The large format retail industry is at a turning point. After years of rapid expansion where local grocery stores were all but wiped out, the prospect of decline is now looming. One needn’t look very far to see headlines of “dead malls” or “retail bankruptcies” dominating our news-feeds, while simultaneously companies like Amazon or JD are seemingly growing at everyone else’s expense. While we strongly believe in the future of physical retail, the aforementioned situation of struggling operators isn’t exactly an exaggeration. At some point we must recognize that e commerce does in fact have its inherent advantages, and that bricks and mortar stores are also capable of exploiting these advantages in order to continue their long-held success. In today’s article, we’ll take a look at the various new technologies being adopted by global retailers, and what impact this investment into technology is having on their bottom lines. We’ll also take a look at what IMAGR has to offer in this battle for supremacy in the hyper-competitive world of retail.
Rightly or wrongly, when people think of Walmart and their technology, they probably think of the silly machines at the entrance which you can sell your cell phone to for $50. Needless to say, this is a superficial gimmick which will have absolutely no impact on Walmart’s business success. What will have an impact however, is the technology Walmart is beginning to implement behind the scenes, and it involves the use of artificial intelligence. Walmart is a massive company, and as such it has the resources to invest on multiple fronts without the expectation of success from any individual project. From our perspective, it is obvious that some of the technology they are introducing will have a noticeable impact on their business, while others not so much. In terms of AI, Walmart is attempting to leverage facial recognition technology to identify different levels of frustration on their customer’s faces. In theory this means store attendants can be dispatched to help those who are most “frustrated”.
Separately, the company (was) also in the process of introducing their own cashier-less shopping solution which relied on customers scanning their own items with an app. The interesting thing about this venture was its abandonment just four months into the roll-out. For us, this says a lot about convenience, technology, and retail.
It isn’t difficult to understand that aside from price, convenience and personalization are what ranks highest for retail customers. With that being said, it shouldn’t be overly difficult to see why Walmart suffered from “low participation” with its “Scan & Go” solution- just look at the picture below:
The “solution” essentially attempts to push the job of cashier onto the customer, which makes the shopping experience less convenient. The question becomes “why would a customer chose to use this solution if it’s clearly less convenient than waiting in line at the checkout?”
When it comes to implementing new technologies, convenience (for the customer) should always be the top consideration. Often this means the technology must take care of the heavy lifting and enable a more seamless experience than what is otherwise possible. Customer satisfaction is greatly improved when technology eliminates, not creates friction, which is why IMAGR created SMARTCART.
We’re not afraid to talk candidly about the failure of Walmart’s Scan & Go simply because our SMARTCART is an entirely different product. With SMARTCART, the shopping experience actually becomes significantly easier and more personalized, which (obviously) cannot be achieved with a modified version of a self-checkout. When technology works “well”, one doesn’t need to actively think about it- using SMARTCART is simple, intuitive, and seamless- there’s nothing you need to think about or do, it just works, and that’s the selling point.
Despite the failure of Scan & Go, we do believe Walmart is doing the right thing by taking these risks and trying out new technology. For a company of their size, a few such failures are by no means fatal, and just one success could yield billions of dollars in benefits for the business.
On a related note to Walmart, one of their subsidiaries, Sam’s Club, is also working on an improved shopping solution involving cashier-less payment. Sam’s Club is testing their own version of Scan & Go, although we suspect they may run into similar issues of the solution simply not being convenient enough or cost efficient enough from a business perspective. It is said that up to 700 cameras will need to be installed to ensure customers stay honest and actually scan each item they take.
IMAGR takes an infrastructure light, yet intuitive and convenient approach, where the customer is always the main focal point. By not requiring vast arrays of cameras and sensors we are able to keep costs down, while the technology ensures a seamless customer experience is achieved.
Many large retailers worldwide are exploring the possibility of cashier-less shopping. Amazon may generate the most headlines, but one mustn’t overlook the tremendous progress being made by companies in China, examples of which include the likes of JD and Amazon. Retailers in China have become early adopters of cashier-less technology, and the benefits are widespread. Higher customer satisfaction, higher spending, and increased brand loyalty are just some of the advantages of having convenient technology that is accessible and reliable.
Another trait shown by retailers in China is their willingness to explore (oftentimes bleeding- edge and uncertain) technology. This has proven to be quite a successful strategy, with many of the worlds leading retail innovations now starting to emerge out of China in addition to traditional tech hubs like Silicon Valley and New York. Of course, there can be significant risks- but here’s why you (as a retailer) need to take these risks; if you don’t, someone else will.
Still not convinced products like SMARTCART are the future of retail? That’s alright, we like skeptics- get in touch and we’ll blow you away with a demonstration!