Too often, the future of retail is thought of as an either-or game, with ecommerce and brick-and-mortar stores either competing for consumer attention or catering to totally disparate consumer segments. But the rising trend of autonomous retail proves that digital and in-store experiences are only points on an evolving retail continuum that industry innovators are actively exploring.
The Center for Retail Transformation within the School of Business recently held a webinar on autonomous stores, moderated by Center director and associate professor of marketing Gautham Vadakkepatt. This was the first in a series of planned online events launched in collaboration with sponsor Microsoft.
The panelists were ShiSh Shridhar, global retail lead of Microsoft for Startups; Pawel Grabowski, head of unmanned stores for Zabra Polska, Poland’s biggest convenience store chain; Raz Golan, CEO and co-founder of smart shopping cart solution Shopic; and Daniel Lundh, the founder of Storekey, a platform that powers Lifvs, Europe’s largest unmanned grocery chain, among other retailers.
The speakers underscored that the frictionless shopping experience addresses consumer pain points such as increasingly low tolerance for long queues, aversion to social mixing amid the pandemic, and demands for flexible shopping experiences.
Each panelist took a different route to arrive at a frictionless result. Shopic’s solution adds a clip-on device to existing shopping carts allowing shoppers to scan, bag, and buy items without waiting in a queue. Zabka Polska offers a range of options depending on context and consumer preference, from enhanced self-checkout to fully autonomous stores, while Storekey’s scan & go mobile platform-based solution facilitates round-the-clock cashier-less stores in locations where conventional retail outlets could not survive.
Customer convenience is the most immediate and obvious benefit of these solutions. But the true win-win arises with the deluge of data that results when digital technology supplants potentially low-value human interaction (such as passing grocery items one-by-one to a check-out person). The ability to track and analyze individuals’ shopping habits opens up brand-new possibilities for personalization of the customer experience and optimization for the retailer (i.e., inventory management, assortment mix, etc.).
Privacy being a perennial concern, though, customers must be convinced to hand over their data voluntarily. The panelists were in general agreement that people will gladly do so if they receive value out of it. For example, Lundh described how Storekey and Lifvs got customers in a remote area of Sweden to upload photos of the contents of their fridge prior to opening a store. The company communicated honestly with consumers: It needed to know what brands local households were already buying in order to ensure viable inventory. Both parties, therefore, had something to gain: The company got valuable information, and the locals supported a store close to home that would normally be doomed to failure due to the area’s sparse population.
Interestingly, the panelists reported levels of “shrinkage” (i.e., shoplifting) comparable to those of conventional physical retail. They pointed out that the wall-to-wall digital surveillance of autonomous retail environments is a good stand-in for the often not-so-watchful eye of store employees.
But what happens to the humans who currently scan, bag, and stock items in retail stores? Would frictionless solutions put them out of work? Not necessarily. Instead, it may free employees to come out from behind the checkout counter and really engage with customers, figuring out what they want and introducing them to relevant products. Frictionless retail solutions point toward a future for physical retail that includes both the convenience of digital and tactile, experiential interactions with products. To put it another way, the future of retail will be about customizing data-driven approaches to fulfill customers’ changing wants and needs.
As Shridhar said, “It’s about the power of choice and the evolution of technology to enable those choices.”