US brick-and-mortar retailers at the shores of transformative customer experience innovations might be hesitant to dive in. But that ocean is wide and deep—ranging from solutions that improve operational efficiencies to those that put AI at the forefront of a brand’s interactions with consumers. Here’s a peek at four cutting-edge retail innovations rising to the surface worldwide.
AI for Cashierless Checkouts
What would life be without the chatty grocery store clerk, commenting on your veggie selection? Shoppers in the Netherlands can likely provide some insight: Albert Heijn, the largest supermarket chain in the region, announced last fall that it would roll out “tap-to-go” cashierless checkouts in more than 1,000 stores. Albert Heijn is owned by Dutch retailer Ahold Delhaize, which also owns a handful of U.S. chains such as Giant Food and Food Lion. The system works through near-field communication (NFC) tags and smart store shelves, and shoppers can use either an app or a card to “tap” the tags. In the US, Amazon Go, in contrast, has made strides with retail innovations in cashierless checkout, but has yet to expand beyond a few small stores in major cities.
Facial Recognition Gaining Traction for Payments and More
Chinese consumers hungry for fried chicken can now pay for their meals at KFC through facial recognition technology, one of the more buzz-worthy retail innovations. In addition, Chinese ecommerce and internet juggernaut JD.com, which sells goods directly to consumers, has announced plans to open hundreds of unmanned stores that will use facial recognition for payment. But the technology is rife with possibility beyond payment, too.
Retailers could use facial recognition technology, for example, to help associates gain insight on individual customers’ purchase history. The innovation also has promising implications beyond customer recognition. Walgreens, for example, is piloting a line of smart coolers that scan shoppers’ faces to make inferences about demographics. It’s not quite facial recognition—which is still outlawed in public in some places—but could provide valuable insights all the same. The path forward for facial recognition retail innovations could be a tricky one: the parent company of numerous malls in Canada came under fire for using a facial recognition software without shoppers’ consent. The images weren’t stored so it wasn’t illegal, but questions about intent remain.
Back in China, the latest moves are in iris recognition, considered more reliable and stable than faces and fingerprints. Iris-recognition products are being developed for industries such as banking, public security and government. Why not for retail innovations, as well?
Immersive VR/AR to Make Shopping Easier
While US retailers such as Lowe’s, Sephora, and others are effectively using virtual reality (VR) and augmented reality (AR) technology to deepen shopper’s relationships with their products, they’re still laps behind Alibaba. The Chinese ecommerce behemoth, a competitor of JD.com, launched its VR shopping app Buy+ all the way back in 2016. It allows consumers to shop virtually in a way that’s much like playing a video game—though the purchases are real. VR is still considered a niche market in the scope of retail innovations, but Amazon has been taking steps in that direction. For one, it opened 10 VR shopping kiosks across India to promote Prime Day, as well as partnered with HTC to sell that Taiwanese electronics company’s Viveport VR apps through its online store.
Convenience is King
Interacting with a vending machine once meant just dropping in quarters and pushing buttons. In China, however, these devices have gone smart with AI-backed interactivity. Coca-Cola recently debuted a new machine Chinese consumers can use to do more than buy drinks. Users can return bottles and cans for recycling. The machine’s “face” can also change expressions based on sound interaction and facial recognition. Aside from the fun aspect of the tech, this retail innovation just might help Coca-Cola meet its sustainability goals. It would appear to be the perfect market: vending machines in China can now be “full-service convenience stores,” according to Digital Trends, with everything from fresh vegetables and prepared foods to cosmetics and books.
The Reality for U.S. Retailers
It’s true: There’s a lot of whiz-bangery in applications that take customer experience to the next level. U.S. retailers have their work cut out for them.
During NRF 2019: Retail’s Big Show in January, there was much talk of cloud technology, artificial intelligence/machine learning, payment technology and personalization. At the same time, Janet Yellen, former chair and board of governors for the Federal Reserve System, noted that, in 2019, “almost all economists are focused on a slowdown of a little bit over 2 percent. We will have a fiscal boost, but less of a fiscal boost.” In addition, trade tensions are of major concern.
Likewise, TotalRetail’s 2019 predictions for retailers highlight the increasingly tricky issue of tax compliance for US retailers that sell online, whether traditional e-commerce or marketplaces. “And with the Supreme Court decision in South Dakota v. Wayfair,” the site describes, “the United States is only beginning to catch up when it comes to sales tax compliance and remittance in the 21st century and the era of e-commerce. Progressive countries including Brazil, Italy, Poland and, soon, Hungary are beginning to process tax in real time. The US is far behind when it comes to calculation of sales tax.” Consumers will be the driving force behind where businesses need to collect and remit taxes, according to the site—and regardless of how it happens, it will be more important than ever to keep a close eye on it all.
It’s clear that US retailers have quite a few items on their to-do list. With limited budgets (and facial a potential economic slowdown), US retailers may continue to focus on technology that solve problems, beyond adding bells and whistles. If and when retail IT budgets tighten, the smartest strokes in retail innovation and customer experience might be behind the scenes. For those ready to catch the next wave, CB4 improves customer experience, delivers swift ROI, and is easy to implement. Learn more.
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