Ian Cairns, enterprise sales director at TalkTalk Business, explores the opportunities and challenges that Artificial intelligence (AI) and other emerging technologies bring to the retail sector.
Artificial intelligence (AI) is the latest innovation that looks set to reshape retail. It’s already being introduced into new technologies, processes, and marketing techniques. It’s inevitably led many to revisit digital transformation, asking the question of how they can embrace new automation methods and tools to improve how they operate, keep product costs down, all whilst enhancing the customer experience.
The possibilities seem endless. For example, new AI technologies could go as far as to give personalised greetings when customers walk in the store, share offers to their phones when they walk in, or give directions to products.
But, it sparks the greater debate on how far should this new technology go? As it turns out, it’s a hotly contested debate within retail companies, particularly between IT decision makers (ITDMs) and frontline employees.
Early influence of AI on the in-store experience
There are several examples already of AI in action, such as till-free retail. The concept of a store that is not run and monitored by people is one that is relatively new to the UK. However, in places like China and South-Korea, till-free stores are rising in popularity. Based on research carried out by consultancy firm RBR and published by Don’t Be Shy and TalkTalk Business, RBR predicts there could be 12,000 till-free stores globally by 2027, a huge increase from the just over 250 till-free stores in 2021.
In the UK, we have seen Amazon lead the way for till-free stores, opening 18 stores across the country since 2021. The same research indicates ‘just walk out’ technology that allows customers to enter the store, grab what they need, and leave without having to physically stop and pay, trialled by Amazon is being licensed to its third parties such as Sainsburys, WHSmith’s and Starbucks which is set to expand the use of AI and automation across the UK retail market.
Supermarket giant Tesco has shown it’s possible, its High Holborn store is the first without tills or self-checkouts. Customers can leave with whatever they want, as a system of cameras and weighted shelves determine what has been bought, and receipts are sent to customers’ phones later on. It’s an exciting leap forward, but to work consistently and seamlessly it’s got to be underpinned by a reliable and, ideally, purpose-built connectivity network.
Reactions to till-free shopping
Whilst exciting, the reaction to the introduction of checkout free tills has divided retail employees and ITDMs. Although till-free shopping would reduce queues, frontline employees believe that there are risks associated with implementing smart technology such as the potential for cybercriminals and thieves to circumvent the system.
The convenience of till free shopping is likely to widely appeal to busy shoppers and it will be interesting to see how big the appetite is in the UK for shopping without scanning. To introduce till-free shopping successfully, retailers will need to ensure that the technology is built with safety, security, and reliability in mind. This means it is about much more than installing a basic wireless router in the corner of the store, but working closely with a network provider that can work with you to design a network built to requirements, and gives you peace of mind.
How technology can upgrade the in-store experience
Brick-and-mortar retail is under pressure to provide new, immersive experiences to its customers to maintain footfall and customer loyalty. New technology – beyond just AI – is already underpinning new retail experiments.
Geofencing is a great example of this in action. It uses GPS or radio frequency identification (RFID) technology to create a virtual geographic boundary which enables software to trigger a response when a mobile device enters or leaves a particular area. The technology relies on wireless beacons, GPS and Bluetooth data from customers phones. Geofencing can send targeted messages to customers when they walk past a store, drawing people in to shop by sharing offers and directions to products through messages sent to the customers phones.
Frontline workers are still sceptical about how smart technologies will impact the personal elements of shopping, like being greeted by an employee at the door. They believe human interactions that in-store shopping experiences offer can’t be replaced by technology. However, 85% of ITDMs believe that retail customers would enjoy being electronically greeted by name when entering a store, but only 12% of frontline workers agree.
Augmented reality (AR) is also personalising the shopper experience. In 2021, H&M in Germany launched its first virtual fitting rooms, where customers are given an on-app virtual avatar with exact body measurements helping help to virtually ‘try on’ clothes.
The rapid development of technological possibilities in retail offers exciting opportunities for the retail sector in the UK but is not without challenges. Ensuring that the technology can work effectively in a retail setting relies on fast, reliable and secure network connectivity, which is why retailers must be certain that their network can support the innovation that AI and other new tech can bring. Particularly for those with a larger footprint, that means working collaboratively with a network provider that will create a solution tailored to their needs.
That means going beyond just high speed connectivity, and considering how to integrate the use of cameras and sensors, together with the network, as part of a holistic solution which can support the introduction of new technologies and automation.
So what does the future hold for AI and automation in the retail sector?
Careful experimentation and bringing in the right stakeholders will be key to the introduction of AI and automation in stores. It can be easy to get carried away with the possibilities that new, innovative technologies offers, and it’s important to implement new technologies properly.
Correct implementation is critical to keep all stakeholders on board, from the frontline workers, who are on the ground and most exposed to customers day-to-day, through to suppliers that will underpin delivery of this next generation technologies, processes, and marketing techniques.
