INNOVATION

Fatal Attraction: the Retail Industry Renews Itself to Attract New Customers

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The future is here. Smart stores allow customers to shop without using their credit cards or cash and “read” the minds of shoppers, who receive advice on which products to buy according to their needs and tastes. The offline universe takes the best traits of the online world and retransforms and adapts them to the present times: retails get rid of barriers to provide customers with a fast, safe and trouble-free shopping experience. Success stories in the world and what’s happening in Latin America.

The Mirror: Amazon Go

“No lines, no registers. Just grab it and take it!” Amazon Go defines itself as the most advanced technology in the retail industry. This brand, which has 11 stores in the United States (four in Seattle, four in Chicago and the rest in San Francisco), brings the future into the shopping experience of users and customers. By downloading an app, shoppers may purchase products from Go stores without using their wallets. To enter the store, scan the bar code using your cell phone –that’s where you get your data and the credit card you’ll use for payment– and leave the place without waiting, standing in line and paying a cashier. This is the long-awaited method, “Just Walk Out Shopping”, that is, buying without going through a check-out process, which is expected to   revolutionize the industry. Cameras are installed on roofs and strategic places in stores to follow shoppers wherever they go in order to know what they are buying (and what they are not buying). Sensors are installed on shelves, which also track products.

Amazon’s technology is based on three pillars: computer vision, data algorithms or data science, and sensor fusion. The same technology you “would find in self-driving cars,” as explained in their instructive video on Amazon’s website. According to an article on the Business section of CNN.com, when customers leave the store, they receive all the information about what they have just purchased on their phones and the amount of time they have spent in the store. What are the benefits for retailers? In addition to the obvious savings on labor costs (there are no cashiers because registers no longer exist), this system gathers valuable information in terms of marketing and sales strategies: the technology that is installed in Go stores allows retailers to know what the socioeconomic profile of their customers is, what they buy the most, how many customers enter the store each day, etc.

Similar to Amazon’s JWOS technology, in China there are stores called BingoBox, which are small stores that are open all day long with no employees or cashiers. Here customers can pay what they buy through Alipay or WeChat Pay, two of the most widely used systems in the country. As in Go stores, customers can buy products in any of the 300 BingoBox stores without having to stand in line: they scan items in a check-out register and they pay using a QR code on their cellphones.

In an interview published in Techinasia.com, Zilin Chen, founder and creator of the brand, admits that, in the future, they plan to incorporate new technologies that will allow them to make recommendations to customers through voice command and to provide exclusive offers.

Another futurist project that seems promising is 7-Eleven Signature, an experiment in South Korea that will allow customers to use their hands to pay what they purchase. According to an article published in the blog Comercios Innovadores de Bilbao, the store will open in August and it will implement a new payment system based on a screen that recognizes the capillaries of the veins in the palm of the hand to identify the consumer and charge the correct amount.

A Different Experience: Shopping and Feeling At Home

The future of the physical retail industry is not only technological but also experimental. The premise? Make the customer stay and feel at home. The paradigmatic case is 7-Eleven, which has launched its pilot test, 7-Eleven Lab Store, in Dallas, United States, and offers the possibility to buy personalized juice, smoothies and yogurt, cookies and croissants that have been baked during the day, and draft beer and a selection of wines. The store also has a patio with tables and chairs where visitors can enjoy a snack or have a meal, and it even has a small restaurant that offers Mexican tacos. In tune with the Amazon Go revolution, shoppers may also use their cellphones to pay with the “Scan & Pay” technology featured in 14 stores across this American city, according to the site Fortune.com. An app is used to read the barcode on each product, and the payment is made with a credit card. All using a cellphone.  Once the payment is made, shoppers simply scan the QR code that appears in their cellphones in a stand inside the store –the “Confirmation station”– and may then leave the store without having to wait in line. Almost as simple as Go, almost as magical.

Impact on Latin America

The first smart store in Latin America, Zaitt, is located in Brazil. It has opened two stores in Sao Paulo and Victoria, in the state of Espírito Santo. Its operation is similar to that of BingoBox: to enter the store, customers use their cellphones to scan the QR code at the door (after downloading the store’s app) and use the same method with each product they want to purchase. When leaving, customers confirm their purchase by looking at the details on the app and then use a credit card to pay. There are no lines, no employees, and no registers. The store is open all day long to meet the needs of customers as if it were an ATM.

One of the traits that stands out in the region is the creativity to overcome economic crises. In Argentina, for example, butcher Facundo Demarchi, from Córdoba, implemented Bitcoin payments in his business to deal with inflation. His clients may pay with this cryptocurrency by using a QR code in their cellphones. He also accepts Dash, Letter, and Litecoin. According to an interview in iProfesional, in September 2018, one Bitcoin, valued at $244,801 (Argentine pesos), was equivalent to US$ 6586. This means that, at the time, a kilogram of beef butt roast, which cost $230 (Argentine pesos), could be paid with 0,00092 BTC. A barbecue for 4 people cost around 0,004 BTC.

New technologies are also used to overcome adverse scenarios, both due to socio-economic crises and competition with online commerce. Large supermarket chains such as Carrefour and Walmart are planning to become part of the smart sales trend by incorporating cameras and sensors in shelves to obtain data from consumers: their profiles, what they buy the most and the least, which products they finally decide not to buy, etc.

In Argentina, the pilot test was conducted by Unilever through the solutions offered by PusherPOP Smart, a pioneer in Latin America in the development of technology applied to the point of sale. This consumer products company dared to try new trends and transformed its shelves into “smart” shelves for Knorr’s product line. The system, which is installed in 20 shelves in Carrefour and Coto supermarkets in the City of Buenos Aires and Greater Buenos Aires, consists of hardware and software connected to the cloud. It offers information about the behavior of shoppers in real time and it interacts with shoppers to offer them new products. PusherPop’s Shopper Behavior + Shopper Interaction uses state-of-the-art cameras and optical sensors. Cameras are made in Germany and they are responsible for identifying and quantifying: they can recognize if a group of people moves together, if there are children, if they are holding a toy car and how much time they spend in a shelf. Sensors detect the movement of a hand when someone grabs a product and of show an image on the screen with recommendations, recipes, and promotions. “This message, video or image offers shoppers another product that may be combined with the one they have just taken from the shelf (cross category). Thanks to the contextualization of the message, the buyer receives relevant information, which results in a high conversion rate for the product that is offered,” explains Leonar Llalen, Director of PusherPOP Argentina.

On the other side of the screen, the retailer receives updated information about what is happening on the shelf through an exclusive-access dashboard. This may not only be used to create sales strategies and improve the shopping experience but also to control stock. “Technology combined with software and an aim give both retailers and brands the possibility to engage in a conversation with their customers that is relevant because it helps them customize and contextualize the message,” says Llalen.

The technological revolution has reached the retail industry and is here to stay. With our cellphones in hand, we just need to prepare to enjoy a new fast and magical experience.

Learn more about the solutions offered by PusherPOP Smart to improve the shopping experience.

To learn more, visit https://pusherpopsmart.com.

Summit: Retail Day 2019

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