Hointer, a jeans store based in Seattle that was founded by former Amazon executive Nadia Shouraboura, points to one possible future for the retail industry. Based on the idea that men do not like shopping, the store has set out to remove as much of the pain – and human interaction – from the buying process as possible.
Before visiting the store customers can download the Hointer app and decide what they would like to try on. Robots deliver the jeans directly to designated changing room, items that do not fit are returned down a chute and clothes can be purchased without leaving the cubicle simply by swiping a credit card over a card reader.
The threat from online competitors is leading more traditional retailers to consider embracing even seemingly outlandish technologies. Online growth continues to outpace traditional bricks-and-mortar retailers. Where footfall in UK shops fell 0.9 per cent in September, according to the British Retail Consortium, online retailers notched up growth of 7 per cent, IMRG, the industry association for online retailers, says.
With online retailer Amazon rumoured to be planning its first physical store in New York, the threat from digital competitors is also moving off the internet and into the shopping mall or high street as well.
“High street retailers recognise they need to change,” says Peter Veash, chief executive of Bio, an agency which has helped to take retail brands such as upmarket department store Selfridges, cosmetics company Bobbi Brown and electronic retailer Dixons into the online era.
The rush to change sometimes translates into heavy spending. Worldwide, retailers are expected to spend more than $190bn on IT in 2015, according to a report by IHL, a global research company. Key areas of spending will be payment systems, data security, extending into new channels, and mobile shopping. A particular mantra being heard everywhere is “omnichannel” – by which retailers mean making shopping opportunities available in physical stores, online and on mobile devices.
So-called “beacon” technology is one of the ideas many retailers are excited about. This relatively expensive micro-location system allows stores to track shoppers’ mobile phones when they are close by and beam information and offers directly to their devices. In the UK, House of Fraser, the department store, Waitrose, the supermarket chain, and Michael Kors, a fashion house, are among those who have tested the technology, while in Sweden ICA and Coop, the grocery retailers, have also experimented with it.
A headlong adoption of technology does not always pay off, however. For example, customer opinion is still divided on self-service checkouts, one of the most visible recent technologies adopted by retailers. Twelve years after the first self-service checkout was installed in the UK, the phrase “Unexpected item in bagging area” has become a term used to describe customer frustration with the technology. A 2013 poll by Tensator, a customer management software producer, found a third of Britain’s shoppers had walked out of a store without buying the goods they intended to because of problems with self-service tills.
Some US retailers, such as wholesale warehouse club Costco and supermarket chains Jewel-Osco and Albertsons, have even removed self-service tills from stores because shoppers did not warm to them.
Mr Veash says the benefits of self-service checkouts depend on the situation. “If you are going into a luxury brand store you still want to speak to someone. But if you were going into Primark to buy one item during a busy lunchtime, you’d prefer a self-checkout.”
Geoff Brady, chairman of Harvey Jones, a maker of personalised kitchens that cost as much as a luxury cars, says that beyond using social media for some advertising, he is not in favour of any more digitisation in their showrooms.
“I think there is a lot of consumer frustration, nowadays. Some businesses don’t even display a telephone number on their websites, You can’t get in touch with them in person,” says Mr Brady, adding: “Sitting in your living room designing a kitchen on your iPad is not the same as speaking to someone.”
It may be that some of the ideas with the biggest impact could be almost invisible to customers. Clothing retailer Superdry, for example, is one of many testing to see if they can use radio frequency identification tags to track stock and to make sure that there are always plentiful supplies on the shelves.
Simple and cheap changes can also have big impact, says Jon Wragg, Superdry’s head of ecommerce. The company ran a trial where it gave shop assistants iPads equipped with chip-and-pin readers so customers could pay without having to go queue at a till. If an item was out of stock they could also order it for home delivery.
“We implemented it quite frugally – we just bought some iPad minis,” says Mr Wragg. “The payback, based on increased orders, was incredibly fast.” Superdry now plans to roll out shop-floor iPads to all stores starting in the first quarter of next year.
Payment is one area most retailers agree needs a revamp. Apple Pay, which began operating in the US in October, is the most recent and arguably most hyped of recent systems that allow shoppers to pay using mobile phones. Tim Cook, Apple’s chief executive, has said it will change the way we pay for things, and may eventually replace the wallet.
Not all retailers are fans of Apple Pay. A number of big US stores – including supermarket chains Walmart, 7-Eleven, department store group Kmart and electronics retailer Best Buy are even developing their own competitor system, CurrentC.
“I think the whole idea of payments is ripe to be revolutionised,” says Superdry’s Mr Wragg. “In the future we will be paying with wearable devices. I see a time when credit cards are a thing of the past.”
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