Automation: the new front line in omnichannel retail

By Frank Lochbaum, Managing Partner at KPS.

As retailers continue to search for the best ways to blur the boundaries between channels, more are turning to automation to ease customers' in-store pain points.

Aspects of the customer journey that add time, complexity and fuss are forward-thinking retailers' main targets for automation. These include payment, in-store order collection, streamlining changing room activity and granting in-store customers access to the retailers' full inventory – the so-called 'endless aisle'.

Interactive 'magic' mirrors, for example, have been appearing in stores for some time, but in recent months in-store automation has shifted up a gear, graduating magic mirrors from gimmick to functional tools capable of bringing omnichannel retail one step closer.

Innovation hotspots

London's Westfield shopping centres, which are renowned innovation hotspots, are proving to be among the top testing grounds for automation in the UK.

Earlier this year, global fashion retailer Zara relaunched its Westfield Stratford City store, which now features automated order collection points, self-checkout and a mobile payment system. A new online-dedicated area of the store houses an automated order collection point.

According to the retailer, the system scans a QR code sent to customers when they order online and behind the scenes a robotic arm collects trays and organises packages according to their size, delivering customer orders within seconds. Online orders are also available in store on the same day, if made before 2pm, or the next day if made in the afternoon.

During the store relaunch, Inditex CEO Paolo Isla stressed that the drive for in-store automation was only possible thanks to Zara's investment in robust omnichannel processes.

He said: 'We enjoy a global sales platform that fully integrates stores and online. In recent years we have invested in both the most advanced technology and optimised our stores for this aim. Our business model combines stores and digital seamlessly.'

Automated payment apps

Earlier this year Zara's competitor Mango also launched its first foray into in-store automation, introducing mobile payment and digital fitting rooms in key stores such as Barcelona and New York. The Spanish retailer has teamed up with telecoms giant Vodafone to introduce the new generation of digital fitting rooms.

Shoppers using the equipment can scan products in the fitting room and then contact shop floor staff directly from the mirror, via a digital watch, to request different sizes or colours. The mirror also includes a feature that suggests additional clothes to complement the consumer's original choice.

UK grocery store The Co-op is also getting in on the action, unveiling a new mobile app that allows shoppers to pay for purchases while they're in the aisles, avoiding the till all together. A trial of the 'shop, scan and go' app has taken place at the retailer's support centre in Manchester, and now a wider roll-out is being considered.

The app allows shoppers to scan products on their mobile phone as they walk around the store. When they're finished they simply pay with a single click.

Facial recognition

While European retailers are tentatively testing the waters around in-store automation, their Chinese counterparts already seem several steps ahead. Alibaba, for example, is taking payment automation to the next level, providing facial recognition technology for Danish clothing group Bestseller to offer as an option in a small number of its Jack & Jones and Vero Moda stores in China.

Meanwhile, Chinese clothing and home retailer Suning is also aggressively pushing the automation envelope. The company's Biu stores feature facial recognition, meaning any shopper linking their bank card to the Suning Finance app is immediately identified by camera at the store entrance and granted access.

Once they've finished shopping, customers just need to carry their goods along an in-store 'payment pathway'. This system will automatically recognise the shopper and their items using facial recognition and RFID technology – ensuring the entire checkout process is shorter than 15 seconds.

Suning's facial recognition technology can also carry out customer profiling to understand the consumer's age, gender and apparently, their emotional reaction when they see different products.

Giving shoppers more power

Stefanie Dorfer, assistant retail editor at research agency Stylus, says that consumers will see a great deal more automation in the months and years ahead both in Europe, China and elsewhere. She recently told fashion retail bible, Drapers: "Automation is about putting power into the hands of shoppers and delivering a more effective and engaging shopping experience. Retailers should be looking at the pain points in-store – particularly services that require time or are prone to queues, such as order collections, product returns, changing rooms or checkouts."

Of course, it's not as straightforward as simply automating your in-store processes. To succeed in this area, retailers need to have robust omnichannel processes in place across a wide range of functions, from knowing who their in-store customers are and being able to track their shopping journey, right through to guaranteeing high levels of stock accuracy and ensuring their omnichannel approach is profitable.

Retailers who build these strong foundations will be best placed to offer their customers the smoothest in-store experience, building customer loyalty and ultimately boosting their bottom line.

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