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Retail Kiosk
Retail / Self-Serve Kiosks / Kiosk

Building a Store of the Future

Verifone
Executive Summary

When considering deploying retail technology, human interactions have to come first, and technology should support and enhance those interactions.

We’re at an inflection point in physical retail experiences, and 2019 was a turning point. For the first time in five years same-store sales are stable (versus declining)1, break-out e-commerce brands continue to solidify their positions of growth by opening physical stores2, and success stories like Target, which invested $7BN in 2017 into capital improvements3, are encouraging other retailers like Ulta, Home Depot, and more to follow suit4

So, now that it’s come to it, what do you do to reinvigorate your stores? Many times when we sit down with retail executive teams considering building out the future of their store fleets, the words on the board begin to look like a TechCrunch word cloud. “AR, VR, Chatbots, A.I., Drones!”.

But the reality should be different. When considering deploying retail technology such as self-service kiosks, decisions should center around one singular ideology: human interactions have to come first, and technology should support and enhance those interactions. And, technology should beautifully integrate into authentic store experiences. Consumer expectations are still out-pacing a lot of the retail experience of today. The retail market itself is on the cusp of massive change as it sprints to meet these demands. In this article, discover ways to thoughtfully execute retail-technology solutions that enable experiences that delight customers, empower associates, provide unprecedented analytics, and measurable sales growth.

Next Gen Consumers By The Numbers

According to data collected from the IBM Survey and Kiosk Marketplace Surveys, this is what your digital-first consumer looks like today, and these numbers are only increasing. Eighty-eight percent (88%) of retail customers expect digital engagement. Sixty-One Percent (61%) of consumers are willing to shop in a completely automated store. Seventy-eight percent (78%) of customers say their experiences using an automated service was positive. And fifty-two percent (52%) of consumers indicated that they prefer self-service checkout.

Stores Cannot Compete Like They Used To.

If you look at an image of a department store in 1910 vs. a department store today, not a whole lot has changed. In the mid-1900s, retail growth was booming. Topline revenue was driven by opening more and more stores with huge selections, huge square footage, great prices, and relative proximity to the customer. Proximity, selection, and price were the currency of the mid-century retailer.

As a result, we now have anywhere from 25-29 square feet of retail space per every man, woman, and child in the United States. The next closest country is the United Kingdom with 9 square feet per capita. Today’s stores are competing on a very different set of principles. According to MasterCard, over 40% of soft-goods purchasing takes place at boutique stores with 5-10 locations. As such, today’s currency is now experience, service, and urgency. And all of that retail space built in the last century? We now have an opportunity to use it in creative ways with a small footprint and low overhead.

Physical Retail Complements Online Retail

Online retail today continues to accelerate. It proves challenging for executives determining where to invest (e.g. vs. brick-and-mortar stores) largely because there is almost absolute attribution in eCommerce where most stores are data-starved. For example, if you’re a soft-goods retailer with 25% conversion of store traffic, that means 75% of customers walking through your store are absolute mysteries. If they go shopping online later, how do you possibly know that the in-store experience was a part of that journey? But this doesn’t mean the future is purely online, it just means the role of physical retail stores has shifted. When the best-known eCommerce brands start doing well, what do they start doing? They open up stores. Warby Parker, Bonobos, Cuyana, ModCloth, even Amazon and Alibaba, ALL opening up stores at a rapid pace.

Retail has morphed into a packaged deal inclusive of Online and Offline components. Successful brands realize that they need to cater to all shoppers, not only online ones. Physical retail shoppers combined with online shoppers equals huge growth channels, and retailers who span both channels come out ahead with CLV’s (Customer Lifetime Value). Customers from across all generations still prefer to try products before buying them. “Traditional” online retailers have recognized that the try-before-buy trend can be an opportunity. As and example, stores like Bonobos have opened Guide Shops which are specifically meant for try before you buy. When Bonobos did this, their customer base and basket sizes grew. The perfect blend of online and offline comes when retailers like Bonobos drive physical traffic in their stores and leverage their online-first. This inventory flexibility removes huge pain-points bogging down the traditional retail model – inventory accuracy, back-of-house allocation vs. front-of-house, and staff dedicated to “tidying up” vs. selling. While no model is perfect, these examples of the broader concept, dynamic fulfillment continues to be a huge driver of efficiency and growth in the retail sector. And as consumers gravitate towards more compelling experiences, other retailers are offering boutique selections in-store, leveraging high-touch experiences, and using inventory scarcity as an advantage (get it now or it's gone forever).

Kiosk
79% of people waiting in line abandon the line if it seems 7 minutes or longer.

Thesis: Approach Stores Like You Approach Websites

Many people claim that shopping online is an easier experience with better customer service and less friction. But why can’t these benefits apply to physical stores? They can if in-store experiences are treated like a funnel. In the same way eCommerce sites measure the drop-off points between common customer journeys, stores are beginning to embrace the same systems for identifying “friction.”

When a customer walks in, they either know what they want (searching), or they are looking for inspiration (browsing). Let customers self-identify and then help them optimize their journey for either speed, or experience. Search for moments to make your shopping experience unforgettable. 48% of customers won’t ask for help when they see an item they like but not their exact size/color, when 81% of the time it’s in the stockroom! Forrester suggests that as much as 10% of retail sales are lost due to items not being in stock, when 98% of the time it can be shipped directly to their door. And if you don’t have an item for try-on in-store, a virtual dressing room mirror can allow your customers to envision that item on themselves in any color in your inventory, adding unprecedented confidence to their “site-unseen” purchase, even more so than an online store can provide. 79% of people waiting in line abandon the line if it seems 7 minutes or longer. Never lose a sale! Give your customers the option to skip the line and head straight for a self-service checkout kiosk.

Three Reasons Retail Store Tech. Fails During Pilots

One: Infrastructure. Wifi isn’t strong enough, the internet isn’t fast enough, electricity isn’t grounded, the catalog doesn’t consider in-store only products, there aren’t enough images and engaging interactions. These reasons are important foundations that should be invested in before executing innovative pilots.

Two: Compromises. So often an entrepreneur starts with a great idea, but after weeks of debate and compromises, the final product that launches is a shadow of the initial idea, and often too niche to be widely applicable. 

Three: If your technology doesn’t empower your associates, it’s not going to do well. This means it has to make them both 10X more effective AND be 10X easier to use. Many of the most successful brands out there test their technology with associates as first-class citizens and users of the tech along with customers.

The Verifone Solution.

You have just been given tools and tips for bringing your retail store into the future to better serve both your customers and your bottom line. But how do you go about implementing these solutions? We’d love if you started with us, at Verifone. As a company, we have seen tens of thousands of deployments of interactive and store-experience solutions. Our promise is to take you from novice to expert on what it takes to be successful in your pursuit of what a store of the future looks like.

Our solutions are modular, future-proof, and built with commercial-grade materials and components to withstand years of repeated use and abuse without breaking down or needing to be replaced. When implemented with the right infrastructure and best-practices in place, our retail clients see consistently higher ticket sizes, effective up-selling and loyalty programs, a more personalized shopping experience, shorter lines, and increased labor efficiency. These solutions also allow retailers to take advantage of small and unique locations in high-traffic areas where a store with a larger footprint couldn’t compete.

Our experience installing thousands of successful solutions like the above, with our consultative approach, cutting-edge OakOS software platform, and world-class services makes us the company to beat when it comes to retail innovations. We can help you with design UI, User Experience and Customer Journeys, and thinking through what a playbook for implementation actually looks like. From the software to the hardware to the services (installing, maintenance), we can be your single hand to shake to keep you safe and ensure you have a successful roll-out that increases your top-line and saves you on expenses.

To learn more about Verifone Kiosks, click here!

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1 https://www.nrn.com/finance/same-store-sales-stabilize-2018

2 https://www.adweek.com/digital/digital-ecommerce-brands-are-opening-up-stores-and-showing-that-retail-still-has-life/  

3 https://www.businessinsider.com/target-store-investment-pays-off-2018-5

4 https://www.cnbc.com/2018/03/23/retailers-ulta-warby-parker-ross-stores-opening-more-locations-in-2018.html

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