The Role of Technology in Retail’s Brick-and-Mortar Future

A Q&A with Sensormatic and Google Cloud

self-checkout

As part of its continuing focus on innovation, Sensormatic Solutions by Johnson Controls is continuing its partnership with Google Cloud to power Sensormatic IQ, its new intelligent operating platform designed to improve shopper experiences and retail outcomes as the industry continues to evolve and meet new challenges. LPM spoke with Subramanian Kunchithapatham, vice president of engineering at Sensormatic Solutions, and Carrie Tharp, vice president of retail and consumer at Google Cloud, to discuss the role of technology in helping retailers move into the future.

LPM: What are the most critical challenges retailers need to address in a COVID and post-COVID-19 world?

Subramanian Kunchithapatham
Subramanian Kunchithapatham

KUNCHITHAPATHAM: The retail industry has drastically transformed over the past year due to the COVID-19 pandemic. As a result, a key challenge for retailers today is how to best restore customer confidence as many consumers indicate they are concerned about shopping in-store. We have also seen a shift in shopping behaviors that have drastically accelerated retailer’s need to digitally transform to stay competitive.

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Retailers must first ensure a safe and healthy in-store environment. To do so, it’s critical for retailers to adapt technologies to meet consumer expectations and high standards for health and safety. This can include technologies for real-time occupancy, thermal imaging, social distancing, and mask-wearing surveillance solutions.

Additionally, with more consumers shopping online and turning to emerging fulfillment options like buy-online, pickup-in-store (BOPIS) or curbside pickup due to COVID-19, retailers will need to adopt technologies to have real-time visibility into their inventory to create a seamless and positive experience. By leveraging these technologies, retailers can address challenges head-on while positioning themselves to successfully futureproof their business.

LPM: Given the rise in digital shopping, what role will the physical store play in the future? What digital capabilities are most critical to help retailers evolve their brick-and-mortar strategy?

KUNCHITHAPATHAM: Although there has been an increase in online shopping, the physical store remains critical for the shopper journey as well. In fact, according to a recent Sensormatic Solutions survey, 39 percent of shoppers still rely on in-store shopping as they want to seamlessly move across channels. To meet these needs, retailers are evolving their in-store and digital capabilities to become smarter.

New, impactful technologies include:

  • Computer Vision—Computer vision will help stores manage “queue bursting” during fulfillment at curbside or secure BOPIS lockers by using their outside security cameras to trigger alerts when the number of people waiting exceeds a set threshold. This is one example of how computer vision will help improve the customer experience for these high demand fulfillment options.
  • Digital Kiosks—Digital kiosks will be essential for the “try,” “check,” or “view” before you buy experience. In the store of the future, for example, it will allow shoppers to virtually view how a fridge, stove and microwave look together before making a purchase decision.
  • RFID—Initially, RFID was popular for in-store cycle counting, but today RFID extends to and provides visibility for the complete end-to-end value chain. This translates to better demand planning and more sustainable operations.
  • 5G—5G will provide stores the connectivity they need to power new technologies, from digital signage to video recognition of shoppers and more.

LPM: How do you see data impacting the future of retail? How can retailers use data to make prescriptive and predictive decisions?

Carrie Tharp
Carrie Tharp

THARP: As consumer routines have fundamentally shifted, there’s a new sense of urgency for retailers to digitally transform to keep up with consumers’ expectations, habits, and purchasing behaviors. It is important to note that the physical store is still a key part of a modern omni retailing strategy, and retailers are quickly evolving their in-store digital capabilities to create smarter stores.

Data is critical to understanding and responding to changing needs. Retailers can derive insights from data to better understand what is happening across the enterprise and make prescriptive, data-driven decisions. For example, the right technologies and solutions in place can align demand with inventory across and within stores, and even provide shrink prediction and prescription. Understanding in-store data streams are key to the online-to-offline journey, meeting customer expectations around in-store pickup and quick shipping, having more certainty around inventory, and more.

That’s why solutions like Sensormatic Solutions’ new intelligent operating platform, Sensormatic IQ, powered by Google Cloud, are critical to provide retailers the data and insights they need to drive digital transformation and make predictive decisions across the enterprise.

LPM: Can you provide an example of how retailers will commonly be utilizing new technology to reduce loss in the near future?

KUNCHITHAPATHAM: There is a vast portfolio of technology options to help retailers reduce shrink from electronic article surveillance (EAS) and source tagging to Shrink Management as a Service (SMaaS).

However, with the rise in self-checkout due to social distancing regulations because of COVID-19, we are seeing more retailers invest in technology to reduce loss for this service. Though this has been around for years, the technology behind self-checkout is evolving rapidly. However, self-checkout opened multiple avenues for shrink, as shoppers would just skip over items and place them on the conveyor belt. Retailers were unable to gain control over the situation at first but using video surveillance technology powered by artificial intelligence (AI) to see exactly what customers are buying, the quantity and even the weight, has been game-changing. This enables retailers to act against in-store shrink in the following ways:

  • The latest video technology can identify shoplifters, the exact items stolen and the items’ value.
  • Retailers can use deep learning models, image processing, edge hardware and AI-powered cameras to identify targeted behavior to help improve store operations.
  • Data can identify shoplifters based on previous in-store behavior and flag them to store managers during subsequent trips.

While self-checkout continues to serve as a reliable, seamless service for consumers, it is also an incredibly valuable technology for retailers’ top and bottom lines.

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