This probably isn't your first time reading about how COVID-19 has served as a catalyst for technology adoption across retail. But what hasn't been addressed is whether or not specific consumer behaviors embraced during the pandemic will turn into habits that last long-term.
For example, as retailers worked to keep employees and shoppers safe, buy online, pickup in store (BOPIS), and curbside pickup gained momentum. Adobe Analytics found that BOPIS orders surged 208% in April compared to April 2019.
BOPIS has been viewed as a win-win for consumers and retailers alike. For shoppers, it’s a quick and convenient method to buy essential products. With concerns around COVID-19, it’s also a safe method that minimizes contact. Take for example, a family that’s working from home that has children. Getting groceries for the week becomes that much more difficult when stores request only one shopper per household, not to mention potential exposure risks.
On the flip side, BOPIS has proved to be a beneficial technology to retailers as it’s more cost-effective than delivery options. It has also been important to quickly deploy. As many were forced to reduce store hours for cleaning and re-stocking, and limit in-store foot traffic, quickly finding fulfillment solutions such as curbside pickup and BOPIS helped alleviate losses incurred from these restrictions.
There is much curiosity around the future of BOPIS. With consumers quick to adopt and adapt to the technology, will they be quick to abandon it in favor of shopping in store once it’s safe again (and who knows when that will be)? What do retailers looking to implement BOPIS need to consider? Luckily for them, BOPIS is getting a new look.
Prior to COVID-19, BOPIS was already a fully functional service that many larger retailers offered and one that had been gaining popularity. But for smaller retailers, execution tended to be more difficult. COVID-19, though, proved time was of the essence. If retailers didn’t have quick reflexes, shoppers would find somewhere else.
Of course, major implementations or system overhauls – especially in a hurry – to install BOPIS as a new service isn’t really ideal. And fortunately, it’s not even necessary.
The new look of BOPIS is much “lighter.” It allows for the technology to be deployed instantly, without the need to integrate with existing systems. As soon as it’s needed, it’s available. What’s more, flexible BOPIS has the ability to stand as an independent solution. All that’s required is a smartphone-enabled app and a QR code. If any products are unavailable, a retailer can simply note them in the app. Users can automatically sort shopping lists according to refrigeration zones, providing an easy-to-use navigational interface.
A flexible, standalone BOPIS solution also provides the option for retailers to address integrations later on, as they have the need or desire to do so. For example, they can automate pricing and promotions and merchandise management. This ensures that running a seasonal campaign or adding new products to the BOPIS offering is simple. Doing so makes management of the BOPIS solution easier long-term and also allows for integrations to be available as soon as they’re needed.
In the tough and fast-changing climate of retail, speed and scale is essential. Consumers will continue to utilize BOPIS because convenience and saving time are major factors in grocery success.
Although implementation has historically been difficult for retailers who need to instantly deploy BOPIS services – and impossible without integrating with their existing systems – that’s no longer the case. GetMyGooods is an app that does just that, playing a critical role enabling simple grocery ordering and pickup while ensuring the protection of everyone involved.
To achieve a future of frictionless retail, retailers must first be able to understand when and how to leverage centralized cloud infrastructure and when to defer to decentralized edge networks in the store. While the adoption of the cloud has led to unprecedented enterprise agility and intelligence, there are many retail services – old and emerging – that are better suited to operate at the edge.
Currently, edge computing is often used as a safety net as it provides offline functionality of key applications, such as processing transactions. After all, if a retailer unexpectedly loses a network connection to the cloud and their entire value proposition – the ability to trade goods for money – evaporates.
But edge also enters the equation as we start to consider how emerging concepts like Amazon Go-style checkout work. Cameras in these stores produce massive amounts of data per second that must be processed just to determine if someone is purchasing a product. This massive bandwidth requirement demands that it should be managed by an edge server in the store.
Given that frictionless will define the next generation of the customer experience, retailers need to strike the right balance between edge and cloud computing quickly. Let’s explore what that balance consists of:
The cloud has made it much easier for retailers to offer new services and conveniences in their stores that previously were impossible. Regarding personalization, the ability to centralize customer data from across channels and devices, and process the information quickly, allows retailers to reach individual shoppers with targeted messages. The only other requirement a retailer must consider at the store level is providing free guest WiFi. This guarantees mobile connectivity in order to route personalized offers directly to shoppers’ phones.
But not all frictionless processes are best suited for the cloud. When it comes to checkout, edge computing can help retailers make improvements, as they’re able to process and take action on data closer to where it's actually generated — near the customer, and on a local, individual store or device level. At the edge, employees can process payments anywhere in the store on their handheld devices, eliminating the need for shoppers to wait in a line.
And as retail environments continue to offer fewer manual checks, they will rely on automation and a host of distributed applications to perform key functions such as managing accurate real-time pricing and inventory control.
As frictionless concepts continue to evolve, stores need to act as data centers to provide insights. However, this is where bandwidth becomes an issue. Edge devices are good for collecting local data, but cloud computing should be used for large-scale analysis. Cloud computing allows for massive amounts of data storage, in which retailers can generate insights, trends and solutions to better run their business.
What’s more, having a centralized repository for all stores where assets and data can be aggregated in one place ensures users can access it. It also means they’ll have access to any tools they need to act on them – from anywhere, at any time.
As shoppers increasingly expect frictionless retail – whether that’s eliminating waiting in line or having the same level of personalization applied in-store as when they shop on a mobile device or desktop – retailers must have the flexible and scalable technology to provide it.
It’s a difficult balancing act, but fortunately, you can utilize both cloud and edge computing to maximize potential. Reach out to learn more about how our solutions can help future-proof your retail practices.
We’ve spent some time looking at the types of shopping behaviors and trips that define the overall retail landscape, the unique areas of friction that create frustration for each one, and the roadblocks for achieving frictionless retail.
We’ve concluded that in the context of both online and in-store retail, true frictionless retail will eliminate any barriers along the path to purchase that are driven by inefficiencies of process or technology. To get there, retailers need to innovate without being reckless. They must laser focus on solving major pain points and go all in on finding great solutions for their shoppers’ unique problems.
Once retailers identify the problems, the sooner they can solve them. There is no one-size-fits-all, golden ticket game plan that eliminates friction overnight, but the way retailers can figure out the right plan for their stores is to:
It’s tempting for retailers to try and solve problems with patchwork remedies, doing what they can to make incremental changes to each area. However, reactionary retailers won’t be able to take leadership positions in their markets as customers defer increasingly to those who proactively invest in creating more streamlined experiences.
That’s not to say retailers need to take big leaps and disrupt business as usual. In fact, going all-in across the board right away could cause disruption for a lot of shoppers, and even if some people love the new efficiencies, others will feel lost.
For example, going all-in on mobile checkout and getting rid of cashiers could be a dream come true for some tech-savvy shoppers, but this method leaves older demographics in a lurch. Instead, incentivize adoption by offering discounts or loyalty perks for using the new system. As more users adopt the it, lines will get shorter and everyone will become happier. It’s a measured transition that creates value for everyone, not just early adopters.
Every vertical will experience frictionless retail differently. Retailers will learn from one another, reprioritizing innovations that prove easy to deploy and are highly valued by shoppers. There will be leaders and laggards and many in between. But shoppers will win.
For centuries, innovations ranging from steam power to box trucks to box stores to online shopping have made it exponentially easier and cheaper for consumers to get what they want. The customer succeeds when business moves faster, operates more efficiently, and provides the service they don’t yet demand but immediately love.
And while consumers are the unyielding primary beneficiary of this unstoppable force of progress, the retailers and innovators who enable it have always been handsomely rewarded. While no one knows what a truly frictionless future looks like or how each vertical will enable it, history tells us that those who focus on creating great experiences by eliminating friction will be its greatest champions.
Contact us today to futureproof your business by investing in what’s next for frictionless.
We recently discussed how shopping behavior impacts frictionless needs and the technology options retailers should consider to eliminate pain points in the shopper journey. Consumers expect a seamless journey at all touchpoints, and if a brand fails to deliver on this, they will lose to their competitors and fail to keep up.
But once the right technology is implemented, does it guarantee smooth sailing from there?
Not necessarily. We’ve seen the challenges that retailers face when the solution doesn’t deliver on its full promise, leading to frustrated customers and low return on investment. Retailers obviously want to deliver real value to customers and their bottom line with these frictionless initiatives, but to do so requires addressing the biggest challenges in terms of consumer adoption, technology and cost.
Here are the common roadblocks that retailers must address to successfully bring the ‘frictionless retail’ experience they are striving for.
Implementing frictionless technology is a waste if consumers don’t use it. The key to high consumer adoption is to ensure that there are great benefits to the technology that will make their life easier, not harder. Some of the top reasons that deter shoppers from using the technology include:
There’s nothing more frustrating than when technology doesn’t work the way it’s anticipated to. Technical errors will create IT problems, which is why the right processes must be put in place to ensure there’s little interruption and the system can support high traffic now and in the future. Here are two main issues to consider:
Finally, costs – up-front, long-term and opportunity costs - are fundamental considerations for any business decision. Where these resources are allocated are often influenced by executive perception and organizational culture. Large companies often have leaders who run the business with old-school thinking, putting the business at risk of underestimating the risks of maintaining the status quo while also underestimating the problems of investing in promising technologies without the right deployment plan.
However, innovative retailers will find that if they are addressing their customers’ unique demands and implementing the solutions correctly, they will see an increase in ROI and become even more equipped to serve a convenient and enjoyable experience for all current and future customers. Frictionless retail may seem like it requires a daunting effort, but with a smart, long-term plan, the transition will be incredibly worthwhile.
To learn how GK Software can help you remove roadblocks and address these key challenges, contact us here and start creating a truly frictionless experience today.
At first glance, Dynamic Pricing Systems and Recommendation Engines may not have too much in common. Dynamic Pricing is meant for targeted price optimization so a retailer can sustainably grow revenue and profit. Recommendation Engines, on the other hand, ensure that customers receive excellent online service, even though there is no sales associate at their side while they shop.
While Dynamic Pricing Systems and Recommendation Engines operate in different worlds, they have one very important thing in common: they generate added value from data and focus on the retailer’s most important asset: customers. After all, customers are the ones who ultimately decide on the success or failure of a retailer. In this context Dynamic Pricing Systems and Recommendation Engines have even one more thing in common: The most successful retailers (especially Amazon) have been using both technologies for years!
With a Recommendation Engine, you as a retailer can control the customer experience of every single shopper. You are able to specify at which customer touchpoints what products or product groups are to be offered. The AI then selects the products that best match the customer’s interests. From there, you can decide whether the AI should only show products that are directly geared to the customer’s interests – offering the best possible service – or whether it should also recommend additional products that offer your business high margin, turnover or sales potential.
In most cases, the combination of both approaches is worthwhile as it achieves customer satisfaction and serves your business targets profitably. Additionally, I would like to emphasize a great benefit that you generate here quite incidentally: You gain a deeper understanding of your customers’ interactions with products, such as:
With all this information, you’re able to optimize inventory levels and also make price decisions dependent on the most important indicator of all: the customers. With dynamic price optimization, you can supplement your pricinge processes with a system that makes statistically valid and profitable decisions – for your entire product range. More importantly, the AI uses your existing data (e.g. those from the Recommendation Engine) and converts them into additional income because it runs processes that a pricing or category manager cannot perform:
Based on this, a daily updated price is calculated for each product within the framework of the pricing management specifications. Retailers still have full control over the strategic direction of their pricing; The AI only controls the processes that cannot be handled manually – neither qualitatively (mathematical accuracy and inclusion of ALL relevant pricing factors) nor quantitatively (for all items in the assortment).
To close the circle, Dynamic Pricing Systems and Recommendation Engines can support each other and maximize the common added value. Recommendations can ensure that customers are made aware of very specific products – for example, those that you as a retailer would like to sell as soon as possible. If these products are also given an attractive price by the AI, you can boost your sales in a very targeted manner and avoid disadvantageous discounts.
Would you like to learn more about the effects of both systems in place? Just a few keywords about that: Bundle pricing and couponing! You will find out more in my next blog post – or, in the meantime, sign up to be the first to get this information. :-)
In our last blog, we explored how shopping behaviors impact frictionless retail needs. We looked at eight different types of purchases that uniquely affect the shopping experience a customer expects. We also explained the common friction points retailers need to address for each of these customers.
Today, we’ll identify the different frictionless technology options retailers can leverage to eliminate these pain points. These technologies are paving the way for retailers to achieve the ‘frictionless retail’ they envision – one based on the unique needs of each experience. Only with the right solution can retailers deliver the speed, ease and convenience that today’s shoppers demand.
Here are just a few of the many different frictionless shopping services retailers can provide based on each stage of the shopping journey, ranging from the prominent to the possible:
Like we mentioned in our last blog, the last mile is essential for impulse purchases. With more shoppers moving online, this will look differently than candy at an in-store checkout line. Instead, it will be based on the recommendations at the checkout page that will have customers “add to cart.”
With so many technology options available, retailers will first need to evaluate the main friction points that their customers care about, and from there, determine which of these frictionless options will lead to greater shopper satisfaction.
To get started on addressing your customers' unique needs with frictionless shopping technology, contact us today.
I can report from the experience of many projects: Markdown Optimization is one of the topics that retailers are particularly concerned about – across all branches. Because markdowns – and especially write-downs – limit gross profit. Therefore, it is important that retailers proactively manage their sales and keep write-downs as low as possible. This is not least essential for the overall success of a company. The particular challenge with markdown pricing is, that those products whose prices need to be intelligently reduced, are already at the end of their product life cycle. As a rule, the following applies to such products:
For pricing managers, these special circumstances create a real bottleneck: in order not to sacrifice margin needlessly, they would have to regularly determine which items of their entire assortment meet these criteria, and for those that do, what the appropriate price reduction for each one should be. This would take far too much time. In the end, a “spray and pray” approach to reductions are generally accepted as a necessary evil, even though they are strongly detrimental to margins. It’s akin to a watering can – only some water willreach plants, and the rest will be wasted on the ground. You can hardly earn margin with such a watering can approach; a more direct nozzle is needed.
From an economic point of view, it is essential to rethink the pricing process for the markdown optimization. The following objectives must be combined:
Fueled by AI, these solutions can forecast sales per product for the coming days based on the latest transaction data (current clicks, created shopping baskets, purchases, etc.). Depending on the specified target sales date, the daily price is then determined for each item. If the target sales date is close and the sales forecast is poor, the price is reduced. If the sales forecast is good, the price is either minimally reduced or is even increased.
In contrast to the watering can approach, an algorithm re-evaluates each individual product every single day – making the top priority the retailer-specifiedsales date. Measured against this, the algorithm only reduces the price of the products that would not be sold by the target date. All other products are either only very gently discounted or – if there is demand – the price is even increased again.
Across all products, you can then create a profitable balance between aggressive selling and consistent utilization of your margin potential. The sales process is thus margin-friendly, your goods go out of stock on a predictable timetable and you reduce your markdowns considerably.
The best thing is: the manual effort is remarkably low. How low? You should see it live!
One of the reasons why retailers increasingly rely on AI-based Dynamic Pricing is the huge amount of data and influencing factors that need to be considered for price determination: Article master data, purchase prices, sales quotas, inventory levels, competitor data, promotions, real-time transactions, historical data, seasonal trends, regional factors, weather influences – to name just a few. The crucial point is: the amount of data available is huge. Huge, but full of potential – especially in the age of AI! Because an artificial system is easily able to process large amounts of data in seconds and derive meaningful analyses. Every day I see in projects how great success can be achieved with comparatively little effort when work processes are digitally supported and thus optimized. In the area of dynamic price optimization, these successes are particularly visible because they can be measured numerically and the ROI can thus be clearly determined.
What do you need now to use an AI for your price optimization? The list is quite manageable, as you will see:
The AI needs your sales and transaction data to calculate the demand for each product in your range. Keyword: price elasticity. (If you need a short recap, you can find it here). This forms the basis for every price decision of the AI. At least all sales information is needed: Which items were sold at what price. All transaction information, which can be used additionally, improves the AI’s forecasting quality and enhances its results again: viewed products, created shopping baskets, cancelled shopping baskets, saved watch lists or entered search terms, to name just a few examples. It makes sense to make this data continuously available – either via real-time tracking (a powerful Dynamic Pricing software provides this feature) or e.g. via data feed from your SAP CAR system.
Product master data is the digital representation of your assortment and thus an important tool for dynamic price optimization. They usually provide a lot of different article information: product ID, master-variant assignment, current price, RRP, lower and upper price limit, seasonal identification, brand, color, size, stock level, expiration date or target sales date and much more. An AI can use these attributes for various tasks:
Product master data is usually transferred automatically to the AI software once or twice a day with a CSV import or can also be transferred automatically via SAP S4/HANA.
Finally, I would like to share with you some experience about the time you should plan to integrate an AI for Dynamic Pricing into your processes. The implementation of a price optimization software is carried out in three steps:
Afterwards the system goes live and optimizes your prices continuously. For projects in e-commerce, this process often takes no longer than 4 to 6 weeks, since many processes – by their very nature – already run digitally. The shortest implementation phase that I have ever seen so far even lasted only 3 weeks (until today one of the most remarkable projects ever)! In stationary retail it usually takes a little more time, but here too, 9 to 12 weeks is very good for planning.
Now only one question remains: When will you go live?
If you haven’t heard already, we recently launched GetMyGooods, an app that plays a critical role enabling simple grocery ordering and pickup while ensuring the protection of everyone involved. The app is designed to provide retailers a way to instantly deploy buy online, pick-up in store service by eliminating the need to integrate with existing systems. That way, retailers are able to focus on ensuring their customers can safely get the products they need.
GetMyGooods is built on the idea that consumer behavior is changing because of the COVID-19 pandemic, and the adoption of contactless retail will accelerate as retailers and shoppers limit exposure to potential carriers.
Let’s explore how the app overcomes system integration hurdles and where buy online pick-up in store (BOPIS) will evolve from here.
Retailers need a solution now to provide contactless applications in the store. There is an immediate need to enable simple and reliable ordering for critical consumer goods, which means stores must overcome complicated integrations and quickly deploy the basic functionalities needed today.
To do this, system integrations can be bypassed in the short term to make critical service improvements that can be addressed over time. Retailers can then enable more interfaces, such as pricing and promotions features, later down the road.
That’s why we’ve created GetMyGooods so that retailers don’t have to spend time and energy integrating with current systems such as merchandise management or point of sale. Customers simply download the app on their smartphone and start placing orders.
With social distancing measures in place, BOPIS has become increasingly popular, with one in 10 respondents having tried this fulfillment option for the first time during the pandemic, and 13% having increased the frequency in which they’re using it.
New shopping habits will likely stick after the crisis has passed, and the increased familiarity with and adoption of online grocery will have a long-term impact on the acceleration of BOPIS – or curbside pickup to limit in-store traffic – and contactless payments, even for items collected at the store.
It will be up to retailers to drive a change in processes as consumers adopt these new fulfillment and checkout options. By allowing customers to do everything from browsing to payment on their personal device, retailers can ensure the safety and health of both employees and shoppers.
COVID-19 has taught everyone how important it is to future-proof the retail industry to survive in a tough and fast-changing climate. The retailers who succeed post-pandemic will be the ones who are already implementing innovative solutions at speed and scale and who continue to look for customer-focused technology that enhances safety and convenience at an even greater level.
To get started, visit the GetMyGooods website and let us help you rapidly deploy this critical new service today, protecting your business now and in the future.
GK Software, the international market leader for store solutions, today announced availability of its GetMyGooods app, which allows shoppers to order essential items online and pick-up in store. GetMyGooods helps limit in-store contact between employees and shoppers and restricts the number of stores shoppers visit when looking for out-of-stock products.
After downloading the app, shoppers can order the products they need from their mobile device. Their shopping list is sent directly from the app to the retailer, where the order is prepared in store by associates. Once ready, the customer is notified and can pick up their items immediately from the store, confirming their order through a QR code and paying on-site. This eliminates the need for shoppers to spend time in the store searching for essential products that may be out of stock. At the same time, the number of interactions between sales staff and customers is greatly reduced.
“GK launched GetMyGooods in order to quickly provide the critical service of grocery pickup while ensuring the protection of everyone involved,” said Michael Jaszczyk, CEO, GK Software USA. “Buy online, pick up in store had been gaining momentum in retail, but rapid adoption is now critical as retailers look to provide another level of convenience as safety requirements take precedence.”
The app is designed for immediate use and is easy to operate. By eliminating the need to integrate with existing systems such as merchandise management or the point of sale, retailers are able to focus on ensuring their customers can safely get the products they need, while also delivering exceptional service and protecting customers and employees alike.
The GetMyGooods App is available for download from the Apple App Store and Google Play Store today. Retailers can also register and find more information at www.getmygooods.com.