Let’s get real. Are you interested in integrating a new technology as a one-off for positive press or are you actually serious about incorporating the new technology into your long-term strategy? Did your company hop on “the store of the future” bandwagon? Are they about to?
Many retailers have been talking about “the store of the future” and what it could look like for them, and that is exactly what it has been for most retailers up to this point - all talk. Why is that? Why have so few retailers actually taken the leap into seriously designing and implementing the future iteration of their physical stores?
It all comes down to one simple fact; change is hard. Especially for large retailers. Moving from a legacy system to a new technology can be challenging, especially for retailers who have invested heavily in people, time, and other resources to make the legacy system work. But, a legacy system is termed “legacy” for a reason. It means a technology has come along that would ultimately be better for the retailer to use. Brick and mortar stores need to change in order to embrace new technologies and give customers a reason to be in a physical space to shop.
We will touch on a few things to consider when determining if the time is right to integrate a new technology, first. And then we will go into more on “the store of the future”.
Is the time right to integrate a new technology?
Level of Pain Using the Legacy System
How outdated is the legacy system? Do my employees cringe every time they have to use it?
Have my competitors moved from the legacy system to the new technology?
If you are one of the last companies in your space using the legacy system, it is safe to say it is probably time to make the change.
Can my company afford the new technology? Is it more expensive to not move to the new technology?
Recruiting and Retention
Is the legacy system a factor new hires consider when they are weighing their employment options? Will I lose employees to my competitors if I don’t switch to the new technology? Will I lose employees who integrated the legacy system because they will feel like the thing they worked so hard on is now gone? If I integrate the new system, will I be able to recruit a higher-caliber workforce?
Am I Doing it for the Right Reasons?
Do I want to integrate the new technology in order to gain press? Will the new technology help my company grow? Does the new technology fill a gap?
Does the new technology fit my company’s long-term strategy? Will it help us achieve our goals faster?
Ultimately, you will have to come to your own conclusions on whether or not the time is right to integrate the new technology based on the goals of your company, its culture, and other factors important to you. It is not something to take lightly.
The Store of the Future
What is it?
Robots, smart fitting rooms, facial recognition, no checkout counters; these are all technologies commonly placed in “the store of the future” bucket. Others include: voice-activated personal assistants, RFID, digital customer check-in, personalized products made while you wait, or discounts delivered via mobile app. Basically, “the store of the future” is a form of augmented retail - a blend of digital and physical, created in such a way as to communicate the brand and give customers a unique experience they can’t get anywhere else. Is it a physical store? Maybe. Maybe not. Is it a hologram that customers can view in their homes? Maybe. Maybe not. It will depend on what your brand stands for, what you are selling, and who your customer is.
How will retailers get there?
In order to cross the hurdle into this futuristic world, retailers will first need to lose the “transactional retail machine” mindset and move into a “brand experience” mindset. It will be a huge challenge because it will also mean that retailers will need to focus on long-term profitability vs short-term gains.
“The technology providers working with retailers to push the in-store experience into the future aren’t doing any great service to retailers who don’t consider their technology part of a scalable plan.” source
It can be tempting to completely ditch your innovation initiatives and focus on beating your competitors on price alone when you have a down quarter, but that strategy won’t be the winning strategy in the end because there is only so far you can slash prices. You must focus on the big picture, your long-term goals, and keep innovating! Your customers are demanding a better experience from you. If you don’t give it to them, they will go to your competitor. Simple as that.
"[T]hose who are using technology and data to create bespoke shopping experiences that recognize every person is different, and with different needs, are more likely to come out on top.” source
When is it going to happen?
“A single isolated team can’t successfully deploy a new store. To deploy technology at scale, you have to get the operational teams in the real stores involved. A lot of it is about culture. One board member might see an article and say, ‘Where is our magic mirror?’ Then there’s one magic mirror in one store with no chance of being profitable. Changing corporate cultures is a lot harder than buying a magic mirror.” source
Newer, tech-driven retailers are already implementing cutting-edge “store of the future” technologies in their physical stores (and even building brand new stores based on their “store of the future” concepts). How far will they and others go? How soon will older retailers roll out a space age store?
Legacyland is a reality for almost every retailer. The pace of innovation will continue to accelerate. However, the question to be answered is, who will end up driving this change; consumer demand or corporate innovation? Until then, carefully consider if the time is right to replace that legacy system with a new technology. Your "store of the future" just might depend on it.
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