The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Why Bringing Digital Into Stores Won’t Work And How To Prevent That Outcome

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Right before the Labor Day weekend, I caught this article on Ad Age, a motherhood and flying cars piece about how digital will magically transform the store experience, and even better, how digital agencies will be the leaders in making this transformation happen.

The first time I read it, I was angry. First of all, the piece could’ve been written in 2000, without any real substantial changes. We didn’t have the word “smartphone ” in our vocabulary back then, but we did have high hopes for mobile and NFC, and for the two of them together as well. Fast forward 15 years, and nothing has really changed. Not for stores.

Second, when stores are struggling, and for the most part they are, retailers don’t need to hear motherhood and apple pie and flying car stories about how wonderful and transformed the future of the store will be. Frankly, that talk is scary, because stores are expensive to change, expensive to maintain, and expensive to operate. When people talk about “tectonic changes ” in stores, all retailers hear is how much that is going to cost and how they don’t have the money – or the time – to make that happen.

And then, the hubris to suggest that agencies will be the ones to drive all this change? These are the companies that have excelled at designing one-off experiences that don’t scale, aren’t easy to change or evolve, and may drive “engagement ” (whatever that means), but do very little to drive the one thing that stores really need: sales.

Bottom line, pie in the sky statements about tectonic changes in stores don’t help the industry. And it’s not agencies that are going to effect these changes, but retailers – the people who understand stores and customers, and hopefully technology, and with that knowledge figure out how to keep the store relevant.

That said, about the only thing I agree on from this article is that big changes are coming to stores, and it is being driven by the way people shop and expect to shop in the future. But here’s the thing. Stores are notoriously difficult to change, and many retailers have painted themselves into a big corner when it comes to store employees. Tectonic change does need to come to retail, but the shaking needs to be felt in the halls of corporate headquarters, not in stores.

This isn’t the first time the industry has faced a sci-fi future of stores crammed with technology as the primary shopping interface, and it probably won’t be the last. All these efforts to put tech into stores keep failing for a few simple reasons:

Stores aren’t designed for technology

If retailers designed stores to incorporate technology as part of the design, there would be outlets in every 10-square-foot grid of a store. There would be Ethernet cabling through every section of wall and available through every ceiling panel. Shelving would be designed to be modular, and to carry power and connectivity. Sure, wifi can bridge some of that gap, if retailers would implement it, but as we’ve shown time and again in our store studies, retailers are reluctant to implement wifi for the benefit ofemployees – forget about customers. Why? The same old fears of security and cost.

In the Ad Age article, the author mentions his own company’s work at a store in Edmonton Mall, where the retailer implemented “interactive experiences across 470 digital screens “. Great. How much did that cost? How much work needed to be done in basic cabling to power those screens? How much bandwidth had to be added to the store to access the content needed to feed those interactive experiences? Now multiply that across a hundred stores. A thousand.

The numbers get ridiculous very fast – that’s called the store multiplier effect, and it’s a big barrier to implementing tech in stores. It’s not that the tech itself is so expensive – that seems to get cheaper every day. It’s the provisioning, and the zoning, and the permits, and the jackhammering that make that store multiplier number so scary. Not to mention the sales hit the store will take while all that jackhammering is going on.

Sure, retailers could get ahead of that curve by designing stores to take on much more power and carry much more bandwidth to devices that could ideally be placed literally anywhere in the store. That would be fantastic. But even though provisioning ahead of time is cheaper than having to go back and add it later, provisioning for every conceivable placement of technology, some of which may not even have been invented yet, just doesn’t seem like a realistic thing to ask of stores. Or store designers, most of whom may know consumer psychology, but know little to nothing about technology beyond CAD.

The store of the future will come, but no matter how impatient consumers may be for that experience, the existing store infrastructure – and by this I mean the physical as well as the technical – is a huge barrier, and not one to be blithely dismissed. New store builds won’t be enough to make this transformation happen. Can you imagine the nightmare it must be to provision anything in, say, Macy’s Herald Square, a historic building well over one hundred years old, and actually made up five buildings cobbled together over time?

And that’s just one challenge.

Technology changes too fast for stores to keep up

This may sound like whining, but when you have a large number of stores, it takes a long time to roll changes out through the whole chain. It falls prey to the same old engineering conundrum: of the three choices fast, good, and cheap, you may have any two, but not all three at once. Something’s gotta give.

For most retailers, it’s fast that gives. In my experience (retailers’ individual experiences may vary), retailers need technology, especially if it is an integrated part of the store experience, to last at least 5 years, and probably more like 10. I’ve known retailers who have three majorly different versions of their point of sale application in their chain of stores: the obsolete one they are trying to get rid of, the one they are in the process of rolling out to replace it, and the one that will eventually replace version 2, because it takes 5 years to roll out the change across all stores but it needs to be updated every 2-3 years.

Sure, technology advances change this equation. Cloud makes updates a heck of a lot easier than they used to be, when POS required a disk in a computer in a local store to make it happen. But while that may be true for software, it doesn’t hold true for hardware – that does require feet on the street and in the store, and no retailer I know of can afford to send out enough people to update every store with new hardware within a year, forget about anything more frequent than that.

But technology’s sweep of progress waits for no store. Those beautiful large format touch screens in the Edmonton Mall that look so high tech today will be obsoleted by 4k or 3D or holograms, for all I know – and all in the next 3 years. Overnight, those high tech screens will become albatrosses – not yet paid for or fully depreciated, and yet painfully, obviously, “old ” technology. And old it will remain, for the next 2-7 years until the retailer can afford to update them.

But these challenges are nothing compared to the last one.

Store employees are in-store tech’s weakest link

This is not their fault. Here’s what happens. Someone designs a whizbang experience to be delivered on the latest gadget. They roll it out to stores. The employees who happen to be working in stores get training on it. But the hardware isn’t really ergonomically designed for employee use, or it doesn’t fit quite right into the customer buying process, or the response time is slow. No one pays attention to employee feedback about how to make it better, or if they do, and someone really does listen, it goes on the 18-month backlog that the IT department has.

The tech gets stuck in a drawer or shifted into the back room. The employees who got trained on it quit, and no one bothered to train the new employees. Soon the tech is forgotten completely, until the store manager happens to clean out some storage and stumbles upon what is now a technology anachronism – because the technology has moved on and this piece of tech, whatever it was, is already obsolete.

That’s okay, you may be thinking. I will design an in-store tech experience that is customer-facing. We won’t need to train employees, because the UI will be so wonderful and intuitive that customers will just know how to use it, and they won’t need employees.

That’s great, but it still falls down if anything goes wrong. If the screen dies, or the response time is slow (no retailer can control all the bandwidth they need across all of the internet, and that goes double in malls), or a customer is not a digital native, then what happens? The customer turns to her most natural Level 1 help desk resource: the store employee (assuming she can find one). How does that conversation go?

Shopper: “This kiosk isn’t working. “

Employee: “Oh, I’m sorry. What are you trying to do? Maybe I can help? “

Which is probably the conversation that should’ve happened to begin with. Because, let’s face it, if a shopper can get what she needs from a screen, why does she need to go to your store for that screen? Why can’t she just sit at home and work it all out herself?

Stay Tuned: Preventing This Outcome

I’m already 1,600 words into an article that should theoretically be no more than 1,200. So I’m going to have to leave you hanging until next week on this very important topic. But I want to make it clear: I believe in a sci-fi future for stores. I do believe that stores have to fundamentally, “tectonically ” change, and that while stores will never die, if they don’t change, and fast, they could find themselves a highly endangered species. That’s not going to happen tomorrow, or maybe even 10 years from now. But I wouldn’t place any bets beyond that horizon.

The store has a role in an omni-channel world. It’s not the role it was originally designed for, at least exclusively. It’s not going to be staffed by the profile of employee that most retailers hire today. And it will have technology integrated as part of the experience – for both employees and customers. But please, people. Let’s be realistic about what it will take to get there.

Newsletter Articles September 15, 2015
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