The New Digitally Transformed Store: A Hub For Technology Innovation

By Nick East, Zynstra

The meaning of brick and mortar retailing has forever changed. However, if you can recall the trending topics from just a few years ago, the debate between retail apocalypse and retail renaissance was in full swing, with the majority of industry watchers touting that it was the end of the physical store as we know it. Today, while the store has definitely undergone a transformation, the metamorphosis has led to a new concept for the physical store – a hub for technology innovation.

Retailers across the board have begun to take advantage of their physical space and incorporate digital components that not only enhance the customer experience, but also utilizes their physical space in new and innovative ways. For example, retail giants like Walmart have diligently worked throughout 2018 to add digital in-store components. This included self-checkout kiosks and in-store associate tools such as Walmart’s Dotcom Store, which allows associates to instantly order items from the retailer’s online store for in-store shoppers. Additionally, Amazon took the in-store shopping experience one step further with its Amazon Go concept, touting “no lines, no checkout,” with the ability for shoppers to just come into the store, grab the necessary items and go. A number of other leading retailers experimented with scan & go capabilities, digital displays, smaller store formats and updated delivery services to fuel the demand for click & collect.

In all, the focal point of these initiatives has been tech innovation WITHIN the store. Not everyone has the technology resources on the scale of Amazon and Walmart, however they recognize the need to transition their existing store environment to meet the demands of today’s customers. With this in mind, they may be wondering where to begin their journey toward in-store digital transformation. Below are a few factors that retailers should consider as they work toward an in-store technology innovation hub:

Review Your IT Infrastructure Before Innovating

Speed of innovation has become a key competitive differentiator, especially when it comes to deploying new in-store IT innovations. However, before creating these digital initiatives, the retailer’s IT infrastructure must be ready to support and promote innovation in order to be successful. Legacy IT infrastructures have grown over time with no thought toward enabling the innovation and rapid deployment of new applications and services. Because of this, retailers find they are having to fight new battles with old technology, not designed for purpose. As such, in-store IT must become a platform for innovation at the core of retailers’ investment strategy. This infrastructure, across both back office and front of store, is a critical determining factor when assessing the level of customer service innovation, staff productivity and the IT bill of materials and cost. The right infrastructure can be transformational, providing a platform for increased ROI, innovation and engagement. Conversely, the wrong infrastructure can be a barrier to achieving business strategy, while at the same time being highly costly and inefficient. Perhaps the biggest barrier to change is the belief that achieving innovation requires you to go through an expensive ‘rip and replace’ exercise when in reality the technology available now can transform your existing in-store IT.

Connect Your Online And In-Store Digital Components

While physical store sales are forecast to represent 80 percent of 2021 retail sales, the reality is that many shoppers look at a retailer’s eCommerce site before journeying to the store in order to do research on items they’re interested in – or even purchase with the intention of collecting in-store. Retailers should ensure that their online and in-store digital components work in conjunction to offer shoppers the complete experience. For example, the level of personalization must be enhanced. If the customer created an online shopping list or bookmarked particular items, the in-store technology touch screens should account for each customer’s digital profile and quickly answer the customers’ needs in order to take their experience one step further within the store. In the same manner, any promotional offer made available via the retailer’s mobile app on visiting the store should immediately relate to the customer’s historical preferences.

Manage Your Store IT From The Center

Many retailers have a mixture of old and new appliances all running on different operating systems with IT teams responsible for visiting stores to eliminate common faults or security threats. The burden on IT teams and the cost of downtime in-store is significant, not to mention the damage to brand reputation. Smart retailers are now looking at virtualizing their in-store IT onto a smaller physical footprint and managing the IT from the cloud. This enables them to eliminate costly store visits, provide a more secure IT infrastructure and above all manage all the stores from one central location achieving huge operational efficiencies.

Empower Store Associates Within The Store
Customers expect new service levels in-store to complement the online experience. This requires constant innovation, and the frequent and reliable delivery of new store applications, from the point of sale to the back office. At the same time, the role of the store associate is changing to a provider of support and advice, increasing their value to the business. Store associates represent the face of the business, and as one of the highest store operation costs also can enable the drive for greater value – if empowered. Single function devices, such as fixed cash registers, limit their efficiency and ability to serve. As retailers look to digitize their physical store, associates will be better able to drive value, and will be far more productive if they are empowered with more multi-functional devices in-store. These capabilities can play a key role in elevating the customer experience.

As the store continues to build on its role as the key customer experience differentiator, forward-looking retailers are moving to an IT environment that provides the flexibility and innovation that they require. As well, they are looking to a provide a seamless experience between their online and in-store components and empower their store associates to truly deliver an innovative in-store experience.