click here.