Why Retail Tech Isn’t Just About User Experience

Michael Gabay

Chief Executive Officer

23 August 2021

Retailers looking to embark on digital transformations have long faced significant obstacles. Some are tech-related issues, such as a reluctance to retire legacy applications, but the real challenges go much deeper. Corporate culture, change management and politics all play significant roles. So, too, do changing demographics, labor fluctuations and global food insecurity.

Much of the conversation about retail automation centers on the user or customer experience — and for a good reason. Automated solutions in banking, travel and entertainment have made life easier for millions of people worldwide. My travels and conversations with leading retailers, though, have taught me that there’s far more that goes into adopting a seamless checkout technology. The lessons learned are both eye-opening and encouraging.

Why Grocery Store Automation Isn’t Just About User Experience

Many industries have gone through digital transformation. Banking, finance, health tech and knowledge management have all adopted automation to remove friction and make their processes more efficient. For years, we’ve been able to withdraw money from ATMs, pay bills, rent movies and book flights without ever interacting with a human. So, automation isn’t new. But it is evolving.

For retailers, automation has been a slower transition. The pandemic, of course, has been a significant driver in retailers building adaptable business models, but there are other drivers behind the current demand for automation, particularly in grocery stores.

Global Food Deserts

Geographic areas where access to affordable, healthy food options like fresh fruits and veggies are limited or non-existent, food deserts are a growing problem, particularly for people in rural and remote environments. People who live in food deserts also have difficulty finding foods that meet their dietary restrictions or are culturally relevant.

In Germany, it’s considered inefficient and costly to build grocery stores in rural areas. People must either drive long distances to get what they need in one trip or make multiple stops at convenience stores and sporadic produce stands. Self and seamless checkout options are an appealing solution in both countries, as retailers don’t need to worry about managing a full staff. They can simply open a supermarket in these underserved neighborhoods, providing not only a remedy for the food desert problem but also encouraging better eating habits.

Demographics And Changes In Population

Japan is a terrific example of what happens when an aging populationshrinking birth rate and labor shortage unite to prompt change such as automation. Unlike China, where labor is plentiful, labor shortages in Japan often force businesses to cut operating hours, denying citizens access to the culture of convenience they expect. The country’s ubiquitous convenience stores or conbinis are integral to a busy population’s lifestyle and are much more than a place where people come to buy practical necessities.

Fresh food is abundant in Japanese conbinis, as are extensive drink sections, banking centers and other services like free Wi-Fi. Seamless automated checkout services are ideal for meeting people’s demand for 24/7 convenience despite the lack of a ready labor force.

Cultural And Religious Rationales

Food is a deeply cultural thing. Many people and religions around the world incorporate specific foods into their diets, rituals and celebrations. For instance, Jewish dietary law or kashrut forbids many foods or requires specialized production. Islam has halal (permitted foods) and haram (prohibited foods), and Hindu traditions require eating a diet that keeps the body balanced.

Poland is a good example of how automation can help retailers adapt to cultural, legal and religious needs and still remain profitable. In 2018, Poland passed a law banning all Sunday trading, and retailers faced the loss of substantial revenue. When the ban began in 2019, 37 Sundays were affected; by 2021, that number will reach 45. While e-commerce appears to be a big winner in the Sunday ban, shopping centers are suffering steep declines in their visitor numbers. Essentially, the store owner is the only person who can work in the store on a Sunday, and with seamless checkout, this is feasible.

Supermarkets and other retailers are adopting self-checkout and other automated, cashier-less solutions to enable shoppers to get what they need while still abiding by the law. Shopping is facilitated by mobile apps and data verification systems that protect stores against theft and damage while making it easy for people to shop where and when they like, even on a Sunday.

Accelerated Adoption Of Automated Checkout

Experts agree it won’t be long before automated checkout is everywhere. And while user or customer experience remains at the forefront of many retailers’ minds, practical observation tells us it’s also critical to consider other human factors, as discussed here. Yes, grocery store automation makes it convenient for shoppers to walk in, choose their items and simply walk out without needing to go through checkout. But it also makes it easier to meet cultural, religious and dietary needs.

Digitizing retail, specifically grocery stores, is a complicated process. There are thousands of constantly changing produce items, changing environmental conditions and endless permutations of human interactions. All these factors must work simultaneously and seamlessly in real time for an autonomous grocery store system to work. Here are a few best practices you can follow when deciding to invest in retail automation:

1. Consider your shoppers’ demographics. Go beyond age, gender, race and income and think about things like multi-generational, child-free and single-person households. Ethnic and cultural preferences matter, too.

2. Location, location, location. Do you want to begin in high-traffic cities or less-populated areas like rural neighborhoods? While densely-populated areas see more walk-in traffic and a higher volume of customers, starting out in less hectic locations can help drive change in areas lacking stores.

3. Identify what’s motivating you. Geography, demographics and even regulations are all considered motivations for adopting new technologies. Digitalization and exceptional customer experiences certainly matter, but be sure to put people at the center of any automation decisions you make.

There’s little doubt technology can and will be successfully integrated into retail environments — and that starting with a positive user experience is the foundation for everything that follows.