When you hear ‘digital commerce’ or ‘e-commerce’, the image that emerges in your mind could be online marketplaces like Amazon or Alibaba.
Retail digitalization is leading to a transformation that helps traditional brick-and-mortar stores to compete successfully in different ways. Unlike many predictions, the arrival of online stores has not led to the disappearance of brick-and-mortar stores.
People go to brick-and-mortar stores not only to buy things that they want. In addition to buying things, they are also seeking a ‘store experience.’
The experience includes seeing or touching the merchandise (and even trying them out in fitting rooms in front of a mirror). It also involves walking around browsing products on display and getting detailed information about selected products. To get that experience, consumers are willing to travel to the store.
However, there are also things that they hate about the brick-and-mortar experience.
For example, they might not be able to quickly find what they are looking for in a store extending over several thousand square meters. And they are quite likely to hate the long wait at the checkout counter.
A digital transformation is occurring in the retail industry that is helping retailers to enhance the positive experiences and eliminate the negative aspects. In this post, we look at some major initiatives in this direction.
Amazon Go Store
Amazon is setting up brick-and-mortar convenience stores to sell necessary products used in daily life. These stores eliminate waiting at checkouts. You enter the store by scanning the Amazon Go app at the turnstile, walk around picking up what you want, and walk out.
The stores use cameras, sensors, facial recognition, and other technologies like AI to automate the entire process. The cameras and sensors can identify the items you pick from the shelves (and even those you put back on second thoughts). They can identify you from the app and the facial recognition technology.
A combination of all the technologies helps the Go stores to bill you for the items you had taken, charge you and send you a receipt after you have walked out. You need an Amazon account, a smartphone, and the Amazon Go app to enjoy the Amazon Go experience.
Alibaba’s Hema Stores
Alibaba’s Hema stores add value to the shopping experience by allowing you to use the Hema app to:
- Scan the QR codes on products to get details like when the produce was harvested and where it was sourced from
- Pay for your purchases using the app instead of waiting at the checkout counter
More interesting is the option to use the Hema app for a customized robotic dining experience. Use the app to:
- Reserve a seat at the restaurant
- Order the items at the store to be cooked
Robots move the selected items from shelves to the kitchen and the cooked dishes from the kitchen to your table. No human waiters are involved except for a few items like large soups.
Hema stores also serve as distribution centers for online orders. Store employees move around the store filling bags with ordered items and then putting them on conveyor belts to the delivery center. Customers within a three-kilometer radius can expect to receive their online orders within 30 minutes.
JD.com’s 7Fresh Stores
Source – JD Corporate Blog
Following Alibaba, JD.com also opened a fresh food store – 7Fresh.
You register in advance so that the store can grant you access using facial recognition. Inside the store, when you pick up an item a ‘magic mirror’ displays information about that item.
An automated cart follows you through the store without the need for being pushed (leaving your hands free for shopping and holding children).
The app also allows you to pay for the items in the shopping cart so that you don’t have to wait at checkout. The store uses big data to identify what customers are buying and to stock those items without fail.
Nike’s House of Innovation
Nike’s focus is on delivering a superior customer experience rather than on the transactional aspects of buying things. That is what their House of Innovation 000 delivers.
Get the Nike app, enter the Innovation store to find a customization bar at the Nike Arena. At the bar, you can select your shoe style and then customize it with custom lace plates, colors, engravings, and the Nike Swoosh. The customized shoe will be created and delivered to you.
If you are looking for apparel, you can select the mannequin wearing the desired outfit and scan the QR code attached to the display. You will get more information on everything the mannequin is wearing, including availability and sizing.
You can add items you want to try to a virtual shopping bag. When all items have been selected, send a request for these to be sent to the fitting room. You can then go to the room, where a locker will be marked with your name. Enter the locker and try out the items which would have already been placed there by staff.
Other Digitalization Examples
Kroger Edge is a technology that responds to shopper actions around the store aisles. It displays price, nutrition, and promotional information digitally on the store shelves, replacing paper tags and cardboard ads.
This option helps reduce power consumption as the intensity of store lights (needed for reading paper tags) can be minimized. The shelves also have Bluetooth sensors to sense the shopping list in your smartphone and light up the shelf for the next item.
To know more: How Kroger Uses Artificial Intelligence (AI) to Innovate
Geo-Nav beacons can help stores in different ways. At a simple level, it can support store customers by assisting them to find out where they are in the maze of stores, and how to go where they want.
At Target, a shopper can open the store app and find exactly where they are. Another use is to send a promotional message to the shopper’s smartphone just when the person is near a promoted product in the store aisle.
The IKEA Place app “lets you virtually ‘place’ IKEA products in your space”. It also has a ‘visual search’ function: point your camera at any piece of furniture you love and your phone will tell you which IKEA product it is or resembles the most.”
For example, you can place an IKEA product in your living room and see how it looks and whether it will fit in the room.
Ted Bakers interactive windows add a new dimension to window shopping! The great-looking window is sure to catch your attention as you pass by. And it does not stop there.
You can place your hand in a designated place and have yourself photographed and placed into a baker family scene. This photo is then published and you can share it on your social media. A great way for Ted Baker to get noticed!
Lulu Lemon has a smart display at its physical stores. It displays the inventory at their online store. Customers can select just what they want and check whether it is available in the back of the store, or any other stores.
This means that they need not leave the store even if the item they want is not on the shelves; they can simply place an online order at the shop if the item is available elsewhere.
Digitalizing Brick-and-Mortar Retail: Summary
The retail industry is undergoing a digital transformation that enhances the shopping experience. In these days of ever-expanding online purchases, traditional stores can retain patronage by focusing on the consumer’s need for substantial store experience – seeing and touching merchandise and other aspects.
In this post, we saw how renowned retailers are doing this.
The retail industry digital transformation is also helping brick-and-mortar stores with their promotional efforts. We saw how Bluetooth beacons send a promotional message just when the shopper is near the product in the store, for example; and how Ted Baker uses an interactive shopping window to provide the passer-by an unforgettable experience.
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