In-store tech, traditional retailer’s bazooka

When online business is aggressively eating up the market share of offline stores, when traditional retailers are distraught with the growing threat from e-commerce rivals, many startups have sprung up and said, “they are here to help”. They are labeled as the rising trend of “In-Store Tech” and have gained substantial momentum. It is estimated that now the sector has received more than USD 648 million across 164 deals. We identified three main categories of in-store technology, though not limited to as this industry has evolved quite rapidly:

I)Retail Analytics:

We define it is the process of collecting in-store data and analyzing them in order to generate detailed analysis and actionable insights for a personalized shopping experience for each customer.

Retail Analytics is essentially a broad concept. Although traditional people counting solutions have been available for many years, recently more sophisticated technologies have been developed, allowing retailers to have a deeper understanding on how customers behave in the stores. Under this umbrella, we then subcategorize them, according to the techniques which startups proclaim to offer in the current market, although there can be other ways to dissect retail analytics:

  • Beacon&Wi-Fi analytics: tracking smartphones signals (bluetooth for Beacons, Wi-Fi pings for Wi-Fi Analytics) to understand how visitors move around the store. 
  • Video analytics: using existing CCTV cameras or smart camera in the stores to anonymously identify visitors and track their behavior while they shop.
  • Omni-channel analytics: technology-agnostic solution aiming to integrate all physical and digital data sources inside and around the brick-mortar, such as video camera feeds, Wifi&beacon, point of sale system, weather, staffing system, promotional calendar and then turning these inputs into insightful outputs like dashboards, data exports, predictive analytics and custom analysis, real-time alerts, interactive maps, API etc. 

II) In store management

It is usually a solution that helps retailers to enhance the daily operations of the store, ranging from merchandising, inventory, customer loyalty/reward/review, marketing, to staff management. Of course, some startups would just focus on one process, but more and more are telling they are able to support retailers to handle many of the key processes within just one platform. We also need to bear in mind that sometimes the line between retail analytics and in-store management can be overlapping.

One leading example we can think of is LightSpeed, a Canadian startup, one of the most well-funded in the sector, USD61 million in Series C, not only provides POS hardware & software, but also adds on a powerful store management system for inventory management, data analytics, employee management, automated CRM.

III) In-store digital display and assistance

It aims for customers infusing the experiences of physical and digital interactions with the stores they visit. Typical examples we often hear are the smart shelf, robot sale assistant, digital signage/kiosk, virtual fitting room…in general any those fancy, eye-opening, digital immersion tools which retail stores try to experiment.

The best practices we detect are Sephora’s Fragrance IQ Kiosk and Neiman Marcus’s Memory Mirror.

Conclusion: 

For a long time, e-commerce can track shopper activity, analyze consumer profile&journey, and conduct personalized shopping recommendations. But for brick-and-mortar stores, these areas remain like a “black box”. Today most retail chains still cling on POS data, membership CRM, and simple surveys as the primary sources of customer behavior data, thus limiting their analysis ONLY to those who actually end up buying something. These traditional techniques are incapable of providing retailers with the kind of in-store insights &analytics data that e-commerce merchants leverage to adapt the shopping experience for each individual shopper in real-time. Now many in-store smart technologies are able to fill in this gap and build the missing link.

Globally speaking, it is no surprise that retail industry is progressively adopting the trend of in-store technologies in order to understand their customers’ behavior and being able to anticipate their needs. Such urge is apparently becoming the matter of “Do or Die” as they are trying to secure a competitive advantage in a battle in which e-commerce has been continuously gaining the upper-hand.

 

Author: Cecilia wu