Top trends shaping convenience, according to technology experts
AI, frictionless payment and robotics all have a role to play.
Don Longo, editorial director, Convenience Store News (U.S.)
NEW YORK — As we proceed through the early months of 2022, Convenience Store News (CSNC's U.S.-based sister publication) interviewed some of the major technology companies in the industry to find out what key trends they expect to affect convenience retailing in the year ahead.
Frictionless checkout continues to be a focal point among both retailers and suppliers. "Anything you can do to take friction out of the experience is valuable," said Jeff Bradbury, senior marketing director for Hughes Network Systems.
There are several different types of frictionless technology in use by retailers today. The Amazon Go model uses a phone app in conjunction with cameras and shelf sensors. Other solutions utilize RFID tags, some of which allow the customer to preorder on their phone either in-store or before entering the store. What type is "right" depends upon the particular retailer.
"Whatever way they choose, it should be a reflection of the brand," Bradbury said. "Amazon's solution is very elegant. 7-Eleven's is simple and direct. Each is equally relevant to that particular brand's customer-facing experience."
Brands are taking on technology so that it appropriately reflects the brand's promise. "You're going to see more digital capabilities presented in ways that reinforce the brand's premise," the Hughes executive noted.
Speaking about the recent NRF Show, held in January, Bradbury said he was impressed with the amount of robotics on display. "There were at least 10 full demos of robotics in action and several more exhibitors than I recall seeing in the past," he said. "The sheer volume on display reflects the market recognition that robotic automation for fulfillment and other retail uses is going to grow very, very quickly in the near future."
The implications are huge for retailers as robotics promise to improve timeliness of delivery, offer flexibility, and reduce costs. Labour will be able to be redeployed to other more customer-facing uses.
The other technology trend that could be very important to c-stores is micro-fulfillment centres. "Robotic automation and micro-fulfillment are very powerful technology solutions for c-stores," Bradbury stated.
Of course, a store needs a digital infrastructure that can support all this technology. "Retailers want near-perfect inventory visibility, an order process that works efficiently, in-store capabilities, and a fulfillment engine," he explained.
The store's digital infrastructure needs to support onsite processing, automation for robotics, cloud information sharing, and e-commerce systems to track orders, third-party delivery vendors, and onsite for curbside operations.
"You can't build a mansion on a crumbling foundation," Bradbury pointed out.
Change in the checkout world
David Wilkinson, president and general manager of NCR Retail, told CSNews that the current labor crisis is accelerating change in the world of checkouts.
"Every 1% shift to self-checkout is $1 million in labour expense that could go back into the store for other purposes," he said.
NCR is No. 1 in installed self-checkout globally, according to Wilkenson. Retailers have reported up to a 90% customer adoption rate for self-checkout, according to NCR stats. Retailers can reduce their labor by 20-30%, yielding millions in cost savings when self-checkout usage exceeds 80% of customers.
The world is quickly giving the choice to the customer. "I think soon, it won't matter what type of checkout you have. It will be whatever the customer chooses. Self-checkout, mobile or app-enabled in your car," said Wilkinson.
In fact, the other big retail area that he says will be changed by technology is payments — specifically, cryptocurrency. He pointed to NCR's recent purchase of LibertyX, a cryptocurrency software provider. This acquisition accelerates NCR's ability to rapidly deliver a complete digital currency solution to its customers, including the ability to buy and sell cryptocurrency, conduct cross-border remittance, and accept digital currency payments across digital and physical channels.
The LibertyX digital currency solution runs on ATMs, kiosks and point-of-sale systems today. LibertyX partners with ATM operators, such as NCR's Cardtronics, which owns and manages the ATMs and the Allpoint network in the United States at locations like convenience stores, pharmacies and supermarkets.
Moving forward, NCR will utilize its Pay360 platform to offer the LibertyX capabilities as part of its solutions for banks, retailers and restaurants. NCR Pay360 provides financial institutions a secure way to enable cash-in and cash-out transactions from their mobile banking app, website, or even customer service centres.
"For young people in particular, bitcoin is just becoming another form of payment," said Wilkinson. "As we become an ever-more-digital economy, we are creating some very creative opportunities for us with new services for consumers and retailers."
Addressing supply chain challenges
Retailer-supplier collaboration, especially around supply chain challenges, is one of the most important trends in retail technology today, according to Patrick O'Mara, senior solution principal at RELEX Solutions.
Earlier this year, the provider of unified retail planning solutions partnered with Sheetz Inc. to help the large Mid-Atlantic convenience store chain position itself for store growth, supply chain growth, and dynamic product marketing opportunities.
One of the goals of the partnership is to enable Sheetz to unify aspects of its demand planning processes to ensure an efficient flow of products from suppliers to its stores. Sheetz sought a reliable solution with advanced functionality that could support demand planning across its supply chain network within a single system, according to O'Mara.
"By partnering with RELEX, our corporate demand planners have the ability to improve processes that support our distribution and inventory management strategies," Bill Ruggles, director of procurement for Sheetz, said in a statement. "RELEX will ultimately help ensure Sheetz customers have what they want, when they want it, 24/7/365."
O'Mara also cited RELEX's relationship with Kum & Go LC, the Des Moines, Iowa-based chain, as an example of the push by c-stores to maximize their store assortments.
"You're going to see greater supplier-retailer collaboration in the next few years using planograms as a base and then maximizing them for a more localized assortment by store," he said. "Store-specific planning is an important part of the future."
Navigating the labour shortage
Labour and the supply chain are the two biggest issues facing retailers today, said Suresh Menon, senior vice president and general manager for Zebra Technologies.
"Our mission is to enable our customers to ensure that every asset and every worker is visible, connected and optimized," he noted, pointing to the company's task management capabilities, mobile handheld communications, labour schedule forecasting and business solutions as key technologies aimed at addressing these challenges.
"The labour shortage is going to be here for a while. The expectations of new entrants to the workforce are changing. Things like employee engagement apps can help. Employees can take control of their own schedule," Menon said.
Additional features like gamification can make it fun for employees to stay engaged and track their own compliance with certain work tasks, he added.
Artificial intelligence (AI) is also one of the biggest technology trends to watch at retail, according to Menon. With Reflexis and Antuit.ai, Zebra is bringing together a common platform using AI for use by everyone from inventory to workforce management. Retailers will have the ability to not just accurately predict demand, but also shape demand, such as recommending promotion strategies to drive sales, he said.