How Mobile Disrupts Retail
Nearly 50% of 25 to 34 year olds use their phone to shop online while standing in a line at the store (Google Consumer Survey Nov 2014). There obviously is a missed opportunity for engaging with customers and create a better shopping experience. Online and Mobile shopping have gone through a decade of innovation, in the traditional retail chains, hiring a Head of Digital to manage the Online Sales Channel has often been the most popular response to the digital opportunity and a huge gap has grown between these 2 worlds. Digital should be seen as an envelope that wraps around the complete shopping experience and Digital Transformation in Retail is a change process involving supply chain as well as decision making processes.
We use mobile devices to find stores, compare prices, read reviews, look at product demonstrations and process payment. However, when we enter a POS with that same device in our hands, retailers fail to connect with that technology to enhance the shopping experience.
Apple Leading the Way
Not surprisingly, the shopping experience at the Apple Store, is leading the pack in terms of mobile centric innovation. Not only are the shops designed as a centers of brand experience, Apple is also experimenting with connecting the in-store shopping experience with the mobile phone. By opening the Apple Store App and connecting to the WLAN, users are being recognized as being in the store and all the intelligence gathered in the online version of the app store about devices and preferences can be used to enhance the shopping experience. Obviously payment is part of that as well: the app allows scanning and checking out selected products using EasyPay as no one really benefits from standing in line to pay for products as much as it ties the POS employees behind a cash register instead of being product / brand ambassadors for the customer.
New Technologies entering the POS
Once Retailers embrace "mobile" to enhance user / brand experience at the POS, a world of possibilities opens by using new technologies such as beacons, wearables, augmented reality (e.g. Google Project Tango 3D) and on the other hand the options that real.time Big Data Analysis offers in becoming part of the shopping experience. Companies like SWARM (now Groupon) and Collectanalyse foot traffic and spending habits giving retailers new possibilities in tailoring customer interactions at the POS.
In order to safeguard data privacy and protect customer information, close detail needs to be given to Security. A data breach like the one at Target in 2014, which lasted only three weeks but exposed 40 million credit cards, seriously damages the customer confidence. Security concepts for handling customer data need to be bullet proof.
"Product on Demand" and the Retailer Value Chain
Print on Demand and 3D printing are slowly becoming mainstream enabling us to create products that were unthinkable before. The emergence of Personalized Toys (Dolls - mymakie.com) and Personalised Children's Books (lostmy.name) challenge the fundamental idea of what a POS is by selling products that are not on shelf and that are the result of a creative process that takes place at the POS.
This transformation of the POS towards "experience center" drives value chain transformation within retailers as personalization, speed and convenience is increasingly gaining in importance vs the old paradigm of product availability and location. This will pave the way for more robust order fulfillment practices (such as same-day delivery and click-and-collect), on-the-go retail (including pop-ups and food trucks), self-service centers (such as Amazon Lockers), and other non-traditional strategies.
A good example of a retail chain that is innovative in the digital transformation of its value chain is Walgreens with the introduction of its first open API,Quickprints. QuickPrints enables mobile app developers to include the ability for their users to print photos from their mobile devices to any of the more than 8,200 Walgreens locations. In 2013, after successfully opening up the QuickPrints API to third-party developers, Walgreens launched its Prescription API with the goal of giving third-party consumer healthcare apps the ability for their users to initiate a prescription refill or transfer to a Walgreens store.
Making "Digital" part of corporate DNA
Retailers are traditionally slow at embracing change and have the tendency to try to perpetuate the success of their running business model. With the growing market share of online retail (15% in UK, 8,4% European average for 2015), retailers have a compelling event to act.
Some retailers such as John Lewis are trying to bring new technologies into their stores by opening up towards the start-up community through their incubator activities (JLab), partnering with about 10 companies each year giving them access to John Lewis. Others such as Walgreens are opening API's that allow the creation of an ecosystem of innovation. All these initiatives are symptoms of a change process that is essentially all about putting the shopping experience at the center of the corporate strategy and requires a complete new set of "guiding principles" and a corporate infrastructure supporting employees delivering a unique shopping experience to customers.
Technology, and especially mobile technologies are the catalyst of change in POS retail as digital natives, growing up in a technology rich world, are expecting an integrated shopping experience. Retailers should embrace this challenge and reinvent the customer shopping experience reaching far beyond formulating an omnichannel retail strategy.
