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2022 largely means a return to brick-and-mortar retail as the wave of COVID-19 pandemic restrictions and store closures ends.
Given the pullback in e-commerce spending and lower sales by retailers amid inflationary pressures, overall tech budgets may not be as high as they once were. This puts in-store innovation in a bind.
According to a July report by CB Insights, global retail technology investment fell 43% to $13.2 billion in the second quarter of 2022, compared with about $23 billion in the first quarter of 2022. Additionally, retail tech deals fell 21% sequentially, with only seven companies going public, compared to 11 in the previous quarter.
However, in-store technology and innovation isn’t completely dead. Shoppers may have loosened their online buying habits somewhat, but brick-and-mortar stores are not immune to the persistence of digital transformation. In fact, according to CB Insights, funding in store management technology grew in the second quarter, rising 25% sequentially to $3 billion, compared to $2.4 billion in the first quarter.
According to a Deloitte report by Rob Harrold and Adam York, retailers can still benefit from innovations in convenience and may want to consider in-store personalization to differentiate themselves in the marketplace.
What types of technology are bringing convenience and personalization to the in-store experience this year? Which ones are likely to stay?
Buy online, pick up in store services are still sought after even as pandemic restrictions have eased. In March, Insider Intelligence data predicted that U.S. shoppers will spend $95.87 million On BOPIS this year – up 19.4% year over year.
BOPIS, sometimes called click-and-collect, It appears to be a win-win during pandemic restrictions, as shoppers can support brick-and-mortar stores without having to spend time in closed public spaces.
The holidays have the potential to show the strength of BOPIS.39% of shoppers expect BOPIS to make up 50% or more of their purchases this season, according to Report shared by Bluedot with Retail Dive.
That said, overall interest has declined since 2020. According to Bluedot, about 78% of shoppers plan to use BOPIS in some way this season, down slightly from 81% in 2020.
Not all consumers are more likely to use that option, though.Millennial Men in Urban Environments More likely to use BOPIS, according to Morning Consult.higher income shopper Families are also more inclined to use this method of purchase.
While several retailers have added BOPIS and reported positive results from the service — including Target, Sally Beauty and Office Depot — others have just joined. Wubao released its own buy online, pick up in store plan last month.
BOPIS requires technology or systems to be effective and successful for all parties involved, a focus for many retailers.
Lokesh Ohri, head of Deloitte’s digital practice, told Retail Dive that retailers are “starting to think about productivity, efficiency and cost that everyone cares about most”. “All the technology involved in buying online, picking up in store and doing it effectively at the store level, whether it’s picking in the front desk or picking in the back room… has always been around and is expanding rapidly.”
2. QR code
That weird little black and white square that looks like a Rorschach test? Yes, retailers — not just restaurants — are using these.
QR codes are square barcodes that can be scanned with a phone camera to lead to more information or payment portals.The technology is actually invented decades agobut quickly gained adoption during the COVID-19 pandemic, when menus and person-to-person payments were put on hold.
“It’s everywhere in the market,” Ohri said. “But if you and I talked about it seven years ago, QR codes didn’t have all the hype.”
QR codes have the potential to be a way for customers to discover more about a product, Ohri said, adding that QR codes “give them a better understanding of buying that product, making decisions, and comparing other products.”
in January, Walmart launches The company said at the time that the interactive store prototype at its incubator location in Arkansas features QR codes along with other in-store technology to help “create opportunities for digital exploration.” Instacart last month start rolling out QR code As part of an expanded suite of connected technology products in partnership with partner retailers. also, including Amazon The technology launched at its first fashion retail store in May, with codes that provide more information on sizing and reviews.
These cases show that QR codes can be delivered Personalized shoppers may need advice based on what they’re asking, but it also creates a level of convenience for employees who can spend more time on operational tasks.
3. Store operation
Consistent with Ohri’s belief that retailers think more about efficiency and productivity, the technology behind store management and operations continues to evolve.
This includes technology that helps automate tasks— free labor — Use a more data-driven approach to understanding inventory levels.
According to a separate report from CB Insights in April, the top equity deal in the retail store management space in the first quarter of this year involved a $500 million deal for inventory optimization company Relex Solutions.Retail unicorn Swiftly Systems — an e-commerce tech company now focused on brick-and-mortar store optimization — has acquired Second $100 million investment in September. For the second quarter, wholesale marketplace platforms where retailers connect with brands topped the list with $416 million in the quarter.
Workforce management is everyone’s biggest concern right now because of its potential to leverage technology to save costs, Ohri said.
“They’re looking at workforce management, communication, compliant store tasks, store audits, and the use of digital tools to simplify and standardize these activities,” Ohri said. “So what used to take 11 to 13 hours to complete now takes eight hours to complete.”
A unique approach to store management technology is Lowe’s digital twin store. In September, the home improvement retailer announced it was experimenting with a digital replica of its store where employees could Interaction and visualization Storing data. The concept was initially introduced in two locations and allows employees to use augmented reality headsets to perform various tasks, such as viewing available items on higher shelves, without the need to climb ladders.
4. Slimming Cream Enhancement
This year many brands are trying to enhance the fitting room experience.
H&M starts using smart mirrors some COS stores In May, customers can get personalized styling advice from the mirror as it senses the products a shopper brings — including their size and color. Customers can request that new items be sent to their locker room without leaving the space. The retailer has also begun testing mirrors on showroom floors that can help with virtual try-ons and returns.
Similarly, Savage x Fenty opened its first Las Vegas store in January, which features a fitting room digital kiosk Shoppers can use it to scan products to see prices and see similar items.
This approach might be thought of as a way to release associated time. However, despite its increasing adoption, it may not be that simple.
“I don’t think virtual fitting rooms are as effective as we would like them to work,” Ohri said. “I’ve found that anyone who’s ever deployed them…they’ll tell you that the number of associated activities doesn’t actually No drop. Because first, consumers need to learn how to use that tablet because it’s often not that intuitive. Second, they need help with the product they have anyway. Third, they care a lot about data and privacy. So it’s actually increased store-related tasks instead of reducing them.”