The Store of the Future

It is not uncommon to see retail stores that are so out-of-date they look like backdrops to old films, but generally retailers have always been passionately interested in finding out what will be the next best thing in shopping.

They visit one another’s stores and copy what they like most. A hundred years ago, visiting a department store was the most thrilling thing ever, such a range of goods, displayed to perfection in what seemed like palaces of commerce.

The ‘Next Best thing’

In the last 50 years the next best thing of course has changed a great deal. It has included the shift to self-service with the new Supermarket (and later the Hypermarket or Superstore) seen as the essence of the Future-Store. Self-service and self-selection is the norm these days in virtually every store. Eliminating slow checkouts and lengthy queues, a typical bugbear of most shoppers, has involved better layout, EPoS (electronic point-of-sale and laser scanning), automatic card readers, customer self-scanning machines and contactless payments. EPoS has provided customers with an itemised receipt and retailers with accurate information about stock and detailed information about who buys what and what time of day.

The Future-store versus Online

I used to think that the Future-store was all about technology, but that is wrong. Probably. Obviously the most important type of Future-store at present is online retailing. Initially a method of buying books and music in the early 1990s, which has moved the retail store from the mall or high street into the customer’s own front room. Most medium and large retailers now have their own ecommerce operation and one of the main Future-store questions for them is how to balance their ecommerce operations and IT with the way their physical stores operate. They must ensure the same customer is treated in the same way by each part of the business. This approach, termed omni-channel, is an aspiration today rather than an approach that any retailer is yet using, but it certainly will be the data bedrock of the retail Future-store.

Many Large Stores Now Obsolescent

Retailing has certainly not stood still in the last 50 years. Stores have got bigger and bigger: in 1965 the UK definition of a supermarket was a 3,000+ square feet store with self-service. This would now be regarded as a tiny convenience store. The problem that many multiples now have is that their stores are too large. Some of the merchandise that used to help fill the sales area, such as music, videos, CDs, small electrical goods, homeware, kitchenware goods, clothing and babyware, are now bought from discounters or online. Hence the approach to remodel stores, making them smaller, to add services such as dry cleaning, clothing repair, cafes, and gaming studios, to invite competitors to open concessions, or to partition the stores to make three stores where there was once one.

New Technology

New technology probably will be an important element of the Store of the Future. Some people think that the Future-store is only about using new technologies, although our view is that this is mistaken. If physical stores are to survive they need to add something different to the shopper’s experience – something they cannot get online, but if the new stores are too slow, inefficient or too expensive they probably won’t be the Store of the Future for very long. Moreover, technology-intensive stores will have much higher costs than other stores and this probably means they will be confined to major shopping destinations. However it is true that technology costs normally fall with mass production so that a product like a virtual 3D mirror (which shows you what the garment looks like from every direction and can even change the garment’s colour without the customer needing to put a fresh garment on physically) may potentially become very common. 

New Technology is Limited by People

However people don’t necessarily embrace technology warmly. Customer self-scanning is still seen as problematic five years after the major push to get shoppers to use them. The reasons are probably partly technical (they are very clunky and slow to use) and partly psychological (they are not private enough). Even Amazon Go stores, which have received tremendous favourable publicity a year ago, have a limited range of goods and the average customer spend is currently very low, suggesting that technology alone is not the answer. 

Some New Ideas about the Store of the Future

Below is a list of videos with some new ideas. Some ideas are terrible (facial recognition), some practical (refills or subscription services) and others involve high tech that is worth considering (shop and Go and automatic RFID-based no-wait scanning). Several are made by companies to help sell their products, but they are still very interesting. We have not been paid to recommend any of these videos. As you might expect, there is some repetition. There is no need to watch every single one.   

Better Information Technology

This looks at five new technologies for retailers including facial recognition, robots, RFID, interactive displays and faster payment systems. CCTV can actually count customers, estimate the breakdown by sex and age group and show overall customer flows (routes taken) through the stores.

van Hooijdonk’s Views of the New Grocery Shopping via Artificial Intelligence (AI)

van Hooijdonk looks at the major innovations being introduced by retailers designed to create the supermarket of the future. He emphasises the need to reflect actual consumer requirements using AI, rather than simply shoving bulk at the shopper. AI also manages the store’s supply chain.

Cisco’s Ideas About the Store of the Future

Cisco promotes its systems that allow store assistants with iPADs to have full product information and to make sales directly on their iPADs, electronic screens in fitting rooms used by customers to get further information, request garments, or make a purchase by smartphone using 2D bar codes.

Alibaba Shares its Ideas about the Future-store and how it supports Smaller Retailers

Alibaba is the largest online retailer in China. This cross-cultural video argues that the future is not the death of the retail store, but the benefits of retail digitalisation. It looks at what the new grocery store will be like, the car showroom, how smaller stores can be made more efficient by app-based systems, and tomorrow’s shopping mall. The self-promotion of Alibaba grates a bit, but it is fascinating.

The New Grocery Shopping

Kantar (a market research company) views about how grocery shopping will change. Store shopping for grocery will be integrated into home devices (including Smart Glasses) that communicate with the store, the customer’s replenishment of regularly-purchased goods is done automatically while the shopper walks round the front-of-store looking at offers and different items the consumer wants to try. Offers and recommendations are made to her mobile using AI, depending on what he or she looks at in the store. The music is execrable and can be switched off.

Seven Ways Retail is Going Back to the Future

Retail Week discusses several innovations with pretty ancient pedigrees. These include: zero-packaging refills, renting goods rather than buying them, highly-trained and expert staff, in-store services, concierge services for elite clients and bike deliveries. You may need to register.

Five Things That Companies are Doing Now

This is an online text article with embedded videos. You can scroll down to the two most interesting topics: the Rebecca Minkoff connected wall allowing the shopper to bring up additional information about products; and Lowe’s robot that accompanies a shopper.

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