How to Be the Retail Rule, Rather Than the Exception
A recent Accenture survey revealed that 77 percent of Gen Z respondents prefer to shop in brick and mortar stores. Despite never knowing a world without internet or cell phones, research shows that in-store smart technology does not resonate with this generation as deeply as many would like to believe. Unimpressed with smart dressing rooms and payment solutions, younger generations are flocking to stores for the in-store experience -- while using technology as an aid. Today, traditional retail must bridge the gap between physical and digital. This cannot be achieved by eliminating key roles in the shopping experience, like Amazon Go has done by removing cashiers. How, then, does Amazon Go, almost relying solely on technology, fit into the future of retail? Additionally, and perhaps more importantly, should other retailers follow Amazon’s lead?
Amazon Go, isn’t a “go” for every brick & mortar
The novelty of Amazon Go has caused a stir in the global retail conversation. Some see it as another sign of the impending demise of careers in retail. With Amazon Go, the pendulum has swung far to the side of self-service as the company has maximized on technology and eliminated the value of face-to-face interactions. This is not a recipe for success for every retailer. This kind of disruption in the retail industry will likely cause a shift, with most retailers falling somewhere in the middle of the two extremes: tech-enabled self-service only or no tech-enablement at all. Thus, programs like Amazon Go’s will coexist with human store associates within traditional retail.
As members of Gen Z come of age, wise retailers should continue to invest in their people and the technology to aid associates rather than technology to eliminate roles.
Generation Z + Technology
As retailers begin to incorporate “smart” technological innovations, they will have to do more than have the newest or coolest gadgets throughout the stores to keep a younger shoppers showing up. Especially as Generation Z, which will exceed 2.6 billion people by 2020, continues to gain purchasing power. According to the FGRT, younger shoppers expect their in-store shopping experience to be “fun” and filled with “live events,” -- which cannot be achieved through technology alone. They also expect the sales associates aiding them to be relevant and engaging.
There is no silver bullet. Instead, retailers should look for foundational technologies on which they can build programs. Retailers can meet the personalization needs of Generation Z consumers through smart technologies like indoor mapping and chatbots.
How retailers can employ smart technology
By employing an indoor mapping solution and useful smart technologies like beacons and chatbots, retailers then enable shopper engagement. Through enablement a retailer can gain access to shopper insights and ultimately optimize store operations. The data collected through applications built on in-store mapping provides insights into customer preferences that retailers can apply to all aspects of their business:
- Productivity: Store associates hold many roles such as stocking and restocking shelves, assembling and moving displays, and, most importantly, aiding customers. This requires more than a simple “yes we have it,” or “no we do not.” To increase efficiency, retailers should employ technology to aid store associates. By giving them handheld tools to engage with shoppers, they can create meaningful experiences when approached. Whether the associate can provide immediate and correct product location or shipment information if a product is out of stock, the interaction will be valuable to the customer.
- Merchandising: The immediate value a mapping solution can provide is the ability to locate products while assuring customers that a specific item is available at the store prior to entering. Making sure this information is up to date, reflecting near real-time data, ensures the store can rely on location data for merchandising and data-driven optimization.
- Marketing: Retailers can make better strategic decisions about where to place merchandise and in-store marketing materials from the insights they gain from technology. Location-based solutions provide retailers with the powerful ability to increase touch points by delivering messaging and services from brands based on a customer's location in the store. Making digital store maps available can increase the chance of purchase and significantly increase basket size for smartphone-enabled shoppers.
- Messaging: Chatbots are an additional solution that retailers can leverage to gain insight into shopper habits. Chatbots offer a new channel of conversation between the retailer and the self-service shopper. Ideally, the chatbot can reach a wider audience than messaging apps like Facebook Messenger and SMS. They can also increase the consumer experience by accurately answering questions. For a retailer, they provide additional value in cross-promoting other digital channels the consumer is not using, such a store specific app.
Be the retail rule
As Generation Z prefers in-store shopping, retailers must be smart with the technology they incorporate. Amazon Go uses some of the flashy tools that is less than impressive to this generation. While Amazon Go is novel, it is not the absolute future of retail and is not easily replicated. Wise retailers will invest in technology that aids associates and allows them to actually listen to consumer needs through data. By doing so, a retailer will not have to worry about exceptions such as Amazon Go, because they will have already raised the bar for the retail industry’s rule -- better shopping experiences.