This is a very interesting question. It would be great to roll out this concept to all stores nationally. I think the challenge may be twofold. First is the perception of the 7-Eleven shopping experience, at least in the locations I know about here in the Chicago area. I can only speak for myself but there needs to be a strong customer communications strategy that accompanies any store changes, otherwise I think the concept will be challenged. For better or worse, my local 7-Elevens are not associated with the concept elements. Second, franchisees will need be supported if they are to invest in the necessary changes to execute the concept. To that end, the demand plan I mention needs to be very strong, very local. So for example, assuming it is possible, use the 7-Rewards program as the basis to help franchisees market the new concept in their local area. Maybe empower franchisees to develop their own digital relationships with the local customer base. In terms of what data to leverage from the test stores, it would be good to understand the characteristics of customers and compare them to the data on loyal customers in regular stores – to prioritize the rollout and investment strategy.
I don't think it's a smart game at all. Not only does Amazon have a lead, but I associate Prime much more with media than e-commerce. Walmart tried to match this by buying Vudu 10 years ago but recently it was said they were looking to sell the service to NBC. Here's a wacky idea: Amazon may own e-commerce forever (and the A to Z), and Walmart will always be a distant second. Even so, lots of money will be made and Walmart will still dominate the brick-and-mortar space. Amazon's theme business-wise seems to be to make it easy to do everything you need without leaving your home - music, movies, detergent, food, etc. That will never be Walmart's strength. It's also not healthy. Walmart might instead invest less in matching Prime move for move, and think about things like subscription transportation services, self-driving cars - you get it - things that are typically really expensive, but that fit with Walmart's low cost mantra and help more easily connect customers to a physical buying experience and general independence from the home. Walmart is already doing this a bit, but with an eye on robotic delivery for online orders. Even if this idea is not exactly right, the gist I think makes a lot of sense.
At Oracle four years ago we developed and came to market with the “retail store of the future” that purported just this -- replicate to the extent it adds value the elements of a high quality online/e-commerce experience to win with consumers. Beacons interacting with smartphones to deliver personalized offers, interactive mirrors to show alternate colors or sizes, sensors on shelves monitoring stock and position, dynamic signs and pricing, clienteling so associates can personally address a customer, cameras capturing and interpreting shopper movements, and more. These and more are all good ideas, require data, analytics and sometimes AI/Machine Learning. The question retailers must ask themselves first is what really matters to their customers, and they must tailor experiences to this. Leading with interesting technology use cases is not a recipe for success. To land on what makes sense you need the ability to test ideas, incubate ones that show potential and be able to scale the rollout. The investment this requires can be prohibitive for most retailers (save for those like Walmart and Kroger) so they should invest heavily upfront on their customer insights capability to place bets with more confidence.
This is just my opinion of course, but I suspect that this technology capability will soon be commercially available to grocery businesses everywhere. Like the post says, reducing or removing checkout friction is a key initiative across the industry. What Amazon gets by being there first is that first mover advantage that they can exploit with their CUSTOMER DATA. They establish a reputation for doing it best with a decent assortment, integration with their online business and Prime, and can tailor every element of the CX based on their rich customer insights. The stores will probably become an advertising channel for brands as well that is easily incorporated given the sunk tech costs of equipping the stores. What I suspect Amazon loves is how everyone is focused on the cashier-less checkout store, versus the actual strategy playing out. It's a great distraction.
I find it hard to believe that "43 percent of retail respondents believe their employees are prepared for AI adoption." I'm not sure many people understand what AI is, represents or the adoption challenges. There is a lot of focus on the use cases (chatbots, robots, self service checkout), as opposed to developing AI as a competency, a muscle to be developed and maintained. As more companies adopt point solutions around specific use cases, any efficiency or effectiveness gains becomes table stakes. Which, in effect, nullifies the ultimate value to be attained through an executive-led initiative to become data driven and prioritize analytics as a core competency. Of which AI is a component.
This is the perfect subject for me, as I have a lot of experience with this at my local area Albertsons banner Jewel.
Here has been my experience: with a relatively small basket size of items that are easily scanned (versus requiring identification through screen prompts or weighing, like produce), this is very fast and convenient. I tend to shop at rather busy times with even the under 15 items line often being long. You do need to listen to the voice prompts. If you do not place an item after scanning onto a weight-sensitive table, your scanning deactivates until an associate comes by to reset it. So for larger items - toiletries, beverages, etc. - you cannot scan and place the item directly into your cart - unless you intervene in the process and tell the system.
The bottom line is that with experience, you get much more efficient and effective. I'd say given the waste of time it is to wait in line, even if a consumer has a relatively poor experience the first time with self-checkout, I expect many to embrace this service on successive trips. Today even with larger baskets with fruits and vegetables I self-scan - I understand the system now very well, and every time I've saved maybe 10-15 minutes which for me is important and adds up.
The next iteration of this technology that will not require removing products from your shopping cart will make this even better. Technology is only going to improve. As to job loss, it's a fact that the cashier is a position that will no longer exist. However, there will still be a need for staff in the store just as there is today. So there may be net job loss, but that's a reality for many industries facing cost pressure and automation opportunities.
When you think about a typical convenience store shopping mission, this is brilliant. Last minute, unplanned, and on the go probably describes the common consumer need. Convenience is defined as "the state of being able to proceed with something with little effort or difficulty." This all being the case, and competition for walletshare only intensifying, removing as much friction and speeding the buying process is arguably imperative:
"Shopping in the new cashierless 7-Eleven store is simple. To test the store, employees download an app, sign up, check in at the store, enter the store, shop and exit. A detailed receipt appears in the app automatically after the customer exits."
Of course collecting the data for understanding consumer behavior helps tailor other elements of the CX, but the focus here is most clearly on meeting a high value unmet customer needs IMO.
This use case is a great example of why retailers struggle with almost anything data or analytics related. Most retailers lack an overarching vision and a use case road map for how analytics supports the business. Progressive retailers recognize this and are able to self fund more complex use cases by taking a crawl, walk, run approach to improving their analytics maturity. There is no doubt that "consumer insights" is an analytics use case, but if it renders in isolation with a high cost and an uncertain payback, it's never going to happen. Test/learn and risk is inherent in any analytics use case. So you need to be confident and have a track record of success to a certain degree before you chew off use cases like this one.
This is not a new idea. Several years ago this was a common conversation topic when I worked at Oracle, and I believe some such as Walmart (big MSFT partner) and Kroger have already moved on these opportunities. If you attract a huge online audience then yes, this is great! Monetize your data, sell access and insights to suppliers as part of the overall trade relationship. It can be a win/win - so long as the advertising is relevant and not distracting or damaging to the CX. But I agree with Nikki Baird in the first comment of this discussion. Not all retailers are able to attract a large enough audience to be an ad platform that suppliers can prioritize in terms of their ad spend. In the end, of course, Mr. Nadella is making a business case to have Azure be the platform for all of this (that was the idea at Oracle too) so it's both self serving and a bit true IMO.
I don't know if the advantage is "sizable," however it's clear that there is a large segment of shoppers to whom this sort of CX, when executed well, really appeals. That is the key takeaway IMO here. Being a shopper myself, when you procrastinate and experience at least a few delayed online purchase deliveries, the idea of getting in the car and picking up the merch you bought online becomes really appealing.
Retailers have a lot of incentive to make this a really easy experience: "82 percent of BOPIS users are likely to shop for additional items at the store."
To that end obviously it's important to ensure inventory is tracked as much in real time as possible and updated online and at the store level. So that the merch a customer buys is held for pickup in the store, and confirmed as such beforehand.
Nice to know this was a theme: "It was also encouraging to see technology vendors take a more practical approach to the challenges faced by their customers."
Hype has been rampant in recent years, but I expect many retailers are fatigued by ill conceived promises of transformative tech to address the huge challenges in the retail landscape over the past few years.
Practical, measurable and timely steps are what most retailers need today, especially around how to best apply and scale AI and other advanced analytics. It's truer today more so than ever: you can't manage what you can't measure and a business model in flux is not easy to work with. I expect to see a lot retailers take parallel paths to get their data houses in order, while at the same time moving on AI use case opportunities with an eye on learning and scaling.
Also theme-wise, the whole cloud to on-prem IT strategy seems to be taking hold as it becomes clearer the advantages of a hybrid strategy. Not long ago we are all going "cloud cloud cloud!" Love it, but in practice it's not likely to be that cut and dry.
Loyalty programs are usually presented as a "give to get" whereby there is a value exchange. If the consumer perceives less value from the "get" they won't join.
Unfortunately for the retailers trying to grow their programs, the equation includes giving more than just an email address and some basic information. It includes giving you my attention and opening the door to more email in the already full inbox.
It might be a good idea to look at your loyalty program in two ways. One, think about your existing loyalty base. Each person has already given you something of value. Why not treat this as a treasure as opposed to a commodity to basically spam each week? If you really want me to do more than redeem a coupon, why not try a bit harder? Is it any wonder why loyalty program success examples are few? The ones that reportedly do best seem to have a few more dimensions to them.
The other way is to look at how to grow your program membership while reducing attrition. What are the reasons I should spend time giving you my information, looking at your emails, downloading your application? Is it really just to get a few dollars off a purchase which may be architected to give the retailer the most margin - like pushing an offer on a shirt but not the big brand shirt, or an offer for dollars off my first purchase of a service that includes an ongoing fee?
None of this sounds interesting, certainly not enough to bank on. Instead of "loyalty programs," most of these should just be called "communication programs" because they inspire nothing resembling loyalty in the brand sense.
Most only feed consumers' desire to save money, and we all know consumers that demonstrate loyal behaviors (I love Nike, or I love Apple, or I love Amazon) have a limited consideration set across categories and price is not usually the switching trigger.
What this all points to is that if retailers really want a “loyalty program,” it needs to be something that encompasses more than emails, apps and offers. It should be a living example of the retailer’s compelling brand identity. When you don’t have that identity in your pocket, what are you left with? Today's loyalty struggles, in my opinion.
Giving customers any reason to visit a store outside a crafting or making occasion is a great idea. The inverse of this news though may be just as interesting. UPS is doing this with as many retailers as possible to fend off Amazon's delivery business. For that reason, retailers competing with Amazon have a vested interest in working with UPS.
A different way to debate this question would be to re-phrase it as: why are boards and execs hesitant to implement more modern and accurate business performance measures? The answers to this question might span: old habits die hard, the market expects certain measures, or maybe the company has no ability to support the required analytics for new metrics.
It's probably a bit of all this - but like many retailer challenges, I think this comes back to a lack of maturity and flexibility with regards to analytics and information architecture. Retailers need to rectify this to be able to more quickly adapt and measure their business, from the top line to all the constituent business processes. Without it, how is any executive to have confidence in being able to accurately implement any form of new measurement system?
It's a tremendous solution, especially since it reinforces the business' position as a convenient shopping experience relative to all the other competing shopping options available to consumers. It would be cool if they could dynamically assess market basket building in real time to propose complementary products or offers on the consumer's mobile device.