Autonomous or digitalized? What’s the future of the store?
There’s now a wealth of evidence that today’s consumers are ready for retail’s digital future. The use of technology by consumers was massively accelerated and amplified by Covid-19. E-commerce has boomed; in-store too, shoppers increasingly use a gamut of devices and channels to engage with brands on their own terms.
The vison of the autonomous store
One of the ultimate examples of digitalization is the emergence of the autonomous store. It’s easy to understand the hype: the digital platforms needed to operate autonomous stores are mature. In the ‘store of the future’ today, shoppers can click to enter a fully automated environment, choose and pay for their product, exit and leave feedback – all without encountering a human being.
For shoppers, this autonomous experience is convenient and fast.
For retailers, the potential is huge: opportunities to expand their footprint into new permanent and popup venues come with a highly cost-effective and sustainable operating model. It’s fair to say, however, that autonomous stores are still in their infancy.
In their purest form, autonomous stores have been adopted and promoted by major retailers in the US and China. While a few have been sprung up in Europe, we’ve yet to see their major expansion.
For retailers, the potential is huge: opportunities to expand their footprint into new permanent and popup venues come with a highly cost-effective and sustainable operating model
In fact, companies such as Amazon, who pioneered the nano store, are arguably becoming more cautious. For one thing, autonomous stores still require outlay: premises must be maintained and a workforce of some kind is still required to operate them.
Clicks, bricks – and the human touch
But this is not just about cost. Companies across the retail sector recognize that having bricks, as well as clicks, is key. Consumers still want to see and touch some of what they buy; and as the pandemic has also shown, we humans value in-person interactions and socialization.
That’s why we’re seeing elements of the autonomous store being adopted and integrated – and this will only accelerate. Analysis shows, for instance, that the global self-checkout systems market size (valued in 2021 at USD 3.44 billion) is expected to grow between 2022 and 2030 at a compound annual growth rate of 13.3%. 1
There’s now a whole range of digital technologies that bring many of the benefits of autonomous store for retailers and their customers. However, these are part of a broader in-store experience and omnichannel strategy – a strategy that incorporates not only how retailers engage with consumers across all channels, but also how they optimize product availability and presentation.
Transformative digitalized store technologies
What’s changed (in addition to market dynamics and customer behaviors) is a combination of major technological advances. Developments in cloud and edge computing, and their convergence with 5G, are bringing these transformative digital technologies into mainstream.
Digital payment systems already support automated payment and stock leakage prevention solutions in store. Digital assistant apps and services will increasingly offer customers their own personalized recommendations, promotions, products and discounts. In the coming years, we’ll see the emergence of more immersive virtual and augmented reality experiences for consumers in-store and at home.
Connected technologies and real-time data
Connected inventory solutions, such as coolers and freezers, provide continuously stocked drinks or food ready for sale and replenishment. Computer vision technologies, which combine video with powerful AI capabilities, generate real-time, predictive and analytic intelligence for managing every single aspect of their operations both in real time and strategically, from queue management and customer footprint right through to lean stock optimization and the safety of staff.
We’ll see huge expansion of digital store technologies, with retailers moving from using data for real-time problem-solving, to prediction, and onto more sophisticated prescriptive abilities – to pre-empt and prevent issues before they happen.
Blending the physical and digital for success
While the extraordinary growth of e-commerce continues, the role of in-store experiences remains crucial. So although some may have heralded autonomous stores as a glimpse of the future, the reality of retail is likely to be a constantly changing blend of the physical and digital. This industry’s next chapter will be defined by a nuanced convergence of these two worlds.
Yes, it’s time to digitalize the store – but with hybrid solutions that can flex and adapt as this endlessly creative and dynamic industry evolves.