The immense popularity of digital-first businesses like Google, Uber and Amazon can in many ways be attributed to their ability to streamline the customer journey by removing time-wasting activities – be it finding information, hailing a taxi or going out shopping.
Consequently, consumers now have a greater expectation for a ‘frictionless’, ‘simple’ shopping experience. Anything that distracts, interrupts or obstructs whilst trying to find a product or complete a purchase can massively hinder the shopping and brand experience.
It is vital for bricks-and-mortar retailers to understand this, and adapt their business model for new shopping habits. With over 80% of consumers still preferring physical stores to online shopping, the high-street is far from dead. However, retailers must abide by new expectations of service and in-store experience or risk losing consumers to online stores. For instance, Amazon and Nike have elevated their flagship stores into fully-immersive brand experiences by utilising technology and staff expertise to make shopping more personal and engaging.
It is evident that bricks-and-mortar establishments need to transform in order to flourish. Even beyond the high-street, businesses like supermarket chains are having to deal with the consumers wanting frictionless experiences.
Demand for Stress-Free Supermarkets.
In a 2016 report by Canstar Blue, it was found that queues at the checkout, other customers and self-service machine errors were three of the top five reasons why people disliked grocery shopping.
Above all people want stress-free and convenient shopping. This is evident in consumers moving away from a single-mode of grocery shopping and claiming no single retailer as a primary source for FMCG products. According to a study by FMI, 49% of shoppers chose a singular supermarket as their primary grocery store, vs 67% just a decade ago.
Now people are happy to take advantage of different providers and channels for each of their specific grocery and FMCG need. Beyond traditional supermarkets and superstores, this includes convenience stores, discount outlets and eCommerce.
The Impact of Online on the Physical Store.
Whilst online only accounts for 7.5% of all FMCG sales in the UK, many supermarkets fear how eCommerce companies like Ocado and direct-to-customer services could disrupt their business in the future.
As such, most major supermarket businesses (Tesco, Waitrose, Sainsbury’s, Aldi etc.) have been rapidly improving the digital side of their business and investing more money into dark stores. Alongside this, they have been taking influence from Apple and Nike, and are now improving the in-store experience by utilising digital technology.
In 2011 Tesco introduced Scan as You Shop, as a way to remove the stress of queuing from the supermarket. The model is based upon giving Clubcard holders the ability to scan products they want to buy whilst they’re shopping – using a handheld scanner. They can then bag the items straight away, rather than having to pack at the till.
Whilst numerous other retailers have introduced the ‘scan as you shop’ model to help streamline the shopping process, it has not necessarily had as significant an impact as expected. In fact, it is arguable that the lack of uptake among shoppers is due to the service actually being disruptive to the flow of shopping – by forcing customers to scan every item during the actual shopping phase.
No Checkouts – The Future Of The Supermarket?
Amazon have arguably made the biggest leap forward in terms of providing a true frictionless grocery shopping experience. Early this year, Amazon opened their first experimental supermarket, Amazon Go. By using cameras and sensors to track how people interact with various products, Amazon has been able to distinguish what customers intend to buy on-the-go. As such, they can remove cash registers and checkout lines from the customer journey – with people being billed after leaving using a credit card on file.
Whilst the technology is still in its infancy, it is already influencing how other supermarkets operate. Following the Amazon Go experiment, the Co-Op announced that they would introduce ‘scan and go’ – which allows shoppers to scan and pay for items on their smartphone while they shop, and then walk out without having to visit a till.
Not only does this model enable customers to dictate the pace of the entire customer journey, but it can also help the supermarket improve throughput – making supermarkets less congested.
The biggest threat to the traditional supermarket business model may now be AI devices like Amazon Alexa, Google Home and the Apple Homepod.
There has been a sharp increase in the adopting of smart speakers – with estimates that by 2020 50% of households will own an Alexa device. Here in the UK, 2.7 million households are already active on either a Amazon Echo or Google Home device.
As the uptake continues to increases and people become more comfortable interacting with them, the idea of using this device to help influence and drive purchases will become more natural. Whilst Amazon’s options for In-Skill Purchasing is still limited, they are rapidly getting closer to providing this service globally. The consequence will be that people will be able to order products without ever leaving the home or interacting with a screen.
Imagine, in the future, you will may very well be able to complete your grocery shop by just reading out a shopping list.