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Retail consumers in China are at the cusp of something really amazing. The latest grocery concept store by Chinese Retail giant Alibaba is nothing short of exceptional and lays the foundation of future shopping experiences. As a consumer, I can order online and have it delivered to my home in 30 mins flat. When I walk in to the store, every aisle has an interactive digital kiosk which not only shows product information but also things like new arrivals, highest selling items etc. The prices of any product are on a dynamic digital display which changes based on demand and supply. And obviously, check out is automatic with thousands of cameras identifying the consumer, adding the product purchased on to the digital cart, and contactless payment via their mobile app. This is the future of retail where the digital and physical merge to provide the consumer with the most seamless shopping experience!

While online/e-commerce shopping is growing much faster than physical retail, it constitutes only 8.8% of global retail sales (Source). Online retail is typically a clinical, transactional experience which leaves the consumer asking for more especially if it Is a purchase of value, both financially and emotionally. Physical retail on the other hand has constraints like comparative locational disadvantage, smaller variety of SKUs and cumbersome transaction/checkout processes. Hence it doesn’t come as a surprise when we see more and more brands trying to bring both together and deliver the optimum experience to consumers.

Blurring Lines: Digital meets Physical

All the key stakeholders of the retail ecosystem (Brick & Mortar Brands, Digital Native Brands, Technology Firms) are aggressively exploring and adopting this format. This allows them to explore the best of both worlds while providing the sensory experience and ‘human touch’ that many consumers still look for. Let’s take a quick look at how this space is evolving.

Traditional Brick & Mortar Brands – Brick & Mortar stores have taken a slow and steady route to bring digital into their physical store experience. Take a legacy brand like Walmart which is fighting hard to keep pace with Amazon. Walmart identifies key bottlenecks in its physical experiences and then uses digital technology to eradicate them. For instance, lengthy checkout processes which are a bane for almost all retail stores have been addressed through the introduction of ‘Scan & Go’ technology which allows self-service checkouts at kiosks. Other constraints like limited aisle capacity are being addressed by the introduction of ‘Digital Aisles’ which serve as an infinite aisle from where shoppers can choose a product from the digital shelves, add to cart, and then pick it up from the check-out counter. They also have multiple other innovations like ‘Smart Tables’ for product demos, robots for scanning and stocking of shelves and many more such digital interventions which make shopping process quite a breeze.

Digitally Native Brands – Digital Brands are also aggressively exploring physical stores to address shoppers who love physical retail. We all know about the AmazonGo, the humanless, contactless store of Amazon which allows shoppers to pick up any grocery item of their choice and just walk out of the store without any interaction with humans. The items picked up are automatically identified by the hundreds of cameras in store, mapped to the consumer profile on the app and billed automatically to their account. With this innovation, Amazon has taken in-store digital innovation to the next level altogether.

Technology Vendors – Thanks to retail brands jumping into the Digital + Physical shopping world, it has led to mushrooming of many technology vendors providing state of the art experience for shoppers. Many large brands like Target, Walmart etc are incubating promising technology startups and trying them in their flagship stores before taking them to market. Technology Vendors are disrupting almost every stage of the retail shopping process from Awareness (Smart Pixels) to Consideration (Vera) to Engagement (Retaildeep) and finally Loyalty (Chatter Research). These advances in retail technology are providing brands with an unending choice of innovations to power their overall experience.

It’s all about evolution

As is evident from above, retail is going through a huge evolution and things are happening really fast. All key stakeholders are actively participating to understand consumer behaviour, shopping experiences, technological advancements and bringing them together to provide the ultimate ‘DigiCal’ experience for the discerning retail shoppers. Brands who have not done so need to jump in and ‘up their game’ immediately …or risk being extinct in the very near future!

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