What are the challenges facing smart retail in the 2020s? - The EE

What are the challenges facing smart retail in the 2020s?

Jaume Portell of Beabloo

In this interview Jaume Portell, CEO and co-founder of Beabloo, tells
Jeremy Cowan, how the retail sector can transform itself for its customers.

The Evolving Enterprise (The EE): How can brands transform the customer experience? Is it profitable for brands to digitise their points of sale?

Jaume Portell, Beabloo: Brands can transform the customer experience by being present in every step of the shopping journey. This reduces friction and makes sure the customer gets the right message, the right answer and the right service at any given moment. Moreover, this ensures that every relevant data point is captured and sent back to headquarters so that marketing, product design, customer service and other teams can clearly see their successes and failures, as well as the positive and negative impacts of their choices in the real world.

The most advanced brands and retailers understand that their points of sales are powerful media channels that provide a unique opportunity to get in touch with customers and deliver remarkable experiences. Once they understand the power of in-store digital communication and the value of data, they naturally embrace the deployment of retail technology platforms to implement a truly smart retail store. This has introduced respectful sensing and artificial intelligence into every step of the customer journey.

Smart retail store technologies 

A smart retail store has technologies like digital signage, people counting, computer vision (to sense what customers like the most), sensors that measure customers’ physical interactions with products, and sales analysis. Then, the artificial intelligence engine kicks in. By using predictive algorithms, it can learn what’s going on in the store. For example, it can figure out the correlation between showing certain digital content and purchase behavior, or learn where sales staff interact most with customers to determine where they should be to deliver the best possible customer experience and improve conversions.

Artificial intelligence and smart retail

Once artificial intelligence (AI) learns the rules, the store pushes the right content at the right time of the day for its audience based on the weather, the time of the day, the day of the week, and the demographics of the audience. The store will continue to learn by itself and become a real actor that transforms the in-store experience by predicting and controlling what to show and where to show it. Soon, it will also determine how much products should cost.

Data proves that companies with a better customer experience index outperform their competitors by more than 30%, so investing in digitising points of sales generates measurable profits in the mid-/long-term. Some recent studies have predicted a 1-2% increase in retail and brands’ EBIT margins directly from implementing technologies that improve the customer experience. Our experience has proven that the technology pays for itself within 2-3 months of operations.

The EE: What are the retail challenges in the 2.0 era? Is e-commerce an ally or an enemy for retailers?

Jeremy Cowan

JP: E-commerce has reduced the friction of shopping for some products and services substantially. Yes, it has become a challenge for those retailers whose main competitive advantage was pricing and product catalogue. However, it has also created new opportunities for newcomers and allowed existing companies to reinvent themselves. E-commerce players and their efficient, but poor, customer experience has helped brick and mortar retailers shine thanks to their in-store customer experience.

While e-commerce was growing, stores started implementing changes. They started to smell better, their music was better at expressing their brand’s personality, and their in-store customer experience was getting more and more immersive. Stores learned to react to customers and personalise content for each individual. For the first time in many years, brand managers had the data to learn continuously so they could fail fast and learn fast, similarly to what e-commerce sites had been doing for many years.

So, yes, e-commerce has had a negative impact on some retailers, but it also positively influenced many brick and mortar stores to focus on what makes them unique, such as their local presence and excellent customer experience. For years to come, physical stores will continue to deliver the best content, the most advanced sound, and the truly unique experience of discovering products by touching, smelling and sensing them. Physical stores connect with peoples’ satisfaction mechanisms in a way that no device can mimic.

The EE: How can measuring audiences help small businesses?

JP: Small businesses have an impressive impact on sales for products from the largest and most renowned global brands. However, what happens inside stores, their sales data, and their interactions with customers are almost a complete mystery. Uncovering it would create an immense opportunity for both the small retailers and big brands moving forward.

Small retailers do not have the budget for marketing campaigns beyond the bare minimum of placing some marketing materials from the brands they sell around the store. Usually, they do not have the know-how to extract deep insights from their sales records. Often, the point of sale (POS) software they use isn’t helpful for learning from customer preferences and purchases.

Here is where the opportunity of a digital transformation becomes clear. Big brands have the best marketing content in the world, because they can hire celebrities and spend a lot of money for content creation and storytelling. But small businesses can use artificial intelligence to connect smart digital signage content in stores with analytics (on customers and sales) to learn, improve and deliver a customer experience at the same level as large retailers.

AI manages the small retailer’s marketing campaigns and automatically selects content from the brand that best suits customer preferences on a Monday morning, then changes it later in the afternoon or when it starts raining. Reacting quickly to give customers what they want is what brands have been trying to do for ages. Technology can help small retailers reach out to their consumers and deliver amazing experiences.

Source: https://www.theee.ai/2020/02/24/1300-what-are-the-challenges-facing-retail-in-the-2020s/

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