New research from Capgemini Research Institute reveals that brick and mortar retailers have an enormous opportunity to leverage the distinct benefits of in-person shopping, as automation technology could help retailers find a competitive advantage for in-store retail and increase sales. However, in order to capitalize on this trend, retailers will need to prioritise automation that creates positive consumer experiences rather than as a cost saving exercise.
The report, “Smart Stores – Rebooting the retail store through in-store automation,” which surveyed over 5,000 consumers and 500 retail executives across North America, Europe and Asia, found that 59% of consumers who have previously visited stores with automation said they would be willing to shift their in-store purchases from a retailer without automation technologies to one that offers them, rising to 67% for 22-36 year-olds. Most consumers believe automation can help to solve problems including long checkout queues (66%), difficulty in locating products (60%), and products being out of stock (56%).
46% of customers who had a positive experience with in-store automation said they would be willing to shift some of their online purchases to stores that offer automation technology, with the number rising to 55% for urban consumers and 58% for millennials, as well as sharply increasing for shoppers in India (79%) and China (85%). On average, customers considering moving from online to in-store purchases would shift 20-25% of their purchases as a result of the improvements that automation could bring.
“Automation is an important part of how we respond to changing customer needs,” said Kristian Bjørseth, Head of Payments and IDs at Coop Norway. “Previously, our stores closed at 11pm and couldn’t serve people returning home late at night, often looking for something quick to eat. So, we introduced Coop Key, an app that allows consumers to enter an unstaffed store after hours, and self-serve entirely. We’re now seeing substantial revenues between 11pm and midnight, and improved numbers for high-margin products such as frozen pizzas. Security and age-verification are ensured by biometrics in the app that identify every individual customer.”
Retailers and their customers alike see the need to link automation to the sustainability agenda. Three quarters (75%) of retailers think automation can help them offer more sustainable and environmentally friendly solutions. Consumers surveyed said they would prefer to shop with retailers who use automation to reduce food waste (69%), reduce consumables such as printed receipts (63%), improve energy efficiency (58%), and provide sustainability information regarding products (52%).
However, as retailers scale up their use of automation, the report highlights that they need to be rigorous about understanding customer needs and concerns locally. While most consumers think automation has the potential to address their pain points in-store, there are both positive and negative nuances which the sector needs to accommodate in order to succeed. For example, 43% of consumers said they feel like an “unpaid sales assistant” when using a self-checkout, this number rose to 61% for respondents in India.
The research also found that retailers underestimate customer concerns and are often misaligned with their priorities. While overall 59% of customers said they would avoid a store if it was using facial recognition to identify them (specifically 53% in the UK, 60% in the US and the Netherlands, 66% in Germany and 67% India) just 23% of retailers thought this would be the case. These contrasts were most significant in France, where just 4% of retailers believed customers would avoid a store using facial recognition yet 62% of consumers said they would avoid these stores.
Tim Bridges, Global Head of Consumer Goods and Retail at Capgemini notes, “Automation provides a huge opportunity for retailers to gain back some of the ground they’ve lost to digital-native competitors and protect the market share they currently have through better efficiency, more convenience, and better sustainability. Making the right investment choice and acknowledging the need for a range of deployments across different functions could unlock significant potential across both operational and customer-facing department. Even in our technology-centric world it’s rare to find one investment opportunity with such wide-reaching potential.”
