Insights

Why In-Store Technology Is Now a Necessity for Brick-and-Mortar Retailers

By Eliahu Sussman

March 6, 2018

In a rapidly moving, digital-first world, retailers are using in-store technology to implement efficient, frictionless shopping experiences.

Walmart recently unveiled a new iteration of its Scan & Go app, giving shoppers a number of useful in-store digital tools to work with, as well as the promise of bypassing long wait times at checkout lines. Customers can use the app to scan items, bag them and pay with just a few taps on their phone.

Kroger’s Scan, Bag, Go app offers a similar experience, except it requires customers to pay at a self-checkout station.

And of course, Amazon Go, the much-hyped prototype for a brick-and-mortar grocery store entirely without checkout lines, takes the convenience factor a step further.

While tools like these have been in development for over a decade, that so many retailers are expanding pilot programs—and heavily promoting them—indicates a consensus belief that customers might finally be ready for retail technology-enhanced shopping experiences delivered through apps and in-aisle devices that range from mobile scanners to customer-facing kiosks.

Inside Walmart’s app experience

Leading the charge away from checkout lines, Walmart has expanded its Scan & Go program to more than 100 stores nationwide. After downloading the app and inputting payment information, customers scan items—including produce—while they shop, click a button when they’re done, and exit through the Mobile Express lane. Payments are processed through the app, so there’s no waiting necessary. (At some stores, the retailer is also offering Scan & Go kiosks where customers can use the app on handheld devices.) The app also allows customers to create shopping lists, access stock availability and product location, down to the aisle and location on the shelf at a particular store.  

The wider rollout of Walmart’s Scan & Go and Kroger’s Scan, Bag, Go—which is expanding to 400 stores this year—reflects a broader trend in retailers’ focus on both improving the customer experience and retaining customers by bringing the best features from e-commerce—ease of use, pinpoint personalization and brand loyalty—to the physical store.

Mobile in-store technology revitalizes stores

It’s no longer doom-and-gloom for physical retailers. While the closing of stores big and small have dominated the headlines, traditional retail has a vibrant future: 83 percent of goods purchased globally in 2022 will still be bought in a store, according to a recent Euromonitor International study. That being said, consumers now expect retailers to offer at least the same benefits of online shopping in their brick-and-mortar stores.

Customers are used to one-click shopping online, so technologies like Scan & Go enable brick-and-mortar retailers to compete. Shoppers have become familiar with transacting through a single e-commerce platform, which means that retailers need to offer significant value in order to gain adoption of brand-specific shopping apps. And consumers want personalization, so an Amazon-like mobile shopping experience, featuring product recommendations based on a customer’s previous purchases, is a likely next step for retail apps and in-store technology solutions.

Older shoppers want digital, too

While millennials are certainly increasingly responsible for shaping consumer trends, they aren’t alone in forcing a shift into a more tech-enabled future.

According to Pew Research, 74% of adults between 50 and 64 own smartphones, and nearly half (42%) of adults over the age of 65 own smartphones. Another survey, conducted by the International Council of Shopping Centers, found that 71% of consumers have one or more retailer apps on their phones. Older tech-enabled consumers are a demographic that is driving sales, and apps are a great way to boost loyalty: more than 60% of Generation X and Baby Boomers who have a retailer app access it weekly.

There are challenges, though. Hurdles to adoption include convincing consumers to download a retailers app and teaching them how to use it. In addition, online tools can contribute to shopping cart abandonment, and streamlined checkout options can be prone to shrink, exacerbating the need for enhanced loss prevention strategies.

Retailers may still be in the early stages of optimizing digital experiences for their brick-and-mortar customers, but it’s clear which way the wind is blowing. Major players like Walmart and Kroger are leading the way, which is a broader market indicator that in-store digital tools that improve the customer experience are no longer optional.

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