October 10, 2017 | REINT JAN HOLTERMAN
“Retail is not dead, yet it needs rethinking.”
This is a sentence that keeps resonating in my head every time I’m in a supermarket getting my weekly groceries, and when I go out shopping with my family. Retail is not dead. Wherever I look, I see consumers — just like myself — continue to spend their money on food, clothing, electronics, furniture, and so on. In fact, at times it looks even busier than ever before. What has changed, though, is how we as consumers spend our money and time while shopping.
Different retail segments behave differently
Here’s the thing: “retail is not dead” is way too generic. Zooming in to a segmented level, we can see tremendous differences. Whereas, for example, physical apparel stores are losing ground quickly to e-commerce, other sectors (like grocery) continue to stay strong offline. We have even seen an interesting move made by Amazon; a traditionally online-only sales machine buys Whole Foods and is now investing quite significantly into the offline groceries channel.
It cannot be overstated, however, that the way consumers are spending their money has changed. It has become a much more delicate play between various channels and touchpoints than before. Convenience, service and efficiency have become the key words for retailers to focus on.
Convenience, service & efficiency
These three words drive most consumer-facing innovations in the retail landscape. One of the innovations I’m most excited about is mobile self-scanning. Mobile self-scanning, sometimes also referred to as personal shopping or personal scanning, is the ability to let consumers scan their items before they put them into their shopping basket.
This option is relatively common in grocery stores in Western-European countries like France, UK, the Netherlands, Sweden and Italy. It is much less seen (yet) in North America and Asia Pacific, although we have seen some early adopters, such as Stop & Shop in the USA.
Mobile self-scanning is particularly well-suited for grocery stores, supermarkets, department stores, super stores and to some extent also for larger specialty stores. In larger stores, we typically find self-scanning solutions that use dedicated scanning devices. In smaller retail formats such as convenience stores, smartphone-based self-scanning solutions are popping up, where consumers have installed a self-scan app onto their mobile device, what we call a “bring your own device” (BYOD) scenario.
Self-scanning: a fast-growing market
The nice thing about mobile self-scanning is that it cleverly combines those three key elements — convenience, service and efficiency — all into one. Not surprisingly, the expected annual growth rate for self-scanning software tops 14% (CAGR, 2015-2020) according to research agency VDC. And according to a survey carried out by Nielsen among 30,000 consumers in 60 countries, “a hand-held store scanner to purchase products as they shop to avoid checkout lines is used today by only 12% of global respondents, but 70% are willing to give it a try when it is available”—the highest percentage of the 14 flexible retail options included in the survey.
Convenient, meaningful interactions while shopping
One of the great benefits of mobile self-scanning for consumers is that they can receive real-time information about products, ingredients, shelf locations, prices, promotions and recommendations while they are actually shopping. This information is either displayed on a dedicated, “retail-hardened” scanner device or through the consumer’s own smartphone running a self-scan app. Instead of having to search for products in-store, your consumers can look at the handheld device and determine which aisle the item is located in using a virtual planogram. Or they can get an instant notification that if they buy three of an item, they’ll get a fourth free. Or, they can receive a spot-on recommendation for wine that goes well with the meat they just added to their basket.
Bringing the shopping list to life
Another great example is that shopping lists — often prepared at home or on-the-go — can be “brought to life” on the handheld scanner or in the scanning app. After consumers having ID’ed themselves by scanning their loyalty card, for example, their virtual shopping list can be loaded and rearranged to reflect an optimal walking route through the store. These types of smart interactions turn everyday grocery shopping into a convenient, highly personalized experience.
Self-scanning increases revenues for retailers
This is a solution that’s not only beneficial to the consumer, but also immediately improves bottom-line results for retailers. The VDC report noted that retailers should expect to see an increase in average basket value of approximately 10% (!). The reasoning behind this is two-fold:
Boosting in-store efficiencies
Yet another benefit for both consumers and retailers is time savings. Consumers can use self-scanning for so-called “scan-bag-go” journeys where they start packing their shopping bags while shopping, and in the desired order, matching the unpacking process later at home. Retailers can expedite the check-out process and increase store efficiency levels, requiring less staff time and reducing overall queuing time. Moreover, self-scanning allows retailers to roll-out smart cross-sell and upsell campaigns, introduce personalized pricing and collect valuable real-time insights about consumer behavior in order to optimize store layouts.
But perhaps the most important benefit of all is that consumers will feel much more empowered while they’re shopping; product and pricing information is right at their fingertips while they go through the store. This less tangible benefit should not be underestimated in a time when retailers need to put consumers at the heart of their retail business.
Interested in bringing mobile self-scanning to your retail environment? Let’s start a conversation.