Retail developments: bricks-and-mortar stores still alive and kicking!

Business Development & Strategy Director
Valtech France

May 31, 2017

E-retailers are booming. Orders for Amazon, Alibaba and India-based Flipkart flood in, when they are not raising investment funds for astronomical amounts. The massive interest says a lot about how much this retail method that makes shopping and rapid delivery so easy has come to dominate worldwide. So, is this the end of bricks-and-mortar shopping? While taking this new shopping channel on board has not always been easy, the direction of travel is now underway. And the strategy to transform physical stores is underpinned by latest tech. 100% smart stores have been emerging for a while now. This brings guaranteed success for businesses who can give customers brand new experiences.

The key to the grocer’s store is a smartphone

Wheelys, a Swedish start-up, has launched a brand new local grocery store in Shanghai, where locals have been able to buy sandwiches, hot beverages and chocolate round the clock for a few weeks now. A new city mini-market for night-owls? Not really. There are no cashiers at all, which makes a huge difference. Not automatic tills either, strange. Unusual. And don’t bother looking around for a security guard!

All the customer needs fits in a pocket. A smartphone with a downloadable app will open the door. The same app will scan goods that customers want to buy. The recorded bank details on the app will then make payment as necessary.

Following Amazon Go, which has been providing the same principal in Seattle since 2016, mobile generation people have at last got the store they have been looking for. And we believe it’s just the beginning.

The issue of shopping experience

To attract people into the store, plunging customers into the company’s own world is vital. Adidas is an excellent example of this. The 3-stripes brand opened one of its biggest flagship stores in the world on the famous 5th Avenue.

The experience starts immediately as customers enter the shop. They go through a tunnel like football players do when they run onto a football pitch on match nights. Once inside, the electric sports competition atmosphere dominates: tills look like ticket machines; the changing room is like a real sports changing room. Customers can take a break in the stands and even enjoy snacks. That’s the decor!

Now, let’s go up to the second floor to try some sneakers on. Pop on a pair and run a few meters along the specially-provided race track with a difference. Captors are added to the trainers to analyze strides and offer potential buyers footwear which best matches them. Then customers just wander over to the customization stand to add a few personal touches! In addition customers need not worry about any other shopping; the concierge service can deliver shopping the same day to customers’ hotels.

An algorithm that cuts prices

We all know how Yield Management works when booking a plane flight. Flexible pricing based on supply and demand have been applied by airlines for decades. However, flexible pricing has never been applied in the retail trade before! Imagotag, the French electronic shelf-labelling specialist, has teamed up with Market Hub to develop an algorithm which will make supermarket fruit and vegetable prices go up and down.

The pricing takes a wide range of data into account. Daily weather forecast, how often customers use the shop, product sales history all help to make sales outlets more attractive to customers. When the algorithm identifies an excess of perishable stock, prices labels immediately post lower prices. The solution helps to optimize store logistics while providing a competitive advantage with customers.

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