Five Ways New Technologies Are Changing Stores -- and Shopping
At last year's annual WWD Apparel & Retail CEO Summit, the talk was all about recession and inventory control. But at this year's gathering in New York, the assembled execs buzzed about technology. Now that retailers seem to be moving out of crisis mode, they're back to investing in new bells and whistles for their stores and websites.
Merchants are dabbling in all kinds of in-store technology, from apps that send coupons to your cell phone when you walk in the door to digital cameras by fitting rooms that let you send a snapshot of that little number you just tried on to all your Facebook friends.
The expansion of smartphones will affect the way people shop, points out John Donahoe, CEO of eBay (EBAY). Applications such as RedLaser that let smartphones scan a product bar code on the store shelf and comparison-shop for that product online are "blurring the lines between in-store and online," he says.
Retailers are using technology to take the store to wherever the customer is and to create excitement inside bricks-and-mortar shops, says Piers Fawkes, founder of trend research company PSFK. For example, he notes that Walt Disney's (DIS) new Disney Store design -- seen in New York's just-opened Times Square store -- uses technology for interactive displays to tell stories that draw young shoppers in.
Here's a look at five new technology-based shopping enhancements coming to a store near you -- or already there:
Self checkout -- anywhere: DIY cashiers aren't new. In fact, they've been around long enough to be the subject of an academic study. But new technologies are making scanners more accurate and portable, so they're not tied to a cash register anymore. Some Stop & Shop supermarkets have hand-held scanners that let shoppers scan and bag items as they go through the aisles.
New technology could take that even further: Some companies are experimenting with cash registers that read radio frequency identification tags. The RFID tags send out a signal that rings up the purchase without scanning, or even taking the purchase out of the cart. But RFID tags are relatively expensive to produce, so stores have been slow to embrace the technology.
Facebook in the fitting room: "In the offline world, shopping is a social phenomenon," Donahoe told the WWD Summit. Retailers have gone all-out Tweeting and making friends on Facebook, but experts are now pushing them to take that to the next level: by marrying social media to the store. Fawkes notes that the jeans maker Diesel placed Dieselcam digital-camera kiosks outside dressing rooms at its stores in Spain to let shoppers snap pictures of the outfits they're trying on and post them on Facebook so their friends could comment.
Retailers need to encourage smartphone use in their stores, and perhaps offer free WiFi, says Fawkes. He admits that could be a difficult leap of faith for merchants, who traditionally don't like people taking pictures in the store and tipping off rivals about their merchandising.
Online shopping in-store: It used to be if you couldn't find that sweater in the size or color you wanted, the salesperson would call another store and find it for you. Now, a few keystrokes at the register and the salesperson can order it for you online -- or you can do it yourself before you leave the store.
Saks (SKS) has enabled all its cash registers to place orders on Saks.com. The system pays the sales associate a commission on that sale, as an incentive to place the order, says Denise Incandela, president of Saks Direct. She notes that the department store has found consumers who shop both online and in-store spend more with Saks on average than those who shop only one of those channels.
Other department stores are taking the same concept and making it DIY: J.C. Penney (JCP) has been expanding its Findmore kiosk test, in which it placed terminals in stores that let customers order items from JCP.com. Rival Kohl's (KSS) is rolling out a similar touch-screen terminal at all its stores this fall.
DIY scanning: Yes, stores such as Target (TGT) and Macy's (M) have placed scanners on their aisles so you can find out the prices on items. But some tech companies are taking it one step beyond, and letting shoppers scan bar codes with their smartphones, so they can get more information about the product or shop around for a better offer. Fawkes mentions several apps for the iPhone and other smart handsets, including RedLaser,StripeyLines and ShopSavvy. Most of these will scan a regular bar code and display product reviews online, and provide comparison prices at other bricks-and-mortar stores and online retailers.
And tech companies are already at work on the next-generation: Quick Response (QR) codes. Many retailers, such as Best Buy (BBY), Gap (GPS) and Dick's Sporting Goods (DKS) are already using the "2-D bar codes" that encode more information and can unlock special online videos and websites on your smartphone.
GPS coupons: Apps such as Foursquare and Shopkick let shoppers "check in" when they arrive at a location, post messages with handy tips and collect points and rewards -- or just bragging rights as "mayor" of their local Starbucks (if you show up there more than anyone else). Many stores have now adapted those apps to send shoppers offers, either automatically -- when their phone is detected at a store -- or when they check in manually, as they do in Foursquare.
In August, Best Buy launched an experiment with Shopkick at 257 U.S. stores, giving shoppers rewards when their phones are detected in a participating stores. And Foursquare recently did a partnership with Gap, in which shoppers who checked in at Gap stores around the country received a 25%-off coupon sent to their phones.
This lets retailers "create a layer over the real world," says Dennis Crowley, CEO of Foursquare Labs. Crowley says the Foursquare check-in process should eventually become automatic, but that's still being debated. Some people don't want to advertise their location all the time, he says.
But everybody loves a good shopping deal or at least a more hassle-free shopping experience. And retailers are counting on new technology to provide both.
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