8 MINS READ
Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
Highlights
- In-store shoppers expect safe and convenient shopping and instant everything—product information, payments, and fulfillment.
- As customers increasingly use their own technologies (smartphones) to shop in stores, contactless commerce, powered by digital technologies, can emerge as a game changer.
- Contactless digital interactions bridge the gap between in-store and online experience, ensuring greater customer loyalty and higher wallet share during the holiday season and beyond.
In this article
In this articleinpage
Give shoppers more autonomy with contactless commerce
Today, consumers demand safe and convenient shopping, and they want everything—from product information and payments to fulfillment—to be instant.
About 87% of shoppers want curbside pickup to continue and 65% prefer payments and other transactions to be contactless. Innovative retailers are redefining benchmarks by enabling contactless commerce—a collective term for contactless experiences in fulfillment, payments, and products. Contactless commerce not only enables touchless interactions across the entire shopping journey, it also ensures safe, personalized, and frictionless shopping experiences and provides more autonomy to shoppers. Here is an example of contactless commerce in action (Figure 1).
What contactless in-store shopping looks like
The idea is not to make transactions devoid of all human touch, but to make them consistent through predictable experiences and processes not dependent on people working at the store. Contactless retail comes with huge upsides: greater customer loyalty and retention, and a higher percentage of wallet share.
Bridge the gap, extend the online experience to stores
The democratization of new-age technologies, especially digital, has created immense opportunities to drive superior customer experience.
Digital technologies that enable contactless commerce to bridge the gap between in-store and online experience will be integral for seamless omnichannel retail experiences.
Product information and discovery: Customers who buy online have access to a plethora of information throughout the shopping journey, a facet missing in an in-store experience. A simple product barcode scanner can give in-store customers access to product reviews on their mobiles. Technologies such as electronic shelf labels (ESLs) and computer vision can bring to life content on product usage and DIY instructional videos. Augmented reality (AR) can make product discovery an immersive experience. Retailers can gather insights from these interactions to personalize customer experiences and build loyalty.
Payments: In-store shoppers increasingly want contactless digital payment options—through facial recognition, in-app payments, or phone wallets. Non-digital tender methods such as cash transactions can be enabled through dedicated payment kiosks or by allowing cart transfer to a self-checkout kiosk. By offering additional digital services like ‘buy now, pay later’ (BNPL) or ‘bill me later’ (BML), which offer the convenience of low monthly payments, retailers can increase conversions.
Fulfillment and delivery: Often, a bad fulfillment experience spoils an otherwise impeccable in-store or online experience, making customers to disregard the high points of the overall journey. Many retailers have extended their shopping aisles to (literally) the curbs, allowing shoppers to complete shopping without having to leave their cars. They have long experimented with buy-online-pickup-in-store (BOPIS) model. Dark stores are gaining momentum as stores with low footfall are repurposed as fulfillment hubs, cutting delivery times.
Post purchase: Conversational AI is increasingly being adopted for query resolution through contact centers. AI can understand natural language and respond to customer queries just like a human. For returns and refunds, customers don’t need to stand in queues. They can talk to a virtual assistant to register returns and drop off items at a returns station. A combination of computer vision, image recognition, product dimension matching, and customer profile that link products to customers can automate refunds. The post-purchase support can also be proactive. Retailers can track the journey of perishables even after they are sold. When products near expiry, retailers can trigger refill recommendations based on customer profile, creating value for customers and giving them more reasons to stay.
Contactless commerce maturity levels
Digital savvy retailers have a leg up with the technology constructs required to succeed while traditional retailers are taking measured steps.
Many retailers see the surge in contactless commerce as temporary and are making system and process-level changes to ride this out.They are migrating applications to cloud, adding people to call centers, and relying on third parties to address scale. A few others are going all out to retool their ecosystem to provide top-notch services, be it newer fulfillment options like buy online, pick up in store (BOPIS) and dark stores, newer payment options (buy now pay later or BNPL, and subscriptions), or product information. While the goal is to ensure sufficient headroom and scale in infrastructure, often, it outstrips the relevance and tolerance of business processes, reducing the RoI to a fraction of what it can be.
Digital natives such as Amazon have a leg up in this new world order with the technology constructs required to succeed. Elements such as rich product information, deep customer data, payment gateways and operations, fulfillment orchestration, and customer service are already pivotal to their current business model, and the contactless store (Amazon Go) is but an extension of these building blocks.
Behemoths like Walmart, with years of improvements and investments in their current systems and applications, are taking measured, surefooted steps in their journey towards providing a fully contactless experience. They have introduced multiple contactless options such as BOPIS and self-checkout. 7-Eleven takes it a bit further with mobile checkouts and encourages them with app-exclusive deals. In the cosmetic world, players like L’Oréal are taking greater leaps. L’Oréal’s hair color concierge tool uses AI for virtual try-on and enables customers to book virtual consultations. L’Oréal Skin Genius, an AI-powered skin analysis tool, helps design personalized skincare routines.
How to make contactless retail a true differentiator
Retailers need to go beyond the obvious use cases and explore ways to adopt contactless commerce across the value chain for true success.
Here’s how retailers can embrace contactless retail:
- Automate, automate, automate: Automation isn’t limited to mundane and repetitive tasks. Several processes in the omnichannel operations value chain can benefit immensely from robotic process automation (RPA) and digitization. For instance, onboarding a product manually can typically take several weeks. This can be reduced to a matter of days with digitization and RPA. AI can automatically generate tags from images (Figure 2) and auto-assign category hierarchies in seconds. For a contactless experience, it is imperative that retailers enable fast transactions through the entire experience—for customers, employees, and suppliers.
AI-powered image tagging for better product categorization and search
Embed intelligence into business processes: While automation and RPA can make a business agile, the surgical application of AI-ML can provide it scale, accuracy, and predictability. Neural networks and deep learning can transform the way businesses engage with customers, shareholders, and their partners. One of the many areas where the results are promising is in enriching product information using AI. For example, rather than just showing basic information, details such as accessories, related products, and engaging product content can be included on the ecommerce site to drive conversion.
Keep a close watch on the competition: Contactless commerce is all about execution and faster time to market than your competition. Therefore, it is vital that retailers keep a close watch on how their peers are driving innovation across assortments, pricing, promotion, and even specific SKUs. Several retailers are reacting to intraday price changes of competitors in near real-time to attract and retain customers.
A fast-growing Dutch international non-food discount retailer, operating a chain of 2,000 stores across 10 countries, optimized their multi-department pricing process with an automated, intelligent, and integrated process. Rather than making price changes based only on competition, they are now able to also make automatic price changes based on various other factors such as currency fluctuations, changes to cost price, and expiry of competitor promotions. Alignment of price changes with price policies such as floor pricing, spiral pricing, and minimum and maximum margins, is ensured through alerts when prices breach thresholds. With automated workflow approvals and pricing agility, the speed to market has reduced from five days to under 10 minutes, placing them in a strong position to take advantage of market dynamics.
Make data accessible, secure: Data holds immense value, is difficult to manage, and leads to security breaches and costly lawsuits if mishandled. Hence, it is crucial to ensure data is in the hands of the right people. Insights from data can drive efficiencies across the board. Similarly, innovation teams will need unfettered access to relevant data to drive experiments. While remaining accessible, data must be secured. All things considered, accurate data, made available to the right set of people and secure by design, is an entry criterion to enable a contactless experience.
Usher in a new era of touchless retail
Technology was long ready for contactless retail. Innovations such as RFID-enabled payments and phone wallets were just a precursor to a world that will operate without physical touchpoints.
Shoppers no longer mind if their order is shipped from a warehouse, delivered from a store, or they need to pick it up from a store. All that matters is the ability to seamlessly switch between channels while having a boat load of information available to them, without having to worry about social distancing or sanitation while visiting a store. They are increasingly attracted to self-service options in a store as well as online.
Technologies like AI, computer vision, natural language processing (NLP), robotics, AR and VR, and holography are maturing, and major advances are taking place to digitally recreate sensory experiences. For example, advances in digital olfaction are enabling the detection and transmission of aroma—of everything from perfumes to fresh food. Reports say that the market size of contactless solutions is expected to surpass $4.60 trillion by the end of 2027. There are immense opportunities to innovate and stitch together a new era of content-rich, touchless retail experiences and connect with shoppers on a one-to-one level.
