It’s hard to overstate the value of data (opens in new tab)-driven solutions in the retail space, and even more so when it comes to the future of store automation (opens in new tab).
For retailers, in-store automation promises a new way to stave off the ever-present – and ever-growing – challenge posed by today’s online retail giants. This is about evening the field – and then some.
Christian Dornacher is Director of Smart Spaces & Lumada Video Insights for EMEA at Hitachi Vantara (opens in new tab).
Until now, that storyline was roundly dismissed as an exercise in wishful thinking. But by embracing the convenience and data-driven aspects that have made their online counterparts so compelling, retailers can finally hope to write a new narrative.
With the deployment of new technology, retailers have a powerful weapon to win the brick-and-mortar game as they provide customers (opens in new tab) more convenience along with a measurably better shopping experience.
For example, store automation will allow retailers to better focus on inventory while building new services with existing personnel. And when it comes to managing their in-store operations, stores will be able to assign employees (opens in new tab) to more value-added tasks while the system takes care of responsibilities that previously required more hands-on attention – no small consideration at a time when retailers are finding it hard to staff entry-level positions.
That’s no longer wishful rumination. For example, a leading multinational pharmacy chain recently adopted automated shopping technology to cater to consumers’ demand for a better retail experience. Now, customers enter a store or a dedicated, cordoned-off section of a store using an app (opens in new tab), a QR code, or by scanning their finger. Customers can then pick up the items they want and walk out while their account is automatically debited.
Deploying the right technology
This is a sharp difference from other recent automated shops – or “a-commerce” initiatives – that rely on video technology. These automated shops often feature a ceiling full of cameras to track customers and their purchases. For many shoppers, such intrusive surveillance is seen as a violation of their personal privacy (opens in new tab).
Video-based analytics systems also have technical limitations that can present challenges. Insufficient light, for example, can inhibit a video system’s ability to detect and measure product movement and shopper behavior.
Rather than using video, retailers can now use lidar sensors to analyze customer choices as they navigate a store. The sensors know when a product gets picked off a shelf, when it is returned, or when it leaves the store. Lidar sensors are not only less cumbersome than video but are compact, unobtrusive, and create their own light. For retailers anxious about privacy and costs of video, this provides a solution that only creates a 3D laser point cloud, and costs 40% to 60% less than the video-based systems found in leading a-commerce stores.
Individual security is paramount as the lidar deployment doesn’t capture shoppers’ personally identifiable information, but the entry scan creates a digital shopping cart (opens in new tab) with a unique token so the payment provider knows who to charge. Shopper movements are tracked only by the shape of a person – i.e., no personally identifiable information is captured, offsetting worries about privacy.
The 3D sensors work in concert with smart shelf technology that recognizes the merchandise that customers choose.
With this technology, hybrid automated and conventional checkout stores can offer flexibility and options for shoppers who aren’t early adopters. And self-contained mobile automated shops can bring retail options to festivals and other remote events.
Offsetting the labor shortage
As people have returned to the job market, retailers continue to struggle to fill many positions. While it’s still too early to know whether the latest exodus signals a long-term shift away from retail work, the type of automation we’re talking about can give retailers a way to bridge the gap during this transitional period. Store automation won’t eliminate jobs so much as it will help eliminate monotonous tasks that have traditionally been associated with entry-level work. By letting technology take those responsibilities, stores can then deploy personnel in more rewarding, operational, or customer facing assignments. Automation will also free some employees to provide better customer service and new services that they weren't able to offer previously.
In practice, it means that retailers can conduct 24/7 operations without needing to augment staffing to meet demand fluctuations. Staff members are freed to focus on inventory and customer service. In other words, technology should be taking over tasks, not jobs, and making life more predictable for managers and staff. This all works to enhance an organization’s bottom line. Take, for example, the experience of one retailer that uses a lidar-based automated shopping setup. At certain times of the day, large numbers of customers would linger in front of store shelves, but employees were too busy to ask if customers needed help. With this insight, the retailer shifted its staffing, so more workers were available to aid at peak times. Sales rose 15% – a win-win for everyone involved. We’re still at the beginning of this story, but as it unfolds, expect to see more brick-and mortar retailers gaining insights from in-store analytics and workflow automation to more easily understand and act on the data they collect.
Given most brick-and-mortar retailers still lag their online-only counterparts in using advanced data-driven decision-making, that will constitute a sea change that goes far beyond the point-of-sale and inventory data that used to define “modern” retailing. Soon, all brick-and-mortar retailers will have an on-ramp to easily achieve a touchless and more convenient shopping experience without raising the worry that Big Brother might be lurking in the background.