The brave new omnichannel world poses hard choices for retail technology
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Editor's Note: An earlier version of this article ran in Retail Customer Experience, a sister publication of Kiosk Marketplace
|Andy Ballard is the CEO of Wiser, a provider of data driven retail strategies.|
by Andy Ballard
Have we reached the point of saturation in retail technology? While some shoppers may get excited about the latest and greatest tech developments for in-store and online experiences, some would rather take it slow and prefer the simple days of retail. Making the shopping experience easier is always a plus, but overdoing omnichannel retail technology runs the risk of alienating shoppers.
Take mobile payments, for example. Some jumped at the opportunity to use Apple Pay to speed up in-store transactions. Yet, others are weary of the technology and feel more comfortable using cash. As stores go cashless, they risk pushing out loyal customers who don't have mobile devices or prefer to use other forms of payment.
The reality of retail technology is that some consumers are much more into it than others, and it isn't in a retailer's best interest to chase everything shiny that competitors might be trying out. While this might sound counterintuitive, being competitive in retail is not about reactivity. Instead, retailers should be proactive and take action to find out what their customers actually want, and provide those products, services or technologies. This can be accomplished through customer sentiment feedback provided in-store or online through mobile mystery shopping apps.
Let's break down some lessons in tech implementation that all retailers can learn from.
In-store tech trial and error
On the QSR front, Shake Shack recently tried out a cashless location that only allowed ordering at kiosks. After monitoring customer feedback, they decided to pursue a different approach. While paying cash to human cashiers might slow the line down in theory, customers didn't want to be limited to one payment option.
In a second quarter earnings call, Shake Shack CEO Randy Garutti said the company currently has five stores that offer a hybrid ordering system with both kiosks and cashiers, and the company may open stores with such a hybrid system in markets like the San Francisco Bay Area and Seattle with higher minimum wages.
Personalization is another touchy subject in retail today. Some consumers might find it helpful, while others find it creepy and may disengage completely. Getting personalization right means segmenting customers and products properly.
The consultancy Lenati recently discussed which retailers and brands were getting personalization right — and which ones were missing the mark. The latter group is where we can learn the most. After all, there are many products that are a one-time purchase.
The consultancy used the example of an Amazon shopper who bought a toilet seat and jokingly complained of being targeted for additional toilet seats. Necessity houseware purchases must be treated differently than apparel, for example. A shopper may buy another pair of jeans after an effective remarketing campaign, but the likelihood that they will want to have two alternate toilet seats for their one bathroom condo are slim to none.
Retailers must strike a balance based on their unique set of customers, and keep up with technological advancements in a way that still meets the core needs of their audience. As evidenced by the example above, they also need to be able to segment their products to know when, where and how to employ personalized retargeting, and when to suggest complementary products instead.
The best retail tech is balanced
Not every store needs to follow Amazon Go's lead and install expensive sensors and cameras in their ceilings — but all retailers must strike a balance between old school retail and cutting-edge technology. To accomplish this, retailers first need to understand what their customers want. Start by asking pointed questions about specific pain points your most loyal customers have. Are checkout lines too long? Do promotional products go out of stock too fast? Getting a feel for what causes customers to abandon purchases or avoid a store or website will give you guidance for what you could improve with technology.
Shoppers want a frictionless experience, and this manifests itself differently based on the type of retail and category of products. HRC Retail Advisory recently conducted a study on consumer interest in retail technology and explained, "Identifying the right technologies and pairing it with the right in-store experience for shoppers of different generations will be critical to retailers' long-term success."
Instead of chasing every opportunity, retailers will get ahead by implementing the right technologies that actually improve the retail customer experience.