Alone with the cart. How retail teaches shoppers new technologies
Entrepreneurs had to reconsider their development models, invest in technology implementation in order to make the purchase process convenient and safe for the client. Mikhail Gleba, CTO of IXR, a developer, integrator, manufacturer and supplier of complex digital solutions for retail, spoke about which technologies are changing the format of a modern store.
On the drivers of technology market growth in retail
2020 shook up the retail industry. The business had to forget the old development strategies in order to survive against the background of a shortage of personnel, a growing load on the IT infrastructure and general uncertainty. It is believed that grocery retail has won the most: 6 out of 7 companies, according to KPMG, saw a twofold increase in sales, including due to the growth of the online segment. According to the study, such a leap would have been impossible without a quick response to changes, including through the digitalization of their business: the development of online services, express deliveries, an increase in the share of non-cash payments and mobile commerce. It follows from the KPMG report that more than half of the respondents decided on these innovations during the pandemic. The process has not always been smooth, with retailers eliminating service outages and tailoring solutions to market needs.
The business is now continuing to crossover the offline and online segments and is looking for new tools to improve the shopping experience. We have collected the top 5 technologies that can significantly affect the development of retail in the near future.
Traditional ticket counters with a long line of disgruntled customers are a thing of the past. Business introduces self-service cash registers (CSR, self check-out) - devices that allow you to independently, without a cashier, scan and weigh goods, pay for purchases with a bank card or using your phone.
Such terminals not only allow avoiding social contacts, which remains important in the era of Covid-19, but also increase the speed of service, increase traffic and sales point revenue (up to 10%), and reduce the load on regular checkouts (up to 50%).
In the face of a shortage of line personnel, CSR saves the situation, as they can work autonomously 24/7, replacing from 2 to 4 cashiers-sellers. The benefits of using self-service checkouts have already been appreciated by large Russian retailers: X5 Group (Perekrestok, Pyaterochka), Vkusville, Magnit, OKEY, Auchan, Lenta. Non-food stores, cinemas and even hotels for self-registration of guests can also introduce CSR.
The share of buyers who now use CSR ranges from 30 to 50%. InReality research confirms that 70% of customers value their time by choosing stores with the ability to pay for their purchase and get to know the product personally.
The Smart Cart is another way to reduce shopping time for visitors and demonstrate the power of contactless shopping. In classic modifications, the system works like this: the customer scans the goods using an RFID-tag reader installed in the microcomputer on the handle of the trolley, checks the shopping list on the screen and then goes to pay for them at the checkout or self-service checkout. Thus, the client participates in the loyalty system, receives personalized discounts, controls their purchases and pays for them without taking them out of the cart. Another way is to scan goods with a scanner built into the cart and pay by credit card right on the same device.
In more advanced models, the visitor does not need to scan every product. The carts are fitted with three computer vision cameras that evaluate each item from different angles. The software then searches the database for information about the given product in order to accurately identify it and record the cost. On the screen you can see all the information about purchases, discounts and the total cost of goods.
A prototype of a smart cart was introduced a few years ago, but the popularity of such devices increased just in 2020. Last summer, Amazon launched Dash Carts for shopping in supermarkets of a new type of Amazon Go. The cart is equipped with cameras with computer vision technology and built-in scales. When customers cross a special lane at the exit, the system automatically debits funds from the customer's card.
Other American companies have moved a little further in technology - the retailer Kroger and Caper, a developer of systems based on artificial intelligence. A smart cart in their modification is able not only to identify products, but also to select recommendations for a specific client. If he takes muesli, he will be advised to add milk to the basket, and if he chooses spaghetti, the cart will prompt him to find a suitable sauce. Thus, the average basket amount may increase by 18%, according to the company.
Both checkout counters and shopping carts reduce queuing time, but purchases are traditionally paid with a bank card or phone. Biometrics technologies allow you to speed up the payment process with the help of a new camera that reads the biometric data of the client.
Now in Russia this technology is available to buyers of the Magnit, Perekrestok, Pyaterochka chains, as well as Prime coffee houses. The services are being implemented in partnership with Sberbank.
As retailers explain, payment by sight works on a tablet with a 3D camera, which, due to high recognition accuracy, reads the customer's facial features. The bank, in turn, guarantees security, improves facial recognition methods in order to avoid compromising biometric data.
In our experience, the use of biometrics reduces payment times and increases the safety of purchases. This affects the increase in traffic in the store, and also has a positive effect on customer loyalty. In addition, the buyer cannot “forget” the biometrics at home, unlike a bank card, smartphone or loyalty card.
However, the speed and efficiency of the introduction of promising technology will depend on quick and reliable identification when making a payment, the creation of a unified biometric system and, of course, the willingness of people to share their biometric data with banking services. Of course, without an extensive system of devices with a built-in biometric payment function, the spread of innovation will be impossible.
Personalization of food
Personalization is an important trend in retail. A business wants to know more about its customers in order to offer them certain goods and services. According to research, 80% of consumers are more likely to purchase from a brand that offers them a personalized experience. The beauty brand Sephora revolutionized this business with its mobile application that uses augmented reality (AR), fine-tuning of recommendations, and sending messages based on user behavior. The company's ROI from the new strategy is 6 times higher.
Grocery retailers are also looking for opportunities to explore new personalization scenarios to get closer to their customers. The Otri startup, in which Azbuka Vkusa has invested, allows generating individual nutritional recommendations and ordering specially selected products based on health indicators at home.
First, the technician visits the client's home to take blood samples. Further, the neural network evaluates the results of the analyzes according to various parameters and, based on this, gives recommendations for a balanced diet. These tips are also verified by doctors. The application independently forms a basket of suitable products from the Azbuka Vkusa catalog. The value of the service is that the client can avoid harmful products if a person has allergies, intolerances to certain components, and, conversely, add more fruits or vegetables containing essential vitamins to their diet. According to the retailer, people may believe that they are eating well, but receive less real benefits for their bodies.
According to KPMG, about 80% of surveyed retailers see big data analytics as a promising technology that is used to forecast demand and improve customer experience.
Big Data is now used at all stages of the retail process: determining the location for the next store opening; development of in-demand products and immediately forecasting the demand for these products; revision of pricing policy; identifying the target audience and identifying the best way to approach it.
According to analysts from KPMG, before the implementation and effective use of Big Data, it is necessary to establish a process for handling data in an organization: to organize the collection, processing and centralized management of information. In the experience of researchers, in some organizations valuable data is contained in many different Excel files, and for their analysis they use the same Excel functionality or "self-written" databases and scripts.
With skillful handling of the received data about customers and their behavior, search queries, it is possible to analyze abandoned carts, responses to marketing mailings, the use of bonus points, etc. ready to make a purchase in order to bring them to the site or to an offline store in the most efficient way.
According to data service providers, the use of big data is most in demand in the perishable market. Grocery retailers must accurately predict consumer demand (for example, for cheese or milk) in order to organize the logistics and not pick up excess goods.
The sources of big data collection are Wi-Fi sensors and Bluetooth beacons that identify devices, smart cash registers, data from mac addresses, analysis of purchases by loyalty cards, video recordings, analysis of social networks to predict trends, etc. In addition, retailers today collect data using mobile operators. This allows you to prepare personalized offers, taking into account the personal preferences of the client, the average bill and even the current geolocation.
For example, thanks to geo-analytics, some American retailers may estimate that customers are much less likely to come in upmarket neighborhoods with wealthy populations, although their orders tend to be more expensive than neighborhoods with less affluent populations. And thanks to the weather forecast, the business can guess the preferences for certain products. From the non-obvious: Walmart learned that demand for steaks is higher when it is warm and windy, and sales of ground beef are better in warmer temperatures and less wind. Russian online retailer Ozon, in turn, found that the demand for books is increasing as the weather worsens.