Self-service retail and the changing landscape on payments

Self-service technology has created a wealth of opportunities for retailers to serve customers. A panel at the Hi-Tech Retailing Summit during the CES show in Las Vegas explored the extensive scope of these technologies and the benefits they can deliver retailers that seek to meet the needs of a more demanding customer.

Thanks to the progress that has already been made by self-service pioneers, such as Starbucks, today’s customers are expecting all retail experiences to be convenient and rewarding, said Brendan Wichter, vice president and principal analyst at Forrester Research, who moderated the panel, titled “New Paradigms for Retailers.”

“Everyone is comparing you to Starbucks, Uber and Nike,” Wichter said.

Diversity rules

The four panelists explained the diverse ways self-service technology has enabled a more successful retail customer experience, including Maeve Duska, chief marketing officer, USA Technologies; Yongjoon Choe, founder and CEO of Lululab; Ned Hill, CEO of Position Imaging Inc. and Larry Schwartz, CEO of Aetrex.

  • USA Technologies provides a cashless payment service for small-ticket, unattended retail that includes remote machine monitoring. 
  • Lululab, a skin care retailer, uses artificial intelligence to conduct skin analysis and recommend skin care products. A camera uses light-correction technology to measure zones in the customer’s skin, then conducts an analysis of age, pigmentation, wrinkles, redness, pores and other issues. Using AI big data analysis, the software recommends products suitable to the customer.
  • Position Imaging Inc. uses computer vision and laser guidance to expedite item retrieval for customers who buy online and pick up in store, known as BOPIS.
  • Aetrex, a provider of foot-scanning technology and orthotics, uses computer vision, sensors, AI and machine learning in a foot scanner to provide customers data about their feet, such as size, length, width, height pressure, arch type and more to determine the best shoe fit. The company then uses 3D printing to produce a custom orthotic.

Duska said digital payment technology has allowed retailers to bring their offerings closer to where consumers already are in their daily lives through self-service selling opportunities. She said self-service technology allows retailers to compete with Amazon.

“Retailers aren’t thinking about this (opportunity) by and large,” Duska said.

Duska also reinforced Wichter’s introductory remarks by noting that because of pioneers in this field, like Starbucks, consumers today are actually seeking out self-service. One USA Technologies-sponsored survey of 6,000 consumers found that 60% of those not currently using self-service technology would like to use it.

“They want to engage with technology over humans,” she said.

The study also found that 86% of the respondents want to purchase health and beauty products using unattended technology.

In addition to winning more sales, Duska said self-service devices, such as kiosks and vending machines, provide a point-of-sale advertising opportunity.

“It is a bit of a billboard when you have it where people are,” she said.

Duska did not sidestep the challenges that unattended retail involves. In order to scale a business using unattended retail, she said inventory replenishment and equipment maintenance are imperative.

Wichter said retailers also need to consider the fact that e-commerce sales are higher when the retailer also has a physical store. Self-serve kiosks, he said, provide a physical presence.

What about ROI?

Much of the discussion focused on the area that retailers are most concerned about when considering investing in self-service: return on investment. Duska said ROI can be measured by improvements in revenue, margin and efficiency.  

Hill of Position Imaging said ROI can be measured by comparing the monthly cost of the automated in-store retrieval process, with that of in-store labor. He noted that one of his retail customers delivered an average customer wait-time of 15 seconds.

Schwartz of Aetrex said for his technology — which he calls “experiential retailing” — a retailer can compare sales per square foot for his 3D foot scanner to that of the store as a whole. This calculation will not necessarily include the improved customer experience of having the right fit of shoe the first time they try one on, Schwartz said, nor does it account for the injuries prevented and the fewer shoe returns.

Another benefit of the technology, Schwartz said, is it generates customer data that the retailer can use for marketing.

Data privacy concerns

The panel also addressed the hot button issue of data privacy. 

Choe of Lululab said data privacy is not an issue for that brand’s customers since the data is merged and therefore anonymous. Once the service is provided, individual customer data is discarded.

“Data is not owned by the retailer,” Choe said, referring to customer provided data. “It’s only owned by the customer.”

Wichter said customers have shown they are willing to share personal data if they believe doing so will benefit them.

Photo courtesy of Networld Media Group.