5 Technologies Transforming Retail

High street brands are adopting technology to entice changeable consumers

Consumers have never been more demanding. In a world of inexhaustible choice and next-hour delivery, brand loyalty has fallen by the wayside. Retailers must anticipate trends, compete with ecommerce giants, incentivise shoppers, and take advantage of tech… All whilst also retaining less digitally savvy customers.

The challenges faced by the retail industry are plain to see. In a report conducted by the Centre for Retail Research, 2018 was claimed to be the worst year on record for UK store closures. M&S, Morrison’s, New Look, Ted Baker, H&M and of course Toys R Us were among the high street staples affected by plummeting sales.

Despite this, the physical shopping experience remains a huge economic driver. The secret to success, as demonstrated by the likes of Zara and Starbucks, lies with the adoption of customer centric technology.

1) Machine learning

Machine learning – which uses algorithms to make decisions based on data patterns – has given retailers a powerful customer engagement tool. Through historical data analysis, brands can track individual preferences and pre-empt future choices. Cameras embedded with machine learning can detect the gaze of customers and pick up on their walking patterns, leading to a better understanding of the customer experience. There are various options on the market already, including AWS DeepLens and Aurora. These in-store insights could help to target individuals with personalised offers, or alter the way products are displayed at certain times of day.

As well as getting closer to the consumer, machine learning capabilities could revolutionise inventory management. Purchase data can be used to predict demand, avoiding the scramble to restock and therefore maximising sales. Machine vision in cameras could identify which products are available and determine when they will need to be restocked. Rather than causing a complete overhaul of traditional ways of working, technology will influence methods and behaviour.

2) Chatbots

The chatty little bots living in apps and on websites have opened up a novel communication channel between retailers and their customers that is always on, always accessible, and always replies.

The more businesses speak to their audiences, the better they become at meeting consumer needs. Chatbots also aid marketing campaigns, as they learn from user interactions and can suggest relevant products. This, paired with the fact that they store data in the cloud, makes them particularly cost effective. Retailers like Burberry, eBay and Whole Foods have built their own chatbots, but an alternative option is to use ready-made bots from the likes of Slack and Facebook Messenger.

When using chatbots, retailers must be open and honest with their customers. Consumers could easily become frustrated if they mistakenly think they are speaking to a human operative, or can’t get hold of a real person.

3) Cashless

As fewer people carry cash and opt for card and online payments, the cashless society is fast approaching. Retailers have had to respond quickly to the trend away from cash. Most stores now offer contactless and mobile payments, and some even support cryptocurrencies.

Last year, KFC trialled a ‘Bitcoin Bucket’ that could be ordered online for delivery. While customers couldn’t actually buy the Bucket in store, the initiative shows that brands are experimenting with digital payment options.

True to nature, Amazon has taken things one step further by introducing a cashless concept store called Amazon Go. There are no cashiers, no queues, and (in theory) no hassle. If successful, this model is likely to be adopted by other brands. However, the challenge for cashless retailers is not to alienate the silver pound.

4) Facial recognition

Facial recognition is a subset of machine learning, but has incredible potential in its own right. By identifying certain individuals and demographic groups, retailers can find out when, where, and how customers shop. Reactions to certain layouts, offers, and products could be monitored and used to make subtle alterations.

Facial recognition systems are also a deterrent to crime and theft, acting as a kind of hyper-effective CCTV. Another important security application of facial recognition is payments: in 2016, MasterCard launched a new selfie pay app called MasterCard Identity Check. There are now a number of apps that verify transactions in this way.

Back in 2013, Tesco announced that it would install OptimEyes advertising screens at 450 of its petrol stations. The screens send product recommendations based on various facial metrics. The danger is that the technology doesn’t perform as it should and damages the brand as a result. This could mean wrongly identifying an individual, or sending adverts that are irrelevant or even offensive.

5) Blockchain

Blockchain is most obviously useful to retailers in the form of alternative payments – look at KFC’s Bitcoin Bucket. However, it’s not just customers who can use online currencies to make purchases. Smart contracts built on blockchain technology are digital, self regulating agreements between parties that can be used for B2B transactions. There’s less paperwork and less hassle, theoretically leading to smoother exchanges.

Blockchain also makes counterfeiting difficult by tracking each move in the product journey. Richline Group, for example, has adopted blockchain to prove the authenticity of fine jewellery. Aptly named blockchain company Provenance has created a platform for businesses that enables them to do the same. The key here is visibility – customers and partners are increasingly sensitive to moral and ethical considerations, and want to know precisely where products have come from.

Driving customer engagement

Meeting consumer demand in a fast-paced, digital world is only going to get harder… That said, there’s a wealth of technology available for retailers to help them get closer than ever to their customers and make real time decisions based on previously untapped data.

By working out when and why shops are more effective, tech enables retailers to make gradual adjustments based on evidence. Amidst cries of ‘the death of the high street’, the most innovative brands are integrating digital tech into physical stores and building a hybrid experience that will ultimately drive customer engagement.

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