If you read the business news, chances are you think retailers of all stripes are decking out their stores with humanoid robot greeters, virtual reality dressing rooms, augmented reality window displays, and high-tech interactive screens that bring products to life. But if you walk into your average grocery store, you might wonder: where is all that shiny new tech that’s supposedly transforming the customer experience? And why can’t I find the organic chia seeds?
As a preamble to our interview for this article, I pose the former question to Eric Matusiak, partner, national retail leader at BDO Canada. To be fair, I note that my decidedly analogue shopping experiences could be because I live in a smaller Ontario market. He responds: “Your polite skepticism is warranted because you read articles all the time about how tech is doing this and that … And you go into most stores and think, ‘Well, nothing’s changed!’”
The trouble is, it’s easy for the media or tech companies to tell businesses they must implement X, Y and Z technologies … or else. “But it costs money and time to make this stuff happen,” says Matusiak. “[Grocery] is also a tight-margin industry and companies just don’t have millions or tens of millions to turn on a dime, let alone the cultural and people factors involved with a heavier deployment of technology.”
Retailers’ tech budgets might not be on the rise, but consumer expectations certainly are. A 2018 study from the Retail Council of Canada (RCC), in collaboration with RCC’s marketing advisory council, Google and WisePlum, found that Canadians expect a more convenient, seamless and integrated shopping experience—whether they shop online or in store. For instance, a significantly larger percentage of grocery consumers surveyed (44% versus 30% for non-grocery) indicated a desire for a faster checkout.
PwC’s 2019 Canadian Consumer Insights Survey found that when in store, 52% of Canadians said the ability to quickly and conveniently navigate the store, as well as quick and easy payment methods (32%), including mobile and contactless payment, would significantly improve their current in-store shopping experience.
The studies are salient, as they dispel the notion that enhancing the in-store experience is all about amazing, high-tech bells and whistles. “I think where we’re getting confused these days is the term ‘experience’ is now being equated to ‘epic’—that it has to be this complete ‘wow’ experience and be Instagrammable,” says Matusiak. “For some people, a great in-store experience is just getting in and out really quickly.”
When the right technologies are used in store, and for the right reasons, there are valuable benefits for both consumers and retailers. Robin Sahota, managing director and retail lead at Accenture, notes that in-store tech does three things retailers today are striving for: enhancing the customer experience; building more customer engagement (which includes the perception of value, increasing dwell times and overall engagement); and improving store operational efficiency. “It really is a combination of these three things that come together to enhance the customer experience and engagement,” he says.
Here’s a look at some of the in-store technologies being used or tested today.
DIGITAL SHELF LABELS: A digital or electronic shelf labels (ESL) system allows retailers to make price adjustments automatically, thereby providing accurate, real-time pricing for customers while saving retailers time and labour. “For retailers, it’s creating efficiency because you no longer have employees who need to spend time doing this very administrative task,” says Sahota. “For customers, it’s helpful because they’re seeing a consistent label across the store. It tends to be quite bright and clear, with the price clearly visible.”
There is also the potential for these labels to do more than just display prices. In 2018, for instance, U.S. grocery giant Kroger rolled out its EDGE (Enhanced Display for Grocery Environment) Shelf digital display system, which communicates everything from pricing and promotions to nutritional information as well as advertisements.
IN-STORE NAVIGATION: About those hard-to-find chia seeds … Mobile apps can tell shoppers where every product is in the store, and how to get to them. Last year, Walmart launched a revamped app at its U.S. stores, with new features including maps that help shoppers find where an item is located, down to the aisle and shelf area. As part of a new pilot in two Kroger stores, in partnership with Microsoft, customers can write an in-app shopping list, and as they shop the store, digital shelf labels light up with a personalized icon (for example, a pumpkin) to point out an item on their list. Shoppers can then scan the item and the app tells them where to find the next product on their list.
In-store navigation tools like these address shoppers’ need for ease. “One big category of consumer expectations is around ease of shop, which is part of the ‘frictionless’ experience,” says Marty Weintraub, national retail leader at Deloitte in Toronto. “Shoppers are looking to in-store navigation apps to help them find what they need quickly without having to walk up and down every aisle.”
SELF-CHECKOUT: While self-checkout systems aren’t new, they have “hugely improved,” says David Marcotte, senior vice-president, cross-border retail at Kantar Consulting. “For over 20 years, my experience has been avoiding self-checkout whenever possible. It’s invariably much slower and much more frustrating [than a traditional checkout]. But in the last five years, self-checkout has gotten to a point where it is a real option … The information, the interface, everything about that just works.”
One new self-checkout technology is scanning tunnels that allow products to flow through a conveyor and where bar codes are read at a quick rate. “You don’t see much of this today, but scanning tunnels are the next evolution of self-checkout,” says Accenture’s Sahota. “Obviously, the value of the scanning tunnel versus [traditional] self-checkout is it takes the work away from the customer and shifts it back to the retailer.”
AUTOMATIC OR INVISIBLE CHECKOUT: “The big story is that consumers don’t like to shop—it’s too much like work,” says Doug Baker, vice-president of industry relations, private label and technology at Food Marketing Institute (FMI). “So, to create a more conducive, enjoyable experience, a lot of retailers have updated their service departments or put in new types of departments.” But, he adds, when customers get to the front of the store, they have to stand in line. “To complete the full loop, retailers are looking for ways to get shoppers out of the store more quickly.”
That can be achieved through quicker-pay technology like mobile tap or Apple Pay. Or, at the extreme end, having no checkouts at all. Amazon’s first-of-its- kind concept, Amazon Go, uses in-store cameras, sensors and artificial intelligence to detect what shoppers put in their baskets. Customers can just walk out of the store, with payment being made via mobile app.
Taking a page from Amazon Go, Walmart launched its “Fast Lane” checkout system at a newly renovated supercentre in Toronto this past spring. The technology allows customers to use their My Walmart app to scan products as they shop. When a user is done shopping, they click “checkout” to receive a barcode they scan in order to check out, with payment processed through a card on file. The feature is one aspect of Walmart’s new “Urban Supercentre” concept and the company said a second location will launch in Thornhill, Ont. next year.
ROBOTS: The robots are coming … to aisle three. In the United States this year, Ahold Delhaize deployed “Marty,” a tall, googly-eyed autonomous robot, to 500 Stop & Shop, Giant and Martin’s locations following a pilot. The robot patrols the aisles, identifying hazards such as spills, and then alerts employees. (He doesn’t do cleanups himself.)
Walmart also rolled out an army of 1,500 robots at U.S. stores this year, and although they’re not as friendly looking as Marty, they’re arguably more useful. The “Auto-C” robot cleans floors, providing “a cleaner shopping experience” for customers while freeing up associates to serve the store’s customers better, according to Walmart. Three hundred additional shelf scanners, named “Auto S,” scan items on store shelves to help ensure availability, correct shelf location and price accuracy.
While there is some debate about robots taking over jobs, FMI’s Baker says by using robots, retailers can give employees the opportunity to focus on customers. “Instead of doing more of a mundane job of walking up and down the aisles looking for out-of-stocks or making sure the shelf tags are correct, retailers are looking to robots to do that. And that allows the employee to actually focus on the consumer and provide them that exceptional customer service that they’re looking for.”
SO, HOW DO RETAILERS DECIDE WHERE TO BEST PUT THEIR DOLLARS? “You need to start with the business need and the strategy, and then buy the technology to address that business need, as opposed to just going out and buying the shiny object,” says BDO’s Matusiak. He adds that retailers must ask: “What is the purpose of the technology? What are you trying to achieve with it?”
Also keep in mind that—shiny or not—in-store tech might require a lot of work behind the scenes. Take in-store navigation, for example. “A shopper wants tomato sauce and asks the app, ‘where is the tomato sauce?’” says Matusiak. “Depending how standardized the stores are, there is a lot of work in the background to make sure the system knows that the tomato sauce is mid-way down aisle three, and then have an app tell you that. So, although it’s a digital app, there is an infrastructure component to it, which could take longer to develop.”
Accenture’s Sahota says typically the best way to try out technology is to do small pilots and test-and-learns, tracking the business case, and ultimately scaling the technology. “Many retailers in Canada are piloting different technologies, but what they’re not necessarily doing is really understanding the business or the ROI in a sufficient way so they can maximize their investment,” he says. “As a result, they’re testing things for long periods of time and there’s a slow take-up in really scaling these technologies, unfortunately … Testing it quickly, measuring the ROI and scaling it quickly are quite crucial to get value out of it.”
And while retailers are inclined to dot every “i” and cross every “t” in a business case, it wouldn’t hurt to be a bit more flexible. “As we know, grocery margins are extremely tight and there isn’t a lot of room for mistakes,” says Deloitte’s Weintraub. “Unfortunately, though, in the spirit of new retailing … we’ve got to take some risks. Innovation doesn’t happen if you’re extremely risk-averse.”
This article appeared in Canadian Grocer’s September/October issue.