Jan 19 2022
Data Center

NRF22: The In-Store Shopping Experience Is Due for an Overhaul

As consumers express eagerness to get back into stores, merchants must do more to get shopper journey data and modernize the experience.

Consumers are showing an eagerness to get back to in-person shopping — a fact that is a mixed blessing for many retailers. They certainly want shoppers to flock to their stores and buy their goods, but they gather far more data from online shopping transactions than from in-store and are now struggling to decide how to narrow that data gap.

“You compare online and offline, and it’s kind of crazy,” says David Dobson, the global industry director for retail, hospitality and consumer goods with Intel, in an interview. “The amount of information that’s known about what you do on your mobile phone or your computer, it’s phenomenal. They know everything about your purchase journey. In the store, they know nothing. It’s like a dark channel.”

Intel released new research detailing the preferences and frustrations of shoppers, two years into a global pandemic, during NRF 2022: Retail’s Big Show. It found that consumers in North America expect to do more than 62 percent of their shopping in person.

The research answers a question that many have asked in recent months: Will consumers even want to go back to stores after experiencing the simplicity and convenience of digital shopping? “One thing the research found is that, yes, there is that desire,” Dobson says, adding that retailers must do more to improve their in-store experiences and to “integrate the digital with the physical.”

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How Retailers Will Get Better Data About In-Person Shopping Journeys

Dobson said retailers are considering innovative ways to close the in-store shopping data gap and modernize the experience for customers, planting “digital breadcrumbs” throughout stores that will help them unlock clues to shoppers’ physical buying journeys.

For example, imagine being able to scan bar codes in the store with a cellphone and pay for them as you shop, skipping the checkout line entirely. The retailer gets a window into not just what a consumer bought, but also how that consumer navigated the store, how long they were in the store and what they might have considered purchasing but didn’t, Dobson says: “Now you’re starting to unlock information about that customer journey in the store by providing them a service that they find valuable.”

Retailers will also equip locations with modern surveillance cameras that use artificial intelligence software, helping managers understand traffic patterns throughout the store.

The AI can also help with loss prevention by searching for patterns of behavior know to be associated with theft, Dobson said. “It’s a big issue for retailers and a big hit on the bottom line. Is there a way they can use technology to reduce loss? You start to see more and more, especially in the self-checkout space, systems that help the store staff identify some of those situations. It’s low-hanging fruit.”

AI-powered surveillance cameras can even help stores manage inventory. “In our survey, one of the biggest areas of customer dissatisfaction is when the store doesn’t have the item in stock that the customer has come to buy,” Dobson said. “AI can really help with that. Using cameras, you can see what’s on the shelf and what should be on the shelf, and you can see whether you’re getting low.”

NRF 2022: Follow BizTech's coverage of Retail's Big Show.

Retailers Are Changing the Way Stores Are Configured

Analyzing store traffic patterns is particularly helpful now, as retailers make permanent changes in store layouts that they have experimented with over the past two years. Many larger stores are reducing the amount of floor space devoted to sales, using it to create pickup spots for shoppers who make online purchases.

Data-based insights into which parts of the store get the least traffic can guide decisions about where to locate such features.

“Especially among big-box stores, even before COVID, a lot of the retailers were asking themselves, ‘Do we really need this much selling space?’”

When it comes to physical stores, retailers are realizing that some of the changes they made during the pandemic — such curbside and in-store pickup — will be permanent, because customers like them, Dobson says. Others — such as the manual attempts to control traffic flow, often with tape on the floor, to support physical distancing — will be jettisoned.

“I would characterize today’s world as kind of optimizing that omnichannel environment. That’s the phase retailers are in today,” he says.

A big challenge they face is ensuring that they have flexible technology architecture at the store level, at the edge, in order to deploy new solutions as circumstances arise.

“Retailers have been very good at identifying and deploying great point solutions to solve individual problems,” Dobson says. “They need to think more holistically about the edge. You’d never build a data center out of a bunch of point solutions — you’d build a flexible architecture and put applications inside it. They need to think about their edge architecture in the same way, with a set of building blocks at the edge that allows you to grow and build on top of it.”

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