The Store of the Future

Our views are rather different. Unlike most of the journalists, I visit the Ilkley Booths supermarket quite often and know many of the other Booths' stores. I have a Booths' loyalty card, with favourable memories of many visits to Booths and a fond interest in their own Cognac and range of Vinho Verde wines. I do not think it is the end of self-scanning elsewhere. The Booths' decision is a marketing one, relating to their customer base mostly in prosperous market towns and villages. The options that self-scanning gives to many retailers are about queue smashing for people buying only a few items and extra flexibility when there are a lot of shoppers waiting at the checkouts. Of course the problems of scanning failures, the need for supervisor checks on age-related purchases such as knives, firelighters, paint sprays and alcohol, plus card payment issues remain and can be very irritating. At the end of my street is a small and friendly East-of-England Coop, which generally has one person on the checkout (sometimes two) and two card-only self-scan tills. There are no weighed items. It works well, because customers have got time to familiarise themselves with how the devices work and the average basket for self-scanning is normally just a few items. It normally means a faster checkout for customers.      

The ‘Next Best thing’

In the last 50 years the next best thing of course has changed a great deal. It has included the shift to self-service with the new Supermarket (and later the Hypermarket or Superstore) seen as the essence of the Future-Store. Self-service and self-selection is the norm these days in virtually every store. Eliminating slow checkouts and lengthy queues, a typical bugbear of most shoppers, has involved better layout, EPoS (electronic point-of-sale and laser scanning), automatic card readers, customer self-scanning machines and contactless payments. EPoS has provided customers with an itemised receipt and retailers with accurate information about stock and detailed information about who buys what and what time of day.

The Future-store versus Online

I used to think that the Future-store was all about technology, but that is wrong. Probably. Obviously the most important type of Future-store at present is online retailing. Initially a method of buying books and music in the early 1990s, which has moved the retail store from the mall or high street into the customer’s own front room. Most medium and large retailers now have their own ecommerce operation and one of the main Future-store questions for them is how to balance their ecommerce operations and IT with the way their physical stores operate. They must ensure the same customer is treated in the same way by each part of the business. This approach, termed omni-channel, is an aspiration today rather than an approach that any retailer is yet using, but it certainly will be the data bedrock of the retail Future-store.

Many Large Stores Now Obsolescent

Retailing has certainly not stood still in the last 50 years. Stores have got bigger and bigger: in 1965 the UK definition of a supermarket was a 3,000+ square feet store with self-service. This would now be regarded as a tiny convenience store. The problem that many multiples now have is that their stores are too large. Some of the merchandise that used to help fill the sales area, such as music, videos, CDs, small electrical goods, homeware, kitchenware goods, clothing and babyware, are now bought from discounters or online. Hence the approach to remodel stores, making them smaller, to add services such as dry cleaning, clothing repair, cafes, and gaming studios, to invite competitors to open concessions, or to partition the stores to make three stores where there was once one.

New Technology

New technology probably will be an important element of the Store of the Future. Some people think that the Future-store is only about using new technologies, although our view is that this is mistaken. If physical stores are to survive they need to add something different to the shopper’s experience – something they cannot get online, but if the new stores are too slow, inefficient or too expensive they probably won’t be the Store of the Future for very long. Moreover, technology-intensive stores will have much higher costs than other stores and this probably means they will be confined to major shopping destinations. However it is true that technology costs normally fall with mass production so that a product like a virtual 3D mirror (which shows you what the garment looks like from every direction and can even change the garment’s colour without the customer needing to put a fresh garment on physically) may potentially become very common. 

New Technology is Limited by People

However people don’t necessarily embrace technology warmly. Customer self-scanning is still seen as problematic five years after the major push to get shoppers to use them. The reasons are probably partly technical (they are very clunky and slow to use) and partly psychological (they are not private enough). Even Amazon Go stores, which have received tremendous favourable publicity a year ago, have a limited range of goods and the average customer spend is currently very low, suggesting that technology alone is not the answer. 

Some New Ideas about the Store of the Future

Below is a list of videos with some new ideas. Some ideas are terrible (facial recognition), some practical (refills or subscription services) and others involve high tech that is worth considering (shop and Go and automatic RFID-based no-wait scanning). Several are made by companies to help sell their products, but they are still very interesting. We have not been paid to recommend any of these videos. As you might expect, there is some repetition. There is no need to watch every single one.