Stores Dig Deeper Into Tech To Cultivate Consumers

NEW YORK— Omnichannel technology, as applied to brick-and-mortar retail, has been envisioned as automated presentations and online interfaces whether presented as kiosks or tablet-bearing employees, but that’s just the first expression where engagement rather than interaction or transaction will be key.

In a sector where consumers consistently confront new shopping ways and means, retailers need to use whatever means they have at their disposal to engage consumers in an attractive interplay that makes them want to return despite the myriad other options available to them, options that are figuratively and sometimes literally screaming for attention.

As they envision application of voice commerce, machine learning, artificial intelligence and cloud computing continued from page 1 online, retailers also are enhancing technology to improve the brick-and-mortar customer experience by integrating it with digital commerce and other electronic applications that increasingly govern operations.

The future holds terrific possibilities, as companies such as Shopin, which takes new approaches to consumer data as a driver of personalized shopping, and Symphony RetailAI, which is using its CINDE interface to allow retailers to tap complex real-time artificial intelligence-driven data in an easy, even conversational manner.

Still, tomorrow’s electronically enabled marvels will build on how retailers implement technology today as they interweave physical and virtual operations in ways that provide consumers with more satisfying engagements. Retailers who fall behind will find consumers turning away from them and to competitors who deliver experiences that satisfy them.

Lamps Plus Connects To Consumers

Lamps Plus, for one, has spent the last couple of years integrating its store and online operations, giving consumers who are furnishing their homes more shopping options across the range of its lighting and furniture assortment.

Yet, as often is the case when it comes to the successful implementation of in-store technology, the employee plays a critical role. The retailer has trained employees in customer engagement such that they can approach customers and coax them into expanding their shopping considerations beyond the physical store and, through guided electronic device interactions, engage with the vast product assortment available to them online. Kiosk links often sit unused on retail sales floors, but Lamps Plus has been able to successfully bridge the gap between the company’s digital and physical retail operations.

Earlier this year, Lamps Plus began to explore one of the new horizons of technically enabled commerce: texting. The company instituted a text link for consumers who want to send questions to any of its 37 Lamps Plus stores. The store manager or assistant store manager at each of those locations carries a company iPhone during store hours that is specifically dedicated to answering customer texts, demonstrating that mobile devices have any number of retail applications.

Angela Hsu, Lamps Plus svp/marketing and e-commerce for Lamps Plus, said that the retailer is dedicated to using technology to link, improve and expand upon its operations online and in the physical store, where manager smartphones perform more duties than one.

“Our brick-and-mortar stores are continually looking to leverage technology to improve and evolve,” she said. “Last year, our stores implemented a new customer survey model. Customers are invited to provide feedback to us online through short links on their receipts and via email for orders from our kiosks. We took it one step further though and provided feedback to the stores in real time. Every store manager has an iPhone at all times and is immediately notified when a customer leaves a poor review. They are trained to immediately contact the customer and try to resolve their concerns. Similarly, they also get notified for five-star reviews. Those customers are also contacted and thanked for their order and feedback.”

Lamps Plus uses employees to take technology and turn it into advanced customer engagement.

“We provide associates with pathways to provide feedback on what customers are requesting and asking,” Hsu said. “Listening to customers is absolutely crucial to adjust and personalize our business so we’re delivering the best information to customers: product choices, insight, answers to concerns, etc. We regularly make changes both in our stores and online to address questions and customer needs that come up in online questions and in customer conversations in our stores.”

As such, Lamps Plus sees technology as an open opportunity that allows multifaceted innovation.

“Every store now has an SMS/text number in which they can answer questions and help customers with sales. From our website, customers can text questions about products to their local stores and receive answers immediately from store associates. Our associates will often take pictures or video of product floor models in order to answer customer questions. In a sense, the associate becomes a virtual shopper, helping the customer through the process. We have been overwhelmed by the popularity of the program. As a result we are now scaling with more phones and more options for customers to contact us,” Hsu said.

Although its online operation reaches more consumers than its limited store base, Lamps Plus has long recognized something pure play retailers have come to appreciate only over the past few years, that the store environment has unique attributes that provide a means of engaging consumers. No matter the product, the in-store engagement is immediate and immersive.

“Stores will always have a unique advantage over the web,” Hsu said. “Customers have the benefit of actually being able to see the product, to see how it looks in all dimensions for size and color, and how it lights a space and sets the mood for the surrounding space. That’s really hard to capture online. At the same time, online provides stores the benefit of having an extended aisle. All of our stores have had kiosks in them for over a decade and an increasing number of store sales are coming from kiosks. A customer will come in, view a lamp in one color, but request it in a different color. We can easily accommodate through our web-based kiosk.”

As retailing evolves, technology, when properly applied, can usher in new dimensions to the store shopping experience. It also ushers in new expectations.

“Customers love technology when it makes shopping easier,” Hsu said. “Many of our tests have resulted in large benefits for our stores. What we have learned is that we need to try to evolve and change our stores. Technology provides a lot of benefits, but it has trained our customers to continually expect improvements and enhancements in how we interact with them in our stores.”

Home Depot’s Online Front Door

In January, as part of the National Retail Federation Big Show, Daniel Grider, vp/information technology at The Home Depot, said that the company is working to understand when customers want to shop and how, as it examines ways to ensure the customer is leading its innovation efforts.

“How do we embrace that and just really be there for them and reduce the friction?” said Grider. “We announced last year that we were going to invest $11 billion over three years, just really going after the customer experience, and how we reinvent that. So we’re a year in, and it’s going great. If you think about from the store perspective, 47% of our shoppers online actually come into the store to pick up what they ordered. So almost half of all online experiences actually end up in the store, and the 20% of those actually then have another transaction once they get in the store. Online is the new front door for our stores.”

He pointed out that 90% of the U.S. population lived within 10 miles of a Home Depot, “so we’ve got to leverage those 2,200 stores and how we bridge that experience.”

In addressing innovation, Home Depot looks across the operation to maximize investments.

“When we talk about innovation, we look at it as the trifecta of innovation that starts in the engine room,” Grider said. “That’s all the back end, whether it be servers, data center, then around the innovation of development, how we look at how we develop. We don’t develop software like we did five to 10 years ago. It’s more iterative now. It is more about listening to our associates about what’s working with the technology we are deploying, how we learn from it and deploy it even faster. The last piece of the trifecta is really the in-store experience. We want you to come in and have a very genuine experience, so over half of that $11 billion investment is actually to our stores, to the brick-and-mortar piece.”

Grider said that putting technology into stores is a complex process that is ongoing at Home Depot. The employee is a critical challenge for technology deployment, particularly for the Home Depot with 400,000 employees, many of them part timers. Home Depot is trying to “collapse” technology so that employees don’t have to learn separate processes to accomplish essentially the same task.

Home Depot, he said, has 11 different selling systems, but now has Order Up, a simplified method of placing orders. The company recognizes that in-store engagement ultimately rests with employees, who have to be reassured that technology will better their work experience. Reluctant employees won’t embrace technological innovations that don’t benefit them and may even figure out ways to work around unwelcomed tech as they perform their daily tasks. Order Up makes selling easier for the employee.

“The beauty of it is, it allows our associates to connect with customers rather than worry about the systems behind the sale to the customer,” Grider said. “So, now, they’re eye to eye talking about the projects and selling the product and not worried about how do I key this into this complicated system to make the order.”

Walmart Making Strides

Walmart has been applying and updating technology to support its several high-profile customer engagement initiatives. Increasingly sophisticated analytics are an important backdrop to everything the retailer does, allowing merchants and executives to consider options and tradeoffs as they approach consumer engagement.

At the same time, Walmart has been expanding its capacities by bringing expertise and systems in house, as in the Jet.com and other e-tailer acquisitions that have laid the groundwork for new initiatives such as the launch of Jetblack, which is built as a text-based retailing operation. A product of Walmart corporate incubator Store No. 8 and led by Jenny Fleiss, a former Rent the Runway executive who came on board the tech hot house and became Jetblack co-founder and CEO.

One of Walmart’s initiatives to engage the elusive Millennial consumer, Jetblack’s focus is on time-strapped urban customers, especially parents. In its mission, Jetblack employs a combination of AI and expertise from professional buyers to match shoppers with products that satisfy their specific preferences from across a vast product vista. The focus is on lifestyle needs as relates to home, health, parenting, fashion and wellness but Jetblack also addresses the requirements of occasions such as birthdays, helping shoppers select appropriate gifts.

And Jetblack isn’t anything like the end of it. Walmart is making further technologically enabled strides through its partnership with JD.com in Asia.

In a presentation at the NRF show, Harlan Bratcher, global business development head, JD Fashion, noted that Asia is ahead of the U.S. in many retail technologies because it never had a cable system. As the country’s economy and middle class grew over the past generation, China’s retail technology developed based on WiFi and mobile technologies, as smartphones became the first and foremost connected devices in use. China jumped into 21st century retail technology as the U.S. and Europe were gradually converting from earlier tech. Much of China already functions as a cashless society, Bratcher said.

JD has some 7,000 delivery centers all over the country and is employing autonomous delivery vehicles that can get goods to customers without human intervention. Consumers come out to pick up shipments directly from the delivery vehicles. The logistics support JD’s same or next day delivery to 99% of the Chinese population.

“The notion of what they want, where and when they want it, that’s the new market,” Bratcher said. “That’s how you’re going to tie all the technology together, using autonomous vehicles, using mobile platforms, using AI, cloud. All this has to come together in a seamless way. That’s how you’re getting the customer, you’re getting the opportunity: what, when and where.”

The JD tech focus doesn’t end online. The company, which began as a brick-and-mortar retailer, now operates a seven-store JD Fresh physical store chain in China.

“It’s completely autonomous,” he said. “No clerks. You walk in, you face the scans. After that, you shop around. There are magic mirrors. You pick up an apple. The mirror behind the display lights up with a map of the world, and it points to where the apple came from, when it came from there, and the sugar level and the price. You take the apple and you put it into the autonomous cart that follows you through the market.”

Despite the attraction of digital retail, Bratcher said consumers still prefer to do much of their shopping in stores.

“Physical retail is not going away,” he said. “We call like to call it online off line. In China, we developed this massive e-commerce business. Now, we’re going the opposite way. We’re opening many physical stores, and using all the technologies that we developed along the way to enhance that.”

JD Fresh operates with technology that’s advanced in U.S. terms, even in the case of AmazonGo, which only offers a basic checkout-free shopping experience. However, Bratcher said, JD doesn’t want to be a disruptor, or at least not exactly.

“We want to share,” he said. “We’re sharing all our technology as a service. We’re calling it retail as a service, and that’s the future. We’re quite good at logistics and AI and drone technology. Those are things the company is actively sharing with others. We have so many brand partners already and retail partners. They’re actively working with us on using these technologies.”

Walmart became a JD partner in 2016 when it sold its online commerce marketplace Yihaodian to the Chinese retailer. Walmart retained its direct sales business but elected to operate with now JD-owned Yihaodian, while at the same time working closer with JD on delivery. At the time, Walmart acquired a 5% stake in JD.com.

In the company’s February fourth quarter financial presentation last year, Walmart CEO Doug McMillion made a point of mentioning that, in China, the company expanded its partnership with JD.com and could offer grocery delivery in less than one hour from 160 of its stores through the JD Daojia platform. In the year-later fourth quarter, that total was 280 stores. A quarter earlier the company asserted that it had signed up 10 million users for its Scan & Go app that runs using the Tencent WeChat platform. Clearly, Walmart is learning a lot in China.

Not every technology will translate from one market to another. For example, facial recognition technology, used in JD Fresh and generally accepted in China, might find barriers in the U.S. That being said, recent history suggests that consumers will continue to adopt new technology even if they initially resist.

Omnichannel & Beyond

As technology surges forward, new systems are coming online that have the capability of taking omnichannel retail, in both its physical and e-commerce dimensions, beyond the present horizons.

Everseen, for instance, is a company that currently is using its Process Shaping technology, which marries AI and visual scanning, to detect fraud at self checkouts, but the company can apply it to help retailers monitor anything from truck docking to instances when consumers pick up then put back on shelves, analogous to cart abandonment online.

Zebra Technologies has worked to simplify retailer logistics and enhance the movement of goods through stores while making it easier for personnel to deal with inventory issues and engage consumers on sales floors, which includes supporting off-pricers who are not necessarily deeply committed to e-commerce. Zebra also demonstrates that low-tech can bolster hi-tech as in the shopping cart mount for its PS 20 Personal Shopper that allows hands-free in-aisle sweep scanning of barcodes, making checkout-free shopping more practical.

Through its CINDE application, Symphony RetailAI can, with the application of artificial intelligence, constitute various data to provide decision makers information that will help them execute initiatives while ensuring operations are aligned in support.

“This technology gives the decision maker more understanding about what is driving consumer behavior and what will motivate different behaviors given conditions and circumstances than ever before,” said Kevin Sterneckert, Symphony RetailAI chief marketing officer, who added that the company can work with systems throughout the retail process to make things work more effectively.

“There’s another whole stream of data and information in the Internet of Things that can include sensors that sense movement of product, where customers are standing, how long they are standing, what they are buying, the path and pattern, even what faces the customers are making, whether happy or frustrated, along with their transactions to potentially provide more insight than is available from online shopping, and this is very viable,” he added. “This is a changing part of the equation for consumer intelligence, in analyzing how the consumer wants to interact in the environment and how the consumer wants to mix in-store and online.”

On the flip side, Shopin is compiling shopper data based on linking what consumers buy in conjunction of other purposes. However, the company is moving toward a system using AI and blockchain technology that will allow consumers to lock in their purchasing behavior and share it with retailers on whatever basis they like, whether a transactional or in a more comprehensive manner. In doing so, they will provide retailers with a cross banner and cross channel view of what consumers are doing so that they can provide specifically personal offers to them whether online or in store.

“We’re creating tools for a new retail economy with AI and blockchain and entirely consumer-centric viewpoint,” said Eran Eyal, CEO, founder, Shopin, with the result that retailers can see the consumer in a more three-dimensional way whether or not they have the data acquisition abilities of an Amazon, Walmart, Alibaba or JD. In fact, he said, new technology of the kind he is developing can provide a more complete picture of a consumer and the better grounds for engagement than even retail giants have today.

Editor’s Note: This story is the second of an occasional series on omnichannel retailing. The first Year of the Store story appeared in the March 1, 2019, issue.