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The Retail Store of the Future
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Americans love to shop. It’s no secret that measures of how
much—such as dollars spent and year-over-year spending
patterns—are keys to understanding the nation’s economic
health. While that truth isn’t likely to change, the shopping
experience itself is changing rapidly. Indeed, the shopping
experience of tomorrow will be a lot different from today’s.
Retailers are adapting quickly. They are seizing new ways
to attract customers, engaging them before and after
they arrive in their stores. They are multiplying potential
customer touch points through a variety of targeted methods
including electronic media and social networking. Perhaps
most importantly, they are discovering new ways to enhance
customer loyalty by increasing their ability to stay connected
after the sale.
At the heart of this transformation are Internet-based
technologies and networks that can extend the shopping
experience outside the traditional bricks and mortar
environment. Harnessing them for maximum business
impact represents a major opportunity for retailers,
underlined by the dynamics of the new shopping
tastes of the connected consumer. In a report by
PricewaterhouseCoopers and TNS Retail, the “next
generation of consumers contains a more tech-savvy and
more diverse group that holds different values than its
parents.” The report goes on to say that the “one-size-fits-all
approach of the mass chain store format will not be viable.
Stores able to respond to individual tastes will become
dominant.”1
In this new environment, effective online strategies are
critical. According to market research firm Forrester, by
2013 more than 50 percent of all retail transactions will be
affected by the Web. Consumers have more access points
than ever before and are demanding convenience, choice,
and variety in their shopping experiences. Companies will
need to continually shift spending towards enabling online
channels or risk losing their competitive positions. The
future will be about delivering a customer experience that
seamlessly transitions between online and offline channels,
no matter where individual transactions take place.
A second trend is real-time analytics. In order to create
customized shopping experiences, retailers will by necessity
process ever more information through their networks,
tailoring interactions to individual customers. According to
Nigel Fenwick at Forrester, “socially empowered customers
are also influencing retail merchandising, with a major
shift in increased reliance on technology to analyze rapidly
changing consumer trends as they happen, which empowers
retail merchandisers to make quick decisions.”2
1 Ben Steverman, The Future of Retail, BloombergBusinessWeek, April 15, 20092 Nigel Fenwick, Industry Innovation: Retail, Forrester, July 28, 2010
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A third trend is the extension of the shopping experience
that goes beyond the store to reach consumers before
they go through the doors, and after they are finished
shopping. PSFK’s recent report, “The Future of Retail,”
describes a new retail environment where store fronts and
mobile applications build relationships even before the
customer steps in the door and walks down the shopping
aisle. Moreover, once inside, interactive displays and
mobile applications will enable retailers to customize each
experience, deliver superior customer service, and glean
valuable customer feedback for the person’s next purchase.3
At the heart of this experience is technology—technology
that increases a sales associate’s ability to help customers
and close sales. As demonstrated through these trends,
much of the technology revolves around a store’s ability
to securely manage multiple flows of information across
multiple networks. The following are just a few of the
developments that are either in stores today or coming to
stores in the near future.
In-Store Shopping Assistant and Kiosks – Shoppers
enter stores today with more knowledge than ever before.
Retailers can embrace this rather than fear it by providing
relevant product information through multiple possible
channels. For example, it is likely that a store will offer
patrons an in-store shopping assistant via their mobile
devices. Consumers will walk down the aisles and as they
see items they want, scan the products with their mobile
3 PSFK, The future of retail, 2009, http://www.psfk.com/future-of-retail
The Retail Storeof the Future
Break RoomTraining
Retail DigitalSignage
Digital PhotoKiosks
AutomatedInventory
Management
Loss Prevention/Video Surveillance
Auto
In-StoreConcierge
Mobile Workforce/Handheld POS Mobile Ordering/
Local Pickup
POS/RegisterPCI CompliantArchitectures
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devices either through camera barcode readers or the
camera itself. With the barcode or picture, a dedicated store
application will display product descriptions, reviews, and
“how to” videos to demonstrate the product in action. For
those who do not have mobile devices, one will be provided
via a dedicated booth or through customer service.
A frequent point of frustration among consumers is the
inability to get in-store assistance. In the retail store of the
future, that problem may disappear. Live customer support
kiosks were one of the newest technologies showcased at
the National Retail Federation convention in January. A
customer picks up a telephone at a kiosk and is immediately
connected through live video to an expert. The expert is
armed with a variety of tools to satisfy customer questions,
ranging from store maps to product details, inventory status,
and access to the Web.
Electronic Shopping List – Mobile applications will also
serve as in-store “e-shopping carts,” allowing consumers to
place items there instead of lugging them around the store.
When it is time to go, consumers can decide to purchase
the items and take them home, or to have the store deliver
them from their online store.
In-Store Electronic Concierge – At the end of every aisle
and throughout the store, consumers will find touch screen
displays. By tapping the screen and searching for an item,
the electronic concierge will tell the consumer where the
item is, and in the event it is out of stock, which nearby
stores have it.
Mobile Ordering, Local Pickup – Consumers are busier than
ever with lots of shopping to do and not much time in which
to do it. Retailers will help consumers save time by enabling
them to make purchases using their laptops and mobile
devices, securely transmitting data to the store for order
processing. By the time customers get to the store, their
purchases will be waiting.
Video Employee Learning Centers – Since consumers now
have product information at their fingertips, retail staff will
have to be more knowledgeable than ever. If an employee
doesn’t know the answer to a customer’s question, it is
increasingly likely the customer will be turned off to a sale.
To give staff the knowledge they need to help retailers
succeed, before every shift store employees will check in
at an interactive video display area. There they will hear
about the day’s promotions and get updates on the store’s
activities. Additionally, employees can text in questions and
get answers back from management via their cell phones.
Automated Inventory Management – Inventory management
will be automated. Goods will be on automated inventory
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racks so that management always knows when and what
to order. Branch stores will ‘talk’ to each other, enabling
managers to quickly and easily shift inventory from one
store to another to make sure they optimize supply across
stores.
Transaction-Based Video Surveillance – Video monitoring
for security and to reduce shrinkage and sales irregularities
will be based on activity. For example, video capture would
occur when there is a ‘no sale’ transaction at a register
or when certain inventory is accessed. By making video
capture activity-based, management will not have to weed
through hours of tapes to find out what happened with
inventory or at the cash register. This will not only reduce
shrinkage, but also will help gather marketing intelligence
on what does and does not appeal to customers.
Security of Multiple Data Streams, Multiple Networks
– All of the data running through multiple data streams
and networks needs to be secure. Payment Card Industry
(PCI) compliance requires a high level of security for each
transaction and the ability to guard against threats both
wired and wireless. Information needs to be able to flow
securely and efficiently with built-in redundancy. Self-
configuring VPNs and firewalls using intelligent routers
will make the whole process of becoming and staying PCI
compliant easier.
At Hughes, we’re working with many of the leading names
in retail to build this new technology infrastructure that
will support the retail store and shopping experience of the
future. And because these technologies are so important,
we are building them with increased reliability, higher
performance, and greater security than ever before. For
over a generation we have helped the world’s leading
retailers use information technology as a competitive
advantage. As retailers become more sophisticated in the
use of technology to boost sales and increase their store’s
efficiency, Hughes is well-positioned to help retailers build
their own “store of the future.”