Retail Store Technology: What Do Customers Want?

Basics are more in demand than bells and whistles.

June 27, 2019

ALEXANDRIA, Va.—Aldo, the Canadian footwear and accessory chain, added touch-screen tablets to its stores 10-plus years ago to let customers scan and request styles from the stockroom themselves, reports The company expected the technology to replace much of the customer-sale associate interaction, but instead, the tools got more use from the sales associates themselves.

“This was a common insight,” said Jennifer Maks, senior vice president of omnichannel, Aldo. “Many of the features that we built as ‘self-serve options’ for consumers actually ended up serving our associates in a powerful way; for example, by giving associates the ability to request try-ons through their mobile device, they were able to spend more time on the floor with our shoppers instead of running to the back to see if the product was in-stock.”

The company also found that as smartphones became more ubiquitous, shoppers preferred using their own device instead of standing at a fixed kiosk. Aldo has used the learnings from its large-screen devices to retrofit its mobile apps, both consumer-facing and internal, with the same capabilities. Last year, Aldo gave customers the ability to request try-ons through the Aldo app, a feature that Maks said has become popular.

Retailers today face a conundrum when it comes technology investments: If they don’t do enough, they risk falling behind competitors, but if they go overboard at the expense of mandatory investments, such as staff training or better products, they could waste money and lose customers.

Several studies have found a disconnect between what customers want and what retailers think they want. According to Oracle NetSuite, a cloud computing company, 79% of retail executives believe that integrating artificial intelligence and virtual reality in stores would boost sales, but only 14% of shoppers said these technologies would have a significant impact on their purchasing decisions. And while almost all executives believe AI and VR would increase foot traffic, 48% of shoppers said these technologies do not impact their decision to visit a store.

Part of that divide could be a question of how seamlessly these tools are integrated. H&M stores, the Swedish-based retailer with outlets in 62 countries, uses its accumulated data to analyze consumer shopping behavior, reduce excess inventory and avoid discounting. Everything happens behind the scenes.

“At the point that the customer is seeing the technology and is conscious of it, it feels to me like you’ve failed,” said Kevin Flynn, director of retail strategy at ThoughtWorks, a technology consultancy. “Ultimately, customers want shopping experiences that are inspirational and enable them to get the things they want. They want it to be as frictionless as possible. If they’re seeing the technology and they’re conscious of it, it’s probably just getting in the way.”

This was evident recently at Target when shoppers faced a nationwide cash register outage that lasted two hours on a Saturday, and others found themselves unable to use credit cards for 90 minutes the following day due to a data-processing issue.

Those POS problems may have cost Target between $50 and $100 million, according to various estimates, though the chain reportedly salvaged some sales through its buy-online-pickup-in-store (BOPIS) program, which shoppers could still use to make their purchases.

As omnichannel features such as BOPIS and ship-from-store become more popular with consumers, inventory management is one type of technology that will become increasingly essential, said Bob Amster, principal and co-founder of Retail Technology Group.

For example, Lululemon, the athletic apparel retailer, introduced a radio frequency identification (RFID) system in 2015, and by the following year it had 98% inventory accuracy, compared with about 65% for the average retailer, according to Auburn University’s RFID Lab.

“The return [on RFID] is almost absolute accuracy,” said Amster. “Imagine being able to take an absolutely correct, accurate inventory at the end of every day, in every back room of 200 or 300 shoe stores.”

This technology can enable automatic replenishment when stock gets low on items, show online customers what’s available in stores and like mobile technology, allow associates to spend more time on the floor with shoppers.

The true test of the effectiveness of retail technology is whether consumers continue to use it again and again, and for many retailers, that comes down to mobile.

“We have tried several interactive shopping tools over the years, including kiosks, interactive product knowledge and customer-facing tablets,” said Brian Seewald, SVP of customer experience and operations for DSW, the shoe retailer. “None of them were as successful as we would have liked. We determined that our customer prefers to shop on their own device and that our focus needed to be on the customer mobile experience.”

DSW’s app is a valuable complement to the chain’s VIP loyalty program, said Seewald. The 26 million members of the program generate 90% of the company’s sales. Customers receive loyalty points for downloading the app and can use it to keep track of rewards and scan barcodes in-store for reviews and availability. Still, there’s pressure to get ahead of whatever comes next.

“Customer expectations evolve so quickly now that all of us must push ourselves to go faster,” said Seewald.

“Now when we contemplate new[technology] ideas, we focus less on the format and tool,” said Maks of Aldo. “We ask ourselves, ‘What is the purpose of this application, what do we want to achieve and why would the consumer care?’ This ensures that we set off on the right path, and it serves as a guiding beacon along the way, particularly as we iterate and evolve through testing.”

For more on how technology and innovation are shaping the retail landscape, see “Revolutionizing Retail” in the August 2018 issue of NACS Magazine and “What’s Minding the Store” in the October 2018 of NACS Magazine.