Every retailer wants to find out what consumers are up to in stores and online and the kinds of technologies they think make for a good shopping experience. In its “Future of Shopping: Connected, Virtual, Augmented” report, Periscope by McKinsey set out to gauge customer expectations of cross-channel experiences.
The report by Periscope, a platform that combines intellectual property, prescriptive analytics and cloud-based tools, uncovered that 64 percent of Americans want to use endless aisle functionality to browse a retailer’s full range of products while 60 percent think it’s valuable for discovering items similar to what they originally searched for. Another 58 percent would utilize the virtual shelf to make a purchase while away from a store setting. Though most reports on retail tech today focus on what millennials and Gen Z want to see from merchants, the Periscope by McKinsey report found that baby boomers in the 50- to 69-year-old age range are similarly interested in taking advantage of endless aisle offerings from retailers.
Even though they see the benefits of the endless aisle, 69 percent of U.S. consumers haven’t actually encountered a retailer that offers this technology, according to the report. This means merchants have a significant untapped opportunity to deliver an experience that could drive conversions regardless of whether consumers are inside a store.
The report noted that new ways to pay are catching on with younger consumers. Millennials and Gen Z, which the company describes as 18 to 39 years old, claim to use their smartphones and smartwatches to pay for purchases in store. Sixty-three percent of younger U.S. consumers said they’ve used their mobile phone to pay, while just more than one-third (37 percent) have completed a transaction using the device on their wrist. The youngest included in the survey were the most likely to have experimented with new retail formats. Asked about cashierless stores like Amazon Go, 49 percent of 18- to 39-year-olds said they’ve shopped in such a store and another 78 percent have used the “scan-pay-go” method, which “delivers all the benefits of the online checkout experience whilst shopping in a physical store,” the report noted.
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Across all age groups, 65 percent of Americans showed interest in using their smartphone for in-store payments. The scan-pay-go option appeals to another 60 percent, and more than half (54 percent) would see what the cashierless experience is all about.
People’s interest in retail technology seems to depend on the kind of product they’re purchasing. Consumers shopping for apparel cite delivery and pick-up options (51 percent) as the most important consideration. The remaining options didn’t register as strongly; 27 percent of apparel buyers want to be able to pay with smart devices, while even fewer (21 percent) see the value that augmented or virtual reality add to the fashion shopping experience. Another 18 percent believe the endless aisle enhances their shopping journey.
Even though they want technology to enhance the way they shop, “consumers are extremely concerned about how these innovations could further compromise their privacy or security,” the report said. This wariness is more than justified, given all of the security and data breaches that have plagued retailers in recent years. Top concerns for U.S. consumers ranged from handing over phone and email data (38 percent) to exposing payment card information online (37 percent). People also don’t like the idea of being tracked; 35 percent apiece said they didn’t want retailers to monitor in-store movements or detect their location.
Advanced technology can help retailers cater to a wider audience and encourage store visits, though merchants must be clear with consumers about how they’re using behavioral data, the report said.
“Retailers need to track the impact of new retail technologies on customer experience across different touch points, setting clear KPIs and leveraging their findings to attract new customers and build loyalty among existing ones,” the report added. “Integrating customer insights and analytics across all channels will ensure retailers can understand shopper behaviors across channels throughout the shopping journey.”