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Retailers Ramp Up In-Store Technology to Deliver on Digital Experiences

A consumer walks into a store and their phone lights up with the latest promotions. With the help of a robot, the consumer finds their item and goes to the fitting room, where smart mirrors provide personal styling recommendations, inventory information and can call a sales associate if needed. Once the consumer is done, they can self-checkout—without waiting in line or using a kiosk or talking to a person.

This is what the store of the future could look like, and today, retailers are elevating consumer experiences with in-store technology, like AI and interactive beacons. These devices are helping stores stay agile in a tough retail landscape, while providing consumers with an effortless purchasing journey.

Retailers, including Neiman Marcus and Rebecca Minkoff, have been leaders in the space and are helping brick-and-mortar shift to its new digital face.

What’s driving in-store technology

Technology has drastically reshaped retail in recent years and stores are struggling to keep up. The e-commerce boom has also meant consumers can instantly search, purchase and order items, without stepping foot in stores.

Consumers thrive on instant gratification and expect stores to provide a convenient and seamless experience as if shopping an e-tailer. Because of this shift in purchasing behavior, retailers are turning to in-store technology to stay competitive and entice consumers to shop at brick-and-mortar locations.

“There was a certain, panicky phase most retailers went through recently about finding a “silver bullet” in terms of technology that would really help their stores stay relevant and improve their business and brand perception, especially with younger consumers,” Lee Peterson, WD Partners EVP of brand, strategy and design, said. “The future of in-store technology will have to revolve around making the consumer’s life simpler without them even noticing, like shopping online does.”

Peterson dubbed this retail change as ‘digital retail integration,’ or DRI. Since consumers have become more advanced in technology than retailers themselves, these devices could be a boon for retailers in terms of cutting operational costs and heightening consumers’ store experiences. Although WD Partners’ research said consumers are likely to use high-tech features like buy online, pick up in store, in-store technology could be more beneficial off the sales floor with AI.

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An AI-powered store could provide real-time updates on product inventory, sync up with consumers’ smartphones to send promotional alerts and enable consumers to self-checkout when they are done shopping. Unlike other in-store technology, AI will allow retailers to integrate technology, without disrupting the shopping process.

[Read more on retail’s new digital environment: How Big Box Retailers Are Using IoT to Heighten In-Store Experiences]

Is in-store technology a boon or a bane?

Whether retailers are fully ready to embrace technology or not, consumers are keen to have it, and in-store technology could help bridge the gap between what consumers get online and what happens when they hit stores.

According to a recent SapientRazorfish report, evolving store fronts are driving nearly half of e-commerce sales. Sixty percent of consumers said they start their product search online, though they still prefer buying in stores. Nearly 70 percent of consumers have used their mobile device for retail activity, indicating that they expect a connected experience when they visit brick-and-mortar locations.

Retailers like Neiman Marcus and Rebecca Minkoff have equipped their stores with devices that to cater to consumers’ digital lifestyles.

Neiman Marcus is revamping the luxury shopping experience with its smart mirrors. Developed by technology company Memomi, the mirrors enable consumers to virtually try on apparel, accessories and makeup. Consumers can control the mirror with a few finger swipes to switch looks without trying anything on. If consumers like their product suggestions, they can save the video on their phones and post on social media platforms for feedback.

Rebecca Minkoff has also gotten tech savvy in stores with its interactive fitting rooms. The label tapped retail technology company Oak Labs to install the fitting rooms at its New York City flagship. With a few finger taps, consumers can view personal styling recommendations, switch the lighting, request a sales associate and purchase items on the spot.

“There’s been a great blend of connected online and offline experiences coming out over the past few years. Like any new technology, there is always a learning curve, but so many ‘wow’ moments are now able to be captured in person and shared with friends,” said Jill Dvorak, senior director of digital retail at National Retail Federation. “Shopping is inherently a social act, and these developments will help keep that.”

Despite the benefits, there are some drawbacks to in-store technology. Devices are prone to a myriad of issues, including malfunctions and complicated use. Industry experts say although in-store technology could help retailers, there is more work to be done on the capability of equipment like smart mirrors and robots.

“Shopper interactions with robots are still a novelty and not very frequent so far, even the inventory-taking robots are still in the test and learn phase,” said VSN Strategies principal and retail analyst James Tenser. “I’m not sure if retailers are ready to trust these systems with mission-critical tasks.”

Before installing technology in stores, retailers may have to consider the possibility of errors and consumers’ responsiveness to these devices. Investing in back-up systems and repairs could be a solution, in addition to testing these devices in stores for consumers to use.

What’s next for in-store technology

In-store technology may still be skimming the surface but experts say retailers will be snapping up more devices in the near future. Robots in particular will make more appearances as retailers continue to adapt to the digital ways of the world.

“I think we are seeing more robots enter the retail space as more stores experiment with this new technology. Although we can expect to see a few experimental stores using this technology this year, I think that true proliferation will not occur for a few years,” Five Elements Robotics CEO Wendy Roberts said. “These robots will greatly reduce the time that people spend in stores, but increase their overall purchase amount, since they can get their items, plus others, very quickly.”

Some retailers, including Target, have tested robots to track shelf inventory in stores. With the help of Tally, an autonomous robot developed by San Francisco-based startup Simbe Robotics, Target can have insight on where items are throughout the store, if they are missing or if they need replenishment. Although Target isn’t rolling out Tally in stores right now, piloting the robot could help the retailer understand what it needs tech-wise to improve its brick-and-mortar locations.

Even though robots could help consumers find items in aisles, provide styling suggestions and manage inventory, other devices are expected to improve stores on the back end.

“A lot of the technology changes will be behind the scenes and invisible to shoppers, but there will be indirect effects like better systems for forecasting, merchandising and replenishment,” Tenser said. “There will certainly be many more sensing devices deployed in stores, like beacons, interactive digital screens and even NFC enabled product labels that can interact with mobile phones.”

While the industry continues to experiment with in-store technology, retailers are pursuing a more digital path to boost sales and ramp up consumer foot traffic.

“If you stay the same in the retail business, that is the same thing as a slow death,” Tenser said. “If you try new innovative techniques, you will most likely be a survivor in the long run.”