Our nation’s high streets are suffering. You’d be hard-pressed to find one anywhere without a couple of vacant windows or closing down signs. And online shopping has arguably been the cause of this demise. According to PwC’s Total Retails Survey 2016 25 per cent of UK shoppers have used their mobile to compare online prices with those in-store. And 41 per cent admitted they would buy from an offshore online retailer if they found an item cheaper. The Office for National Statistics’ ‘Retail sales in Great Britain: Jan 2017’ statistical bulletin found online sales had increased 10.1 per cent year-on-year, and accounted for 14.6 per cent of all retail spending between 1 January 2017 and 28 January 2017.
Although technology has contributed massively to physical retail’s demise, it could also be the thing to save it. One of the biggest headaches for retailers is keeping an up-to-date inventory, and this becomes increasingly difficult as the number of product lines grows and when customers don’t return stock to the shelves. To address this issue PervasID has developed a system that uses its patented advanced signal processing techniques combined with off the shelf passive (battery-free) RFID tags and distributed antennas that can provide “near 100 per cent accurate real time” stock inventory data. The system is commercially available and has been successfully trialed with a retailer over the last 18 months.
Sithamparanathan Sabesan, PervasID’s CEO, says that the signal processing techniques developed by PervasID address this challenge and provides wide-area coverage using DAS. DAS is expensive but is often the in-building cellular option of choice for large shopping centres.
Sabesan adds that he sees fashion retailers as the early adopters of this technology but he’s also seen interest from food retailers and is trialling the technology in other sectors including security and healthcare.
One of the benefits of having real-time inventory data is being able to pinpoint where items are, and when. “Often many retailers don’t know where their stock losses are occurring. [If it’s due to theft] they don’t know who is stealing or where it’s taking place; in the fitting rooms or in employee-only areas, for example. This technology will tell them where these items are disappearing so they’ll then be able to act to reduce stock losses.
“With click and collect, our system will tell the retailer where each of the ordered items are,” Sabesan adds. “With conventional barcode technology you have no idea whether the items are on display or in the fitting room. With our system their locations will be displayed on a screen, so an employee will be able to quickly gather the products for delivery with the help of a handheld reader.”
Another potential benefit is the large amount of data it can generate on shopping habits. “Retailers can see items being picked out from the sales floor and going down to the fitting room… This big data set can help them decide which brands they should be selling and how they should promote their wares.”
At present PervasID is partnering with analytics firms as it is focusing on “getting it off the ground and delivering it to early adopters and other customers”. Looking to the future, the real-time inventory data from this system could end up in the hands of consumers too. “I think that’s where it needs to move to…” Sabesan says. “The system gives the opportunity for retailers in the future to maximise the customer’s experience... “
He adds that the installation process is relatively straightforward. Once his company has installed a standalone ceiling-mounted system it then provides the client with an API that allows the data to be fed to other third-party software, which in turn updates their stock management system. He adds that the integration between the two systems only takes a few days. Once PervasID’s system is running store employees would use an app on their devices to receive stock data and alerts warning them when shelves need replenishing, allowing them to work more efficiently.
Iconeme is another company focused on fashion retailing. It has developed its own Bluetooth Low Energy (BLE) beacon (VMBeacon), which it installs in mannequins. Each beacon has its own ID configured to display in-app information on the clothes each mannequin is wearing to shoppers, allowing them to quickly buy the items online. In the case of window displays this can be done even when the shop is closed.
Jonathan Berlin, Iconeme’s CEO, says that the “easy part of the puzzle” was ensuring the beacons were installed correctly in the mannequins. Iconeme’s partner company Universal Display is a mannequin manufacturer “so we know how they’re produced. There are little bits of metal in there but they’re not in the way of the signal, we position the beacons in a particular place that is practical for maintenance and installation, [and gives the] best signal, so no problems whatsoever.”
In contrast, he says that probably the hardest aspect is getting the consumer to download apps, “so you have to work with good partners and have exciting ways to get people to do that. Once you’ve done that the journey is much easier.”
He explains that Iconeme went into four retailers and then was picked up by around another six. “House of Fraser used this in its e-commerce stores and found that it worked very well. It had a basket increase of about two per cent”. Berlin adds that House of Fraser was using the system to educate both the sales staff and consumers about the products on display. However, it recently had a change of personnel so that project is now on hold.
Berlin explains that Iconeme has performed a confidential trial for a very large US corporation, which used VMBeacon in conjunction with “interceptors – people standing at the front of the store, and when customers came through they would stop them, have a chat with them, and offer them a voucher to get involved with the trial”.
“The feedback after a three-day trial with several hundred people was very positive, they saw huge increases in engagement… We’re still working with that retailer to work out an implementation.”
Berlin says that Iconeme is currently developing the next version of its technology, to add personalisation. “Our system already knows who you are and will welcome you personally but we are working [to allow it to] make suggestions for you based on your previous purchases.”
There was quite a lot of technology aimed at retailers on display at this year’s Mobile World Congress. Rambus’ Unified Payment Platform allows customers to scan items themselves and pay for them on their mobile devices using any combination of credit and debit cards, gift cards, loyalty scheme points and coupons. It uses tokenisation to minimise the risk of fraud through preventing would-be hackers from intercepting data.
André Stoorvogel, head of marketing at Rambus, says that the buying process could be made even more convenient by using beacons to automatically charge customers when they leave a store. He explains that the benefits of the platform for retailers are a combination of security, reduced costs (no need for physical checkouts and point of sale devices), and increased revenues from having a better picture of consumers’ buying habits. For example, retailers would be able to see the items that customers scan and later remove from their in-app basket while shopping in a physical store.
Sentiance, a data science company, has an app that uses algorithms to translate sensor data from smart devices into the users’ journeys and daily routines, while classifying locations as work, home, shops, offices, restaurants, etc). The company also has a software development kit that allows its customers to embed this functionality into their own apps. Patrick Lynch, Sentiance’s VP of business development EMEA, says part of the thinking behind this approach is that while retailers’ knowledge of their customers typically only extends to what they buy, understanding their daily routines could help to ensure that they are sent offers and notifications when they are most receptive to them. He adds that research suggests being able to do this in response to a person’s mood would be most effective.
Panasonic demonstrated LinkRay – a system that modulates the backlight in video displays so that consumers can watch adverts and infomercials through their smartphone camera and be given information about those products or services. Each display’s backlight pulses broadcast a unique ID that is recognised by an app, which then downloads the corresponding content from the cloud.
Paying for shopping and working out how best to get shoppers’ attention are both big bonuses for retailers. But more consumer-oriented technology is being developed for the retail sector too. Bismart, a big data company, has created a Magic Mirror – a freestanding touchscreen display that acts as a personal assistant for shoppers. It uses facial recognition technology and can suggest items based on their profile (if they have one), age, gender and mood. Cristina Sánchez Serra, Bismart’s operations director, says it is working on showing the mirror’s user in the outfit it recommends, but the main issue is ensuring the clothes hang correctly on the individual. Solving this would require a 3D scan of the shopper
This technology does exist, with companies like bodi.me and 3D-A-PORTER offering 3D scanning services. Seeing what we’d look like while wearing different items without the need to try them on could have massive implications for the floor space needed to sell clothes. It might possibly lead to an Argos-style retail model; where the bulk of the shop is a warehouse. However, if this technology was readily available at home would people still hit the high street when then they can order clothes in comfort, always knowing that they will be the right size and presumably benefiting from reduced overheads? Fortunately, there’s more to buying clothes than aesthetics – the desire for comfort and the inability to feel clothes before you buy remotely might be enough to keep the bricks-and-mortar model intact, especially for premium purchases such as wedding dresses.
Could the real value of physical shopping trips come from combining some of these technologies together? Imagine a scenario where a customer can walk into a shop, scan the items they want with their smartphone and then walk out, with the shop’s inventory system flagging their purchases as sold, ensuring that when the items (or rather their RFID tags) leave the store no alarms go off.
A link between the type of real-time inventory system being pioneered by PervasID and something along the lines of Rambus’ Unified Payment Platform could allow retailers to automatically discount slow moving or perishable stock approaching its sell-by date. Real-time inventory monitoring might also improve the appeal of apps like NearSt, which is intended to encourage people to shop locally by displaying products that are in stock nearby and offering one hour delivery or instant in-store collection. It is currently only available in London and works just for books, but the company is in the process of adding more types of products.
While online stores will always have a cost advantage over their physical counterparts, it’s clear that the boundaries between the two are becoming blurred. There’s plenty of technology that can be used to improve the in-store experience for shoppers, whether it’s item payment or finding a new style. If physical stores can enhance the entire shopping experience for both retailers and consumers, and make it as quick, easy and enjoyable as buying online, they might be able to avoid shutting up shop.
