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Automation sensation: the next stage of omnichannel retail

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As automation blurs the line between etail and bricks-and-mortar shopping, retailers are going automatic to lure shoppers in store

The future of bricks-and-mortar stores is a hotly debated topic, and retailers are racing to ensure physical stores keep customers coming back for more. Digitalisation has transformed retail, and businesses must embrace new technology to stay relevant. As brands across the spectrum from fast fashion to luxury open new stores with greater technology integration, in-store automation is becoming an incresingly important tool

Although , responsive “magic” mirrors and touch screens have been appearing in stores for some time, in recent months, in-store automation has shifted from a quirky novelty addition to a functional consumer tool, as the importance of omnichannel excellence grows.

In March, Mango’s new Westfield London store in White City introduced mobile payment and digital fitting rooms. After a pop-up store designed for ordering and collecting online purchases, in May, Zara launched its new Westfield Stratford City store, which features self-check-outs and automated collection points. Beyond fashion, Amazon’s AmazonGo grocery store made headlines in December 2016 when it launched in Seattle, allowing customers to shop via an app in an employee-free store. Further afield, Chinese ecommerce giant Alibaba and Danish clothing group Bestseller are introducing facial recognition technology, as the industry races towards a more automated future.

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Mango Westfield London

”The underlying reason for this move is the pursuit of a slick and easy omnichannel offer,” explains Stefanie Dorfer, assistant retail editor at research agency Stylus. “Retailers are looking for more comprehensive ways to deliver seamlessness between channels and provide convenience. While the latter has been a buzzword for a number of years now, there’s still a long way to truly deliver on this and automation will play a large part in that.”

Dorfer highlights Zara’s Stratford store, which features automated online order collection points, as heralding a possible future of 24/7 shopping where customers can take more control over their shopping experience, moving between online and offline.

“This is a huge area of development for retailers. Not only does it enable to shoppers to manage more elements of their shopping journey – something they increasingly desire – but, if done well, can gift back time and build loyalty in the process.”

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Zara Westfield Stratford’s self-check-outs

At the time of the opening, Inditex CEO Paolo Isla highlighted the group’s focus on automation for improving the omnichannel experience: “We are in a unique position as 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,” he said. “Our business model combines stores and digital seamlessly.”

Following the Stratford pop-up and trials in pop-ups in Milan and Tokyo, it is expected that Zara will role out this technology across its extensive network of stores.

Dorfer notes that automation such as Zara’s payment and collection tools is most useful when it targets the “pain points” of physical retailing: “Automation is all 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.”

 

Paying the price

Payment is a clear area of focus in automation development. While Zara offers self-checkout, in its Westfield London branch Mango offers a “PayGo” function, which enables customers to pay from anywhere in the store via a “handheld device”.

The next stage in payment development, however, is facial recognition payments. Alibaba provides the technology for Bestseller to offer this as an option in a small number of its Jack & Jones and Vero Moda stores in China.

Chinese clothing and home retailer Suning has similarly launched its own version of the in-house technology in an unmanned “smart store” in its Nanjing shop, Biu.

“Any shopper linking their bank card to the Suning finance app is immediately identified by camera at the entrance and granted access to the store,” explains Steven Zhang, president of Suning International Business Development Centre. “The facial recognition technology can also carry out consumer profiling to understand the consumer’s age, gender and emotional reaction when he or she sees different products.”

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Suning’s Biu store in Nanjing

Radio-frequency identification (RFID) technology tracks which items a customer is holding as they pick them up and walk through the store. Payment takes less than six seconds and happens automatically as the shopper leaves the store with their pieces.

Zhang says: “The core purpose is to continuously provide better products and services to boost consumer satisfaction and industry benefits, creating better experiences for everyone across the chain. Ultimately, it is about improving the consumer experience.”

Designer Rebecca Minkoff took this approach when she began overhauling her eponymous brand’s US flagship stores, introducing smart mirrors, interactive fitting rooms and an in-store “check in” to facilitate a smoother customer journey sharing online customer data with store staff.

 “As a woman I felt there was a lot missing from retail stores that I wanted to offer to my customer,” says Minkoff, founder and creative director. “There are pain points in traditional retail that I wanted to address. I wanted to have our store stylists be my voice and continue the conversation with shoppers in the same direct line of communication I have with them online.” 

“We see a woman who either wants to shop as efficiently as possible on the one-hand, or wants to truly have a VIP experience on the other,” adds Uri Minkoff, CEO. “This store [in SoHo New York] has been built with technological efficiencies to help her achieve either of those goals.”

This is personal

Although fast fashion may look to automation to speed up processes, luxury retailers are using it as a way to further personalise and enhance the in-store experience for demanding consumers. It frees up staff to engage with customers and allows for a personalised service such as styling advice.

“The demand for customisation and personalisation has shown that consumers are willing to pay a premium for an enhanced experience or product,” notes Matthew Drinkwater, head of the Fashion Innovation Agency, which has worked with womenswear brand Rixo London and designers Martine Jarlgaard and Fyodor Golan. “The adoption of further automation in store is only likely to increase this desire.”

Farfetch’s Browns East store in Shoreditch, London is one example of this. When shoppers try on items, RFID-enabled racks add them to a wish list in the Browns app to review at home. Alternatively, customers can add items to their list before visiting the store, and the sales team will ready the selected products in a personal shopping space.

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Browns East

Speaking to Drapers in April, Browns CEO Holli Rogers highlighted the improvement the technology has brought to operations, cutting down time required for stock-taking and order fulfilment.

She stressed the importance of this tech in enhancing service: “Sales associates are instantly able to search for available styles and sizes creating a pick list which is then sent through to the stock team. Through this technology, we’re now in a position where we’re able to get the product to the customer faster than ever before. Technology enhances the customer experience whether they realise it or not.”

Dorfer agrees: “The overall in‐store experience is heading towards true personalisation that is fully in‐tune with customers’ taste preferences and demands – driven by online data and understanding of consumer behaviour.

“This is particularly relevant for fashion retail, where intimacy, advice and personalisation will be key.”

Fears that automation could lead to unmanned stores across all levels, or retail job losses to technology are a common concern with the increase of these kinds of tech. In the distribution and logistics sector, Marks & Spencer and Shop Direct both recently announced possible job losses in fulfilment centres, as they shift to a more automated system.

However, some retailers using the technology are altering the role of store staff, rather than reducing their numbers. With time freed up away from more mundane tasks, they can focus instead on personal service.

“At a fast-fashion level, I can absolutely see a future without sales assistants,” notes Drinkwater. “For other fashion brands, it offers the possibility of creating extraordinary in-store environments with an entirely bespoke experience for each and every consumer.”

Automation has the potential to radically shift the way that consumers shop, and as retailers tirelessly pursue the creation of a seamless, easy shopping experience, more in-store technology is almost guaranteed. Tackling the twin challenges of customisation and convenience, retailers can look to automation as a way to tackle the pain points of bricks-and-mortar shopping.

 

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