How COVID-19 Will Advance Innovation In Retail Tech
In this Op-Ed Q&A, retail strategist Melissa Gonzalez provides answers to key questions about the ways retail tech will evolve across categories in response to the current crisis
As we navigate the new norm, we are seeing a forced acceleration of technology adoption. Millions are being reconditioned to accept new routines, follow new ways of interacting with others and shop online for everything, from apparel to food & alcohol and even pharmaceutical goods.
Increasingly, we are seeing brands and retailers implement contactless and mobile payments as the only way to transact, as the world avoids touch as much as possible. Curbside pick up has been rolled out across verticals ranging from arts and crafts to restaurants and grocery. The generational gap around adoption is shrinking, as we see Baby Boomers and Gen Z more closely align with prioritization of purchases and purchasing behaviors. Tik Tok, Twitch, Facebook Live and Instagram Live are seeing their heyday of content creation and consumption. Further, brands and retailers alike know that consumers will want experiences more than ever, and are accordingly turning to VR and AR to create that 3-dimensional layer.
We are still in the early innings of the adoption curve, but if 28 days is the amount of time it takes to form new habits, then retail will need to start planning for how to deliver on a new set of norms and expectations.
Q: What are some of the best opportunities for retailers to invest in right now when it comes to retail technology?
A: Technologies around payments are key right now, as the process needs to be as frictionless as possible. Contactless can range from QR codes and mobile payments to NFC and tap & go technologies. There will also be a rethinking around fulfillment, so investments to help optimize that will be key regardless of where the transaction is taking place. We have spoken about omnichannel for years, but it will now be a true expectation from consumers.
Q: What do you think are some of the biggest hurdles to retailers adopting these capabilities, and how can they overcome them?
A: Cost and implementation will still be hurdles and it will be a combined effort of tech providers, consultants and in-house teams working together to demystify it all. Historically, the tech ecosystem has been a bit disjointed, with reseller markets sitting in the middle, so we will need to see groups working more closely together.
Beyond cost and having the right IT support, there will need to be a concerted effort around training in-store sales teams so they fluidly understand the technology and how it intersects with the customer journey. Additionally, store design teams will need to think differently about the journey when mapping out layouts and key points where interactions will be more different than they were months ago—for example, the check-out experience, and optimizing for fulfillment for both online orders and in-store purchases.
Q: How do you think features like click-and-collect can best be implemented in categories like fashion & apparel, where experiencing the product is important?
A: Brands will likely need to find a balance. Some may revisit the subscription model (like a Trunk Club) where customers feel comfortable testing options. Some may also see technology partners such as Fit:Match as assets to helping customers get over the fit-gap in a more seamless way.
Q: Do you think that the consumer will trust services like online stylists or VR experiences?
A: Authenticity and expertise will be key when it comes to stylists delivering personalized recommendations and experiences. Brands cannot create buckets of personas. They will need to lean into getting to know their customers so the guidance is genuine and personally relevant. Stylists will need to lean into data and be able to continuously learn and iterate. VR will only be successful if it's high quality and truly contextualizing product in environments.
Q: When it comes to brick and mortar, how do you see commercial facades changing, especially to accommodate new interest in services like curbside pickup?
A: Store design as a whole will need to reconceptualize how brick-and-mortar stores serve multiple purposes for consumers. We already began to see it with the expansion of order-ahead and BOPIS, but it will quickly shift from a nice-to-have service to an expectation. Parking lots, sidewalk space at shopping centers and commercial facades will be thought about differently and in a more holistic way.
Q: What about the grocery space? How do you think consumer behavior will change with regard to hands-on elements like produce shopping in particular?
A: We could also see a rethink of the produce section as a whole. There will be a greater adoption of online ordering where there are designated produce handlers and a larger need for a footprint to support refrigeration in-store and back-of-house logistics. Our F&B design team and I envision a broader implementation of sneeze shields in produce departments as a “sensible” response to public health. Though perhaps more far out there, we might even see an area for robotics to be implemented so customers can select produce via a touchscreen.
Q: When it comes to hospitality spaces like restaurants, how do you think they will evolve, tech-wise?
A: This is another area where you will see less cash exchange hands, and more adoption of mobile payments much they way you have seen in European countries for years. Our F&B design team and I also see this forcing more retailers to offer delivery and pick-up as an integrated service, if they haven’t before, building off the learnings of having to implement these options in a makeshift way during COVID-19.
Q: What would you recommend for companies building customized facial recognition solutions for retailers?
A: While the same challenges will need to be addressed, such as privacy and frictionless implementation, personalization will be even more important, as consumers will expect brands to know who they are, predict their needs and be able to fulfill their orders as efficiently as possible.
Q: Overall, what types of tech do you think we will see take off most, and in which industries?
A: I think we will see point of sale and contactless payments across industries, delivery services like Postmates and InstaCart, and SaaS platforms that can help optimize order and fulfillment management.
As we come back from the lockdown, both consumers and companies alike will have a new reality of operation. Both sides will have hands-on experience as to how technology can solve problems and at varying levels, it will be an expected part of a customer’s journey, across generations and demographics.
These questions originated from audience members who attended Melissa Gonzalez’s talk, “How COVID-19 Will advance Innovation in Retail Technology,” during World Retail Innovation Week. Melissa is an agile retail strategist and pioneer in bringing the pop-up retail format to the mainstream. She is the founder and CEO of The Lionesque Group, a firm of award winning retail strategists and pop up architects™ as well as a Principal and Shareholder in MG2, a global architecture firm.