By Frank Quix, managing director, Store of the Future
When “Store of the Future” (SotF) was conceived in 2014, physical retailing appeared to be coming under heavy siege by online. The atmosphere was gloomy with many predicting the death of high street shopping. Our instincts, guided by our experience in physical retailing, urged us to take a step back and question whether the problems were genuinely all due to online cannibalism. We suspected a more nuanced explanation: that online was changing people’s expectations about the whole shopping experience, including the role of the physical store. If that were the case, then the solution would lie in re-imagining and redesigning retail spaces to meet these new expectations.
The first way to test that theory was by conducting research. Q&A research in the Netherlands asked Digital Natives (who never knew life without the internet) what they thought shopping would be in 2030. Amazingly 69% said they will shop offline, a higher percentage than that reported by the Baby Boomers who were also surveyed. We were intrigued by how Digital Native youngsters described the store as a ‘playground’ where they can go to test out brands and products and also meet their friends. Forty-two percent of the Millennials (in contrast to 29% of Baby Boomers) said that it’s a brand’s “story” that sells, not the store.
Armed with these fresh insights, SotF was launched in The Haag as a ‘living retail lab’ in which to test how new technology performed in a real physical shopping environment. More than 15 retailers including Nike, the Dutch brand HEMA, which is expanding rapidly in the UK, and myMuesli, a German retailer of custom-blended Muesli, took the opportunity to ‘game’ within SotF using bleeding-edge technology provided by 90 different partners. It became a “playground for brands and products” inspired by the Digital Native’s vision of retailing’s future.
Setting up this retailing playground made us appreciate just how distant today’s physical retailing experience is from this new way of interacting with customers. Especially for the staff working on the shop floor, most retail environments are highly stressful. The kind of people attracted to working in retail get a buzz from interacting with people, selling and giving great service. So when they can’t do basic things like serve customers fast enough, recommend the right items, run successful promotions or keep popular items in stock, they go from being keen brand ambassadors to becoming totally demotivated. After all, who wants to look incompetent or have to make excuses?
Technologies that empower staff
The SotF project revealed that new retail technologies are at least as valuable for empowering retail staff with information and stories as they are for customers’ entertainment. Using video analytics technology from Prism Skylabs integrated into AXIS IP video cameras we were able not only to accurately count how many visitors came in, but also to identify which ‘hotspots’ in SotF were most popular. The areas that pulled in the most traffic had products or technology that shoppers could test and physically interact with. For example one major hotspot was a station where visitors could ride a bicycle wearing virtual reality goggles that showed simulated landscapes. Another very popular station let people try shirts on with embedded wearable technology that simulated the physical thrill of playing in a professional women’s rugby match.
The test stations improved the dialogue between shop assistants and customers as Ank van der Zalm, manager at the Store of the Future, explains: “The interactive stations have the effect of shifting customers’ focus from the sales assistant to the product. By adding new ‘terrain’ to the buying journey and providing a common talking point, the stations make the overall atmosphere more relaxing.”
Other technologies directly relieve the pressure shop assistants feel of having to specialise in every product. Second screens, for example, let customers connect directly with subject matter experts who can be located anywhere on earth. An augmented reality app that lets shoppers virtually ‘place’ a sofa into their living rooms to see if it actually fits delights the customer while relieving the sales assistant from having to speculate using limited information.
“A lot of the technology in the store contains detailed information about the products”, explains van der Zalm. “An interactive white table that we used to help sell wines, for example, provided information using video and audio that gave the whole sales conversation a playful easiness you don’t find that often in retail.”
Will robots take over retail?
Across business and in popular culture there is understandable insecurity and fear over whether technology and robots will steal jobs – and the retail industry is no exception. However, our experience at SotF led us to believe that when it comes to ‘high involvement’ purchases that require complex decision-making, technology empowers retail staff by supporting them with practical information and helping to communicate product benefits.
Even when technology takes the form of actual robots or virtual sales assistants, which appear to replace humans, their role is to trigger customers to interact as van der Zalm explains, “It’s more a point of interest. When people ask, “What is this?” and the robot starts talking to them, they are more easily drawn into the sales process. So yes, robots will be a part of the future of retail but we think they will help assistants to close sales and act as brand ambassadors.”
Video analytics to reimagine and redesign spaces
The SotF project revealed that one of the most important technologies to help retailers prepare for the future is data analytics. Although it won’t excite consumers anywhere near as much as robots or virtual reality, analytics provides vital information to the store manager and floor staff about how they can improve the in-store experience for customers and generate more sales.
The Prism system installed in SotF combined analytics and video to generate exactly the same information available to online stores. According to van der Zalm, “When we have data about visitor numbers, where shoppers go and the products and displays they touch and feel, it’s possible to continually adjust things like pricing, promotions and staffing to make a better atmosphere in the store, and of course to sell more.”
To make the most of video analytics, retailers do need to invest in training its people. When shop assistants are given tablets to use on the shop floor and taught to understand and act on data – including that collected from cameras – work becomes a win-win situation for everyone. Suddenly they can see the effect on sales that their changes are making.
Despite the pivotal role they played in SotF, even the cleverest technologies will fail if they don’t appeal to customers. When that happens it’s not because customers aren’t ‘with it’ or incapable, but because the technology was poorly conceived or undesirable. In these cases, video analytics can help retailers to better understand why certain technologies aren’t catching on.
It’s all about the people
Perhaps one of the biggest learnings from SotF is that in the end, it’s all about people. Stores in the future will depend on staff members who aren’t just there to conduct transactions but to inform, educate and, yes, even entertain. We’ve seen how technology helps to empower employees to make smart decisions and feel like experts so they turn into successful, passionate brand ambassadors.
So it’s not that the reports of the high street’s imminent death were premature, they were wrong. We are tremendously excited about the new role that stores will play in the brand journey and see a much brighter future in which retail staff have fun and fulfilling jobs.
The Store of the Future project in The Haag is now closed however retail industry professionals are invited to visit the new B2B Store of the Future showroom in Amersfoort, NL. Visit http://storeofthefuture.nl/ for more information.
(A Retail Times’ sponsored article)