Technology is changing retail. Varying their predictions from “retail space is dead” through to calls for reality checks on hype, pundits appear to be as numerous and frenetic as the Retail Tech start-ups that threaten the status quo. Property owners, retailers and their labs are responding to a sense of heightened customer expectations, and these expectations are perceived to demand advanced technology.
These days there is no shopping activity i.e. Browsing, Payment or Fulfilment, that can’t be done, in some form, online. This doesn’t mean it will be done online but it does mean that retail space needs to figure out and concentrate on what it is good at to remain competitive.
Unlimited online stock, comparison shopping (Browsing) and the lack of queues at checkout (Payment) clearly offer convenience. In the case of grocery, online shopping can be automated to the point of no involvement at all, bar the initial set up of payment and delivery dates.
On the other hand, retail space retains a key technical advantage when fulfilling and order. Stores allow you to walk away with a spontaneously chosen item immediately. A convenience that only 3D printing, the Hyperloop or teleporting is likely to address.
But before you scoff, just as one might had one mentioned the possibility of flight to the ancient Egyptians, the ludicrosity of ‘instant relocation’ helps put Real Estate in its geographic and geometric context. Shopping happens in centres or in out of town destinations reached by that other profound piece of retail technology, the car.
Retail space reverses but with equal relevance the old Silicon Valley mantra: Social, Local, Mobile which suggests we’ll search and pay for everything on a mobile phone, but none-the-less still go shopping. Basically we’re really quite happy to travel (mobile), so long as we feel at home (local) and/or we are doing it with friends (social). It is not simply all about convenience. So, even though the technology to upload the entire shopping experience into the nearest available cloud is out there, doesn’t automatically mean that the consumer prefers it. Instead Real Estate investors and industry oracles need to figure out which item or combination of technology will stand out as the game changer, thus distinguishing them from the trinkets and passing fads.
The most profound technological changes, still persistent and relevant today don’t actually require any mechanics or electricity. Changing the store format to self-service, significantly increased turnover for Sainsbury’s and the many stores that followed suit in the 1950s.
And until we invent teleporting, simple technology is hard to beat. RFID (Radio Frequency Identification) and Beacons have been around for a long time and do a similar albeit more sophisticated job to barcodes. Barcodes were first used commercially on a packet of gum in 1974 and are still in use today. Despite the greater expense, RFID and Beacons do offer advantages in multiple product scanning and tracking product destinations. Sainsbury’s is only recently investing in this technology whilst Tesco’s is still holding back with tried and tested barcodes.
Click and collect as a shopping format is a surprisingly simple response to the Retail Tech boom and indeed one that the available technology could have enabled years ago. It is successful because it creates a genuinely new shopping option and yet still involves physical space. Successful retail innovations remain persistently low tech because, despite years of predicting ‘online’ tipping-points, we still enjoy ‘going’ shopping.
Author: Natalie Bayfield