Kroger Testing Future of Retail – Smart Shelves

Like other leading retailers, including Khol’s (see image to the right) or Whole Foods, Kroger, at a test store in Cincinnati, Ohio, recently announced that it is testing what one day may be a common fixture in retail–smart shelves.  

Kroger refers to their smart shelves as the “Digital Self Edge” solution.  Built in-house, the shelves will help shoppers see pricing and product details more clearly. The shelves may also present shoppers with contextually relevant multi-media content (like seasonal allergen details) and may eventually deliver personalized messages on the shelf or to the shopper’s smartphones through beacon networks integrated with the digital shelf solution. In the future, these personalized messages have the potential to provide shoppers with offers tailored to their loyalty accounts, recipe recommendations, notifications on items within their smart shopping list, and in-store directions to help them navigate the store to find items (Target, in its Cartwheel app, has a very effective store navigation service). 

Smart shelves have the potential to change the shopping experience in many more ways.  With smart shelves being updated from a centralized server, the store can free up staff to provide additional services and support to shoppers, such as answering questions and supporting click and collect services. These shelves may also include facial recognition capabilities to determine the gender and age of a shopper or to measure foot traffic patterns and dwell time of an individual shopper. They may also provide power to digital-ink printed packaging sitting on the shelf so that products can strike an interactive conversation with shoppers.  Finally, they many open up new collaborations (or power and control conflicts) between retailers, distributors and manufacturers in their pursuit to service and “own” shoppers and the relationship each has with them. 

Where eCommerce Meets Bricks ‘n’ Mortar

Krogers is not the only one investing in the changing face of retail. Walmart recently committed to investing $2 billion to enhance its eCommerce capabilities over the next two years. One goal of the investment is to compete against Amazon and other delivery services by supporting click and collect services.  Kohl’s is supporting this as well as referenced in the picture to the right, they’re providing dedicated parking spots at the front of the store to eCommerce shoppers. With click and collect services, shoppers purchase online and then come to the store to pick up their items.  According to a recent UPS study 38% of online shoppers will choose ship to store or pick up in store, up from 35% in 2014. Moreover, a whopping 45% will make a new purchase when picking up their items in the store.  For different product categories, the click and collect numbers actually go up.  King Solutions reports that users are most likely to buy online and pick up in-store when it comes to electronics (80%), followed by housewares (59%) and apparel (57%). 

There is more than meets the eye

Smart shelves and click and collect services are not just about driving engagement and sales, they’re also about redistributing resources.  For example, smart shelves may release store employees from having to manually update pricing on the shelves, which could release employees to provide increased customer services.  For instance, they could be redirected to fulfilling a shopper’s click and collect order.  The grocery staff could be tasked with pulling items off the shelf, packing the bags and bringing them out to the shopper as they drive up to the store.  A store may also choose to simply reduce staff.  Gartner has been attributed to having predicted that by 2020 85% of people’s interactions will occur without human contact.  

Expectations have changed

Digital shelves and click and collect are just a couple of ways retail is changing, forever. Faced with alternatives from going to the store, retailers must find reasons for people to come in and shop. Leading retailers are looking to enhance the experience of shopping beyond the simple utility of buying goods, they’re creating new demonstration stations, tasting sessions, interactive point-of-sale displays and more.  For example, Kroger, in addition to the smart shelves announced back in August that it testing the addition of wine bars and craft beer being on tap. Starbucks has gotten in to this game as well, having added wine and the “cocktail-hour” to the menu. I’ve actually heard this phenomenon referred to as “retail theater.”     

Lets keep an eye out, the grocery store and other retail may soon become a potential social destination, not just the place to stock up on the weekly staples or the latest fashion and gadgets.