#40- Retail-tech and Digital Maturity Models: Retailers deploying O2O experience -technologies will Win
COVID-2019 has been merciless to the Retailers. For E-commerce platforms, it has been a shot in the arm. They emerged as the clear winners who gained more users, and greater shares of their shopping wallet.
The Pandemic expedited the disruption in the industry on average by a 3 to 5-year window. This is the reason why a lot of retailers were caught unprepared and could not survive the slump in the offline sales slowdown.
The retail apocalypse will continue, till the retailers who did not manage to adapt to the disruption winds are compelled to shut down or marginalize their business.
Physical retail will not die completely but it will evolve to survive and co-exist with the ‘e-commerce Tsunami’.
Globally all the leading e-commerce companies gained a lot of new users and increased GMV- Amazon, Alibaba, Lazada, Shopee, Flipkart, Tokopedia further strengthened their market shares due to the shift to ‘UNTACT ECONOMY’
Retailers need to rethink their categories play, private label strategy in addition to the adoption of Retail-Technologies that can be the game-changers or the last ray of hope for retailers to make things work for them.
8 Game Changer Retail Tech
Beacon Technology- Beacon tech has been used by retailers to attract customers within a certain distance range of their store. It uses Bluetooth Low Energy ( BLE) transmits signals to compatible mobile devices (phones, tablets, smartwatches, etc.) to share a deal, discount, or incentive to prospective customers to make them motivated to purchase. According to Globe Newswire, the global beacon technology market is projected to grow at a CAGR of 45.5% during 2019–2024 to reach $ 10.2 billion by 2024. Some of the major players operating in the Global Beacon Technology Market include Qualcomm, Cisco Systems ., Samsung Electronics, Apple, HPE’s Aruba Networks, Estimote, Inc., Kontakt.io, Accent Advanced Systems SL, Onyx Beacon, Blue Sense Networks Ltd. Kontakt.io and Estimote Inc. These companies are developing innovative beacons, so as to register positive growth in the market.
Autonomous Retail Service Bots- Lowe’s introduced LoweBot in 2016 in the SFO store. The AI Bot is able to find products in multiple languages and help customers effectively navigate the store. It also customers with simple questions, it enables employees to spend more time offering their expertise and specialty knowledge to customers. LoweBot also supports inventory monitoring in real-time and helped detect patterns that might guide future business decisions
Real-Time Inventory and Booking Tech- The biggest pain point for an offline shopper is to reach a store after driving/traveling for a while and then not finding what they wanted at a store. The inventory software must be well-integrated with a consumer app that enables them to know what is available at the store and how to reserve it in advance. It can be a variation/extension of the click-and-collect model. Likewise, for a service (saloon), dine-in, they should be able to do the reservation in advance. All queues actually push offline users to the online world.
Loyalty and Rewards-Tech- Big retailers need to ensure they orchestrate a sophisticated loyalty and rewards program to increase user stickiness on their D2C platforms/apps. AI-engine powered- personalized recommendations and optimal reward points incentive system will hook the customer to repeat the transactions and use the reward points.
Cashier-less or the Just Walk Out Tech by Amazon- Amazon Go cashier-less technology model will be adopted globally sooner or later. It is a no brainer and many successful examples already exist globally (some of them even before Amazon GO got popular via the internet)
Facial Recognition Check-outs- KFC uses Alibaba Smile to Pay Technology- KFC China offers end to end Facial recognition based checkouts. One does not even need a mobile phone or a wearable device to make the payment as long as shopper details/personalized menu/recommendations are generated on the KFC customer portals/systems. As long as the credit score is good, the shopper does not even need cash or a mobile QR system for a purchase. Cash and digital payments both become invisible.
Smart Mirrors and AR/VR store tech- This will be very important for all fashion stores. There is a limit to the number of clothes, and accessories a person can try. However, a smart mirror can give a shopper unlimited trials of an SKU in different colors and sizes. The Shopper can even take inputs/votes from the social community of close family members. This certainly adds a network effect to the offline shopping ecosystem.
Livestream-Tech- Social commerce will be a life-line for offline retailers. They can participate in festivals being organized by major online e-commerce players, as well as run 24 by 7 independent micro online events where their own network participates.
Who can orchestrate the retail-tech ecosystem?
Big retailers-Big retailers/store chains will need to take charge to redefine the customer experience. Technology investments that optimize the in-store customer journey and produce a superior O2O experience are no longer optional. Look at how Sephora stores, Apple Studios and Nike Stores go after the in-store experience
Mall-operators-Mall operators need to collaborate with the tenants to bring this technology to their tenants. Mall operators will have greater negotiation power and if they could offer this tech as part of the tenancy agreements, then it may even help in attracting the tenants who will be open to paying higher rents.
E-commerce players-E-commerce companies are keen to partner with retailers/especially the regional resellers/small retailers in offering them the ‘live streaming’ and ‘localized fulfillment and advertising services to sell beyond their physical store. The e-commerce players that have exclusive cloud technology, big-tech, and procurement partners have an unfair advantage.
Big Retailers with Proprietary Tech- Ocado group is one such disruptive example Ocado Technology, a division of Ocado Group, designs most of Ocado’s technology in-house, including but not limited to: website and apps; automated warehouses and robots; Machine Learning-based fraud detection and customer service systems; forecasting and routing systems. The company specializes in automation and robotics; big data and the cloud; web and app development; algorithms and smart optimization; and discrete event-simulation. Ocado’s warehouses are built with a giant 3D grid structure inside, within which groceries are stored in crates. On top, robots (over 1,000 per warehouse) work seamlessly. The robotics operations are optimized by a central ‘control system’ using AI (artificial intelligence). Ocado can pick a 50 item order in minutes.
The Ocado Smart Platform is Ocado’s hardware and software platform for operating retail businesses online. It is this side-step from being a UK grocer into becoming a global technology provider whose clients include the following supermarket chains: Morrisons (UK); ICA (Sweden); Group Casino (France), Sobeys (Canada); Kroger (USA) and Bon Preu(Spain).
But what can Mom and Pop, that cannot deploy the expensive retail-tech in their stores Do?
Alibaba’s New Retail — Small mom and pop stores will be supported by big e-commerce players like Alibaba through its new retail strategy.
In addition to rolling out New Retail at its owned Hema Fresh chains, Alibaba wants to digitize mom and pop stores by offering best in class retail tech solutions to them (inventory, supplier management, customer data, invoice, and other analytics)
Retail Conglomerates -Vingroup plans to digitize 300,000 Mom and Pop stores in Vietnam via its app. Vietnamese conglomerate Vingroup recently launched a B2B app called VinShop. The app connects traditional mom-and-pop small retailers to suppliers/wholesalers and offers the best procurement solutions. VinShop lets grocery store owners to get hundreds of products from suppliers in 1 single day of order. The app is also connected to VinID, creating Vietnam’s first B2B2C channel.
Vinshop has been installed by more than 20,000 traditional grocery stores in Hanoi and HCMC city in Vietnam. Vingroup aims to reach 300,000 VinShop users by 2022 and thus replicate new retail best practices from China.
Regards,
Sidhartha Sharma
Digital Platform and Ecosystem expert. He helps businesses design and implement digital strategies for the new economy.
Views are personal
