The tide is rising for smart retail. Are you ready for it?

From galloping inflation to pandemic precautions to a generational trend toward shopping from home, the retail landscape has witnessed dramatic shifts since 2020. Yet the forecast is far from bleak for traditional retail establishments.

Connectivity, Big Data and smartphone-centric lifestyles have created new opportunities for value and growth. While these developments are often associated with the e-commerce space, they are also positively redefining physical stores, too. This is known as “smart retail,” a fast-growing technology-focused approach to store management. In smart retail, the hybridization of lessons learned from e-commerce are brought into walk-in businesses, creating an overall shopping experience that is more immersive – and more convenient.

Smart retail relies on shoppers using their mobile devices in a myriad of ways to make the most of their buying experience. Forward-thinking store owners understand this places a high demand on available bandwidth and requires a well-thought-out connectivity strategy to attract and engage tech-savvy customers.

With the right approach, smart retail technology can improve everything from the shopping experience itself to the way purchases are processed and reward programs are administered and managed. Today’s experienced smart retailer knows a seamless online shopping journey can transform curious browsers into happy buyers.

Smart Retail uptake trends

As smart retail moves from acceptance to expectation among more would-be buyers, stores are recognizing opportunities not only to competitively differentiate themselves but to carve out a unique brand identity that connects with more people.

Many of us are familiar with automated check-out stands at supermarkets, a fairly impersonal, data-driven technology that continues to be refined. Smart retail employs a warmer, more holistic design. It is a hybrid approach, marrying lessons learned from the ongoing e-commerce revolution to the personal connection many shoppers still want while making purchases.

Retail sales continue to drive economic growth worldwide; 2021 was the year bricks-and-mortar retail made a comeback. In-store sales rebounded, registering an overall sales increase of 8.2%: “The bounce back of in-store retail over the last year is a testament to its resiliency, signaling that e-commerce’s rise to dominance will take longer than expected.”

People still want to come to stores; the critical question then becomes what compels them to buy once they are inside?

Smart retail offers many ways of seizing the initiative by stimulating both marketing opportunities and shoppers’ imaginations. With the help of dedicated, high-performance connection services like Dedicated Fiber Internet (DFI) or managed services to facilitate data-heavy information transfers and speed of use like Managed SD-WAN, smart retailers can leverage the latest technology to better serve their existing customers as well as attract new ones.

Advantages of Smart Retail

Innovations like cashier-free checkouts, smart kiosks, smart screens and roving point-of-sale systems reduce floor area needed for sales, allowing for a less crowded experience. Powered by the Internet of Things, the ability to minimize space and time needed to conduct transactions presents a potential windfall for smaller retailers, too. “Using a combination of camera, apps and point-of-sale systems, customers are able to go to the checkout to complete their purchases without any human assistance.” 

Beyond these more practical applications of smart retail are bigger plays. The profusion of Big Data creates personalization opportunities that go far beyond any storeowner’s ability to know and engage with their customers.

At arrival, a customer with specific shopping habits might be notified of special offers via mobile device as soon as they enter the store. This might be a new book by a favorite author, or a frequently-purchased type of flower that is back in season. In this way, the store visitor is prompted to feel more of an attachment to the store, while the store owner gets the benefit of an additional incentivizing tool.

Smart retail can inform deeper selling strategies, too, with the help of metrics and Big Data, among other tools. Employing store-friendly smartphone apps, shoppers can be tracked through stores to monitor everything from what parts of the store attracted them most to how long they waited in line. Ultimately, it can establish a behavioral profile of their buying and browsing habits for later marketing use.

Click-and-collect is another smart retail play pioneered by supermarkets which saw broader applications during 2020 and 2021, allowing shoppers to make their selections from home. Safety remains important to shoppers, but it turns out they really like the convenience, too.

Forbes notes this opportunity is not without challenge: “Enabling this experience requires an up-to-date e-commerce website that’s optimized for mobile. Furthermore, retailers will need to achieve seamless integration between their online shopping platforms and on-the-ground operations.”

Types of Smart Retail

Enabling experiential retail can give shoppers a better sense of what they buy – and spur a decision to spend. For example, shoppers can be given the opportunity to try on clothes virtually, without needing a changing room or touching the item itself. A virtual reality kiosk might give people the experience of driving a luxury car or speedboat, enhancing their buying experience and incentivizing a decision to purchase.

The use of artificial intelligence (AI) and machine learning (ML) tools are adding layers of instantaneous refinement to retail operations. Not only can these tools calculate merchandise demand spikes and inventory needs based on fine-tuned algorithmic analysis; they can also pinpoint which products attract the most attention by capturing buyer browsing data. This in turn can help better determine which items get prime store display.

AI can provide price optimization strategies and even facilitate dynamic pricing, a way for retailers to move merchandise by motivating purchases with attractive offers tailored to specific customers. Products can be automatically discounted to those customers who show a higher level of interest in buying, especially when there is a surplus to be cleared.

Loyalty programs have been a part of retail for generations; smart retail boosts this motivation channel with loyalty apps that reward regular customers with discounts and specials. “Loyalty programs should not be overlooked by retailers – according to Hubspot, they have a 60-70% chance of selling to an existing customer, while the probability of selling to a new prospect is only 5-20%.”

How to start Smart Retail right

Having the right infrastructure capacity to facilitate the connectivity demands of smart retail technology is critical to any retail establishment. As hybrid shopping becomes more prevalent, store owners who invest in capacity stand to benefit from rising consumer expectations – and the willingness to reward stores that satisfy them.

Finally, no infrastructure plan is complete without careful consideration of the cybersecurity needs of a smart retail establishment. Too many criminals see big opportunities in smart retail, too, with its profusion of valuable credit card and other personal data ripe for being plucked from thin air.

Being careful with customer data is a needful step for all storeowners, and one that can be done in concert with a broader smart retail implementation. Incorporating advanced security tools to guard your store’s network against data breaches, whether it be a holistic solution like Enterprise Network Edge or a more focused Unified Threat Management (UTM) platform like Managed Security Service, translates into needful peace of mind for store owners and their customers.

How can your enterprise take advantage of opportunities inherent in smart retail? Learn how to exceed your business goals today and tomorrow with Spectrum Enterprise solutions.