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Digital in-store: the operational game changer
September 28, 2020

There is no doubt that digital disruption has fundamentally transformed the retail e-comm landscape, drastically modifying customer shopping behaviors along the way. COVID-19 has reinforced this trend, being widely recognized as an accelerator of digital usages and ways of working. In contrast, traditional grocery brick and mortar stores have remained relatively apart from digital change. In many cases, digital in-store digital technologies at the service of the store stays a collection of costly initiatives with limited impact, including isolated “retail shopping lab” efforts. But US and Asia innovators are getting closer. Amazon is acknowledged as the frictionless store pioneer, Walmart is testing digital in-store technologies @scale and Alibaba already demonstrated the potential of the fusion of offline and online.

However, besides these fast movers, no one has “cracked” digital in-store yet.

The previous examples tell us that digital in-store is today a reality beyond buzz. The future of grocery in-store shopping cannot remain unmoved by the tech revolution. In fact, brick and mortar locations are being reshaped by four tech game changers:

  • New check-out experiences. Mobile, sensors and cloud bring opportunities to enhance the customer perception for THE store touchpoint while optimizing operations. Interesting “light UI/UX” value propositions are emerging everywhere, self check-out systems are more clever than ever to reduce fraud and today’s market displays the ideal conditions to deliver on the scan & go promise.
  • Automated store management. Digital tools, IA and computer vision can help retailers move to smarter, faster and paperless decision making. Today we see an explosion of specialized customer flow tracking start-ups, multiple solutions to digitize store reports and even open source frameworks that can be applied to better forecast the required number of in-store employees.
  • Connected objects. Technology is no longer centralized. A distributed network of connected and smart devices drives productivity up and creates new value propositions for customers. This dimension includes shelf scanning robots, electronic shelf labels with advanced features like geolocation or connected scales that can prevent fraud.
  • Extended store. Like in the traditional “endless aisle” concept, digital can expand the store beyond its walls. Therefore, the store can no longer be conceived as a static fixed physical location but rather as a dynamic network of customers, employees and places, a whole universe of interactions happening in shoppers’ smartphones, in associates’ devices in perfect coordination with what is going on in alternative locations like shopping malls or pop-up shops.

With regard to this overwhelming technological reality, it is of critical importance to avoid turning the store into a collection of expensive tech gadgets. This will make the whole digital in-store experience useless. On the contrary, the real question is how to define an impactful vision for digital at the service of the store, which means focusing on customers and employee’s pain points to identify tech innovations that improve the shopping experience or streamline store processes (and not the other way round, starting with tech innovations and then finding potential usages).

Revolutionizing the PoS: Impossible is nothing

In this context, many traditional grocery retailers are still tied to old visions of the Point of Sale (PoS). Siloed user experiences, far from the rich universe of services being developed with e-commerce. Old fashioned and non ergonomic user interfaces, filled with colorful buttons that are no longer used by store associates. Proprietary, slow to evolve and monolithic software suites. Heavy and costly hardware including full fledged PCs within each cash register, doped with hardware specs that are too high and completed by a bunch of traditional servers in the back-office of the store. And of course a rather basic business logic that does not help store employees in their day to day activities.

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A smarter PoS can be imagined, answering to five major imperatives:

  1. OFF + ON.
  2. Multi-touchpoint.
  3. Agile.
  4. Efficient technologies.
  5. Data-powered.
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1. OFF + ON

It is a reality that grocery brick and mortar stores will not disappear anytime soon. If any, they will be expanded by e-comm and digital in-store initiatives. Actually, digital pure players recently opened physical spots to complete their offering, including “buy online, pick-up in store” services. Therefore, the future PoS not only has its place in the ecosystem but will see its efficiency increase if it is conceived as a lightweight interface, at the same level of e-comm sites, customer mobile apps or voice assistants. All this comes back to enabling an omnichannel architecture to facilitate a seamless navigation between offline and online channels. The usual path to get there involves shifting to microservices and pulling out all functionality not directly related to the PoS typically heavyweight services like promos, customer management or loyaltywhere it should be: In the back-end.

2. Multi-touchpoint

Opportunities to interact with customers are nowadays multiplying in grocery stores, moving from the traditional PoS to queue boosting tablets, clienteling apps to enable new services such as catering, autonomous price checkers or self check-out counters, just to name a few examples. Moreover, the cash desk of tomorrow will be mobile, as it is already the case in many non-food settings.

A new PoS offers a window of opportunity to channel all this innovation taking a broader perspective considering the evolution from a highly specific graphic interface dedicated to traditional cash desk lines to a general-purpose framework that can be deployed, with minor adaptations, across multiple digital touchpoints in the store. To do this, a web-based, “headless” architecture is mandatory, i.e., a light and dynamic visualization technology that can fit any kind of device and that can be customized without a massive effort. This approach also optimizes costs: Today, grocers cannot properly sustain a myriad of specific front-end technologies and apps in the store.

3. Agile

In a world that changes by the hour, in which customer expectations change by the minute, the need for swift software evolutions becomes extremely important. For instance, payment methods are growing by leaps and bounds and very significant efforts are required to integrate them in a legacy PoS. The future PoS needs to be able to implement new capabilities really fast and be flexible enough to absorb complex, market-specific regulations. Hence, avoiding dependance on black-box “roadmaps”, moving away from manual, store-by-store deployments that take months to embrace automated and remote installation, democratizing agile@scale for the PoS and creating DevOpS pipelines with automated build, test and release patterns are some of the must-haves.

4. Efficient technologies

In grocery retail, every dollar counts. This is especially true in times of economic distress, where retailers need to free up cash to sustain pricing advantages. When it comes to the PoS, being efficient means three things. First, there is no reason not to deploy it in the public cloud, grabbing all the agility, scalability and innovation benefits while ensuring a better adaptation to demand and hence lower costs.

Let us say it again: There is no reason not to have the PoS in the cloud. And let us say yet again, but using other words: A smarter PoS is a perfect lever to reduce the footprint of servers in store. Of course, some kind of (extremely) light hardware can be maintained in the edge to ensure resilience and offer a “degraded mode” that keeps the store running in case of network disruption.

Second, the PoS architecture can be largely based on open source components. This is not only about Linux (OS) and Postgre (db) but also about leveraging open standards like JavaPOS for peripheral management. Third, being able to re-use existing peripherals (screen, cash drawer, printers, scanners…) to allow a gradual replacement may be an important lever to limit CapEx needs, since peripherals represent up to 50% of the total cost of ownership a PoS.

5. Data-powered

Multiple use cases can be identified when the PoS becomes intelligent and acts powered by big data and advanced analytics. PoS handle millions of transactions every year. These nuggets of gold, often unexploited, can be mined to identify buyer patterns and preferences. Additionally, transactional data can also be combined with supply chain and sales information to support operational optimization goals like reaching accurate inventory levels in the store.

Finally, grocery retail PoS are typically weak handling Customer Relationship Management (CRM) data, with a poor understanding of customers walking the store and tons on anonymous, unidentified shoppers. To make it happen and become data-ready, the PoS must be connected to the enterprise data lake as the single source of truth. This kind of “data-centric” architecture invigorates the PoS with algorithms that may have been developed already for other channels like e-comm, thus avoiding to reinvent the wheel. Conversely, retailers much resist the temptation to embed specific data management layers into the PoS itself, and keep it as simple as possible leaving processing capabilities, once again, in the back-end.

These design principles may be implemented in a number of different ways:

  • Modern retail ERP suites are emerging. These solutions can be 100% deployed as a SaaS while being fast to evolve thanks to their strong modularity. They also adapt to a variety of front-end situations leveraging html5 and javascript. Are these innovative, young solutions appropriate for multinational retailers with a global footprint?
  • Large PoS software powerhouses are adapting their suites at an accelerated pace to include concepts like omnichannel or big data. Will they be fast enough?
  • Some large scale retailers are betting to build their own PoS. While this approach is somewhat risky, requiring significant investment and time, it makes it possible to fully customize the PoS experience and move to the next level when it comes to speed of development. Can grocery players develop sufficient PoS in-house know-how to make it happen?

No matter what the approach is, PoS evolution can be a strong contributor to tech modernization, adopting more efficient, cybersecure and resilient architectures. However, “tech for tech” evolution is pointless: a brand-new PoS must also bring tangible business benefits.

Some of these may include:

  • Better customer experience. Clearer visualization of products, prices and promos, onsite access to loyalty program benefits, new services like digital invoices and receipts or reduced the waiting time in the line are some illustrations of how a modern PoS can enhance the act of shopping for customers.
  • Improved cashier lives and enhanced productivity. This includes finding solutions to day-to-day constraints like easing recognition of unknown items, reducing price errors, accelerating closing processes or speeding up training of store associates with a clearer and simpler layout.
  • Personalization. Wouldn’t it be nice to greet every customer by his / her name at the cash desk?
  • Ability to collect customer data such as phone numbers or e-mail addresses.
  • Better connection to e-comm journeys. Completing classic click and collect with more advanced experiences like finalizing online orders in the store.
  • Capturing customer feedback in a structured way and measuring Net Promoter Score (NPS) in the store.

Similarly to what happened with e-comm a few years ago, digitization, or digital in-store, is now becoming really relevant to the store. Retailers must put it on the top of the agenda, but also avoid being distracted by bells and whistles in the process. Addressing the PoS, full of hardware, peripherals and back-end connections can be scary. However, it is a must for grocers that want to take back the control of their destiny and that strive to improve customer experience in the store bringing agility to in-store operations.

Do not hesitate to check the other articles related to in-store operations here.

About the Author

Carrefour Global CTO Miguel's obsession is to put tech at the service of customers. He is an international entrepreneur with a genuine passion for hardcore tech!

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