Retail faces up to digitally-enabled reality

Our Head of Industry Insight, Miya Knights, attended RetailEXPO 2019. You can read her key takeaways from the conference, separating the hype from the reality when it comes to online disruption of the retail industry, and summarising new learnings about customer behaviour after bringing digital in-store.

Seize Digital
Author: Miya Knights

Former Sainsbury’s CEO Justin King poured scorn on the power of online to disrupt the retail industry last week. But it was apparent that retailers are feeling pressure to digitise the customer experience.

King kicked off proceedings at the annual UK retail technology trade show, RetailEXPO 2019, by taking aim at what he sees as “hype” around the impact of online on the High Street.

 “There isn't necessarily a retail apocalypse… you should at least focus on the reality,” King declared, pointing to intermittent annual store space growth and the still relatively small proportion of UK food sold online.

While King’s “much more bullish” attitude may have allayed retailer concerns over the threat to the High Street that stem from double digit e-commerce channel growth, evidence suggests he is missing the point.

Rather, the overriding message is that retailers are focused wholesale on rapidly building out more digitally enabled and data driven customer-facing propositions to both compete with and complement online.

Daniel Hills, Sainsbury’s digital product owner, told attendees that the grocer had been working on bringing digital closer to physical retail using a transformation programme, but that siloes still exist within the business.

Sainsbury’s used the pilot of its first scan-and-go store to break down siloes, embed more tech-based Agile ways of working into the organisation and bring “the digital and physical together at checkout,” Hills said.

Bringing the digital world in-store

Its SmartShop Scan, Pay & Go app went live last week in Sainsbury's Holborn Circus convenience store, allowing customers to scan and pay for their goods using their mobile devices following trials and a pilot.

At launch, the grocer stated that 82% of transactions in this convenience store were already cashless. Hills added that they therefore wanted to update its existing SmartShop scanning app to bypass the till completely.

“We wanted to get this in front of customers; that was key,” he said. “They told us they wouldn’t just use it to quickly buy one item but would use it for bigger shops if we opened it up to an entire store’s inventory.”

During the trials they found the average basket size exceeded that of shoppers’ using the conventional checkout method. They also found that, while checkout throughput increased, dwell time did too.

“It’s not about pace – getting customers in and out of the door as quickly as possible – it’s about giving them control,” Hills explained. “We found they enjoy being able to browse, knowing there’ll be no queuing.”

Innovation will be key to survival

Martin Wild, chief innovation officer at MediaMarktSaturn, urged delegates to experiment with emerging technologies to bring more digital capability into their retail stores.

“We use four big pillars to classify innovation,” he said. “They are the customer experience, business operations, new business models and an innovation culture. We also use our Retail Tech Hub to share insight.”

Giving examples that were relevant to one or more pillars, he cited the use of Go Instore associate live video consultancy, the use of mobile navigation in-store, and the pilot of mobile scan-and-pay app from MishiPay.

As an electronics retailer, Wild said it was even more important to bring the digital capabilities available to customers online and via mobile into the store. “This is just the beginning,” he added.

It was clear from both the speakers and exhibitors that, in separating the hype from reality, it is imperative retailers practically digitise their store experiences to foster business growth, both off- and online.