Can emerging technology maintain personalisation in the age of cashierless retail stores?
The retail landscape is fast evolving, shaped by changing customer demands, the growth of online retailers, increased competition and advances in technology. Regardless of these changes, the customer remains at the heart of the retail ecosystem. Retailers need to do all they can to deliver an excellent customer experience, streamline the shopping process and meet shopper requirements.
Many retailers are looking to technology as the solution to many of the challenges they face. This includes ongoing efforts to make shopping in bricks-and-mortar stores more attractive, more engaging and more convenient – all with the aim of attracting customers and getting them back in-store.
The use of technology can be seen in everything from using experiential marketing tactics, such as virtual reality / augmented reality, to digital signage and endless aisle technology — each bringing new dimensions to the customer experience.
Growing use of cashierless technology
One approach in particular that is being rapidly adopted across the globe is the cashierless store. The concept has grown quickly, pioneered by Amazon with its Amazon Go stores in the US, and quickly extending to Sainsbury’s in the UK, Decathlon in the Netherlands, Bingobox in China and Walmart in Canada.
The concept involves shoppers using an app to scan their selections as they add them to their basket, and then paying for them via the app, effectively bypassing the traditional point of sale and exiting the store without ever having to wait at a checkout.
The major benefits for shoppers are clear – convenience and speed; no waiting in a queue at a busy checkout or getting delayed by the payment process. The main disadvantages, however, are the absence of the personal touch and the perceived lack of personalisation, resulting in a purely transactional experience.
While retailers might be taking human interaction out of the equation, they still need to know their customers, understand their needs and behaviours, and engage with them if they want to build long-term and grow engagement.
Why the human touch is still important
One of the most important elements of customer experience is human interaction — a sentiment supported by recent research from PwC which found that as technology advances, three quarters of shoppers actually want more contact with people. With competition so fierce, bricks-and-mortar organisations need to work harder than ever to entice customers into store. And it’s the ability to provide this human element that is the key differentiator that physical stores have over e-commerce platforms. As cashierless stores become more commonplace, retailers that go down this route may be hard-pressed to simultaneously meet customers’ desires for human interaction and personalisation.
Achieving the right balance
The question then becomes how do retailers balance shoppers’ desire for convenience with their need for personalisation and human interaction?
First, cashierless doesn’t necessarily mean stores without staff. These locations offer customers an improved experience, streamlining the payment process and eliminating queues completely. But despite these elements being automated, there is still a need for customer service.
As a result, cashierless stores should be less about automation and more about freeing up store staff to help customers where needed, whether that’s offering advice, locating items within the store or being available if anything goes wrong. There’s also an added benefit; interaction between staff and customers actually helps create an emotional connection with the brand and helps build brand loyalty.
Second, there is actually an opportunity for increased personalisation. To be able to shop in a cashierless store, shoppers need to download an app, enabling retailers to collect a wealth of customer data which can be used to leverage customer insights. Generated at the virtual point of sale, this data can be analysed to better understand customers and develop targeted, relevant and personal offers based on past and current purchases, frequency of visits and other insights.
Striking a balance
Technology exists to make all our lives easier, and this is no different in the retail sector. However, retailers need to strike a balance between using more technology to improve efficiencies and their customers’ need for good service and personalisation.
Importantly, convenience and customer engagement don’t need to be mutually exclusive. When technology is deployed in the right way, it can actually improve the customer experience and personalisation efforts.