5 keys to the frictionless store of tomorrow

The objective of frictionless shopping, frictionless checkout, and autonomous stores is to improve the customer experience and increase convenience. Any of us can put ourselves in the shoes of a shopper and think about how nice it would be to never have to wait in line to give someone our money. I get that. However, for frictionless stores to make sense, it must have a positive return on investment (ROI) for the retailer, and to have a positive ROI, frictionless shopping must do way more than reduce the time that shoppers wait in line. We need more to differentiate our brands from the shortness of queues. After all, if short lines were all that mattered, then nobody would visit theme parks, right?

I would like to share five keys to thinking about creating your store-of-the-future and frictionless shopping experiences for consumers. The future of stores is bright, and it must start today.

1. Frictionless stores must be part of a larger business strategy

Whether it’s a fully autonomous store, scan-and-go, smart shelves, smart carts and baskets, curbside pickup, or ultra-fast delivery, technology is a means, not an end, to your store of the future. It is the how, not the why. The “why” must align with your business model and your competitive advantage, to justify the investment.

2. Data monetization is where much of the value of frictionless stores will come from

Your business strategy for frictionless stores will need to consider every point of data in a new way. My favorite way to think about it is the example of shipping costs in the world of e-commerce. Some retailers think of shipping costs as a cost to be minimized. Other retailers think of it as an investment to gain invaluable insight into my family’s household consumption patterns. Retailers that encourage me to order Tide pods as soon as I run out versus persuading me to build a larger basket to save on shipping, can monetize that data in a variety of ways. They can build a retail media business, or they can put that data to work to generate offers and promotions for me at the exact right time, increasing the existing revenue or just protecting it from competitors.

Similar to what we saw with correlating shipping data to consumption patterns, the incredible number of insights generated by physical stores can be leveraged to build predictive models for demand forecasting, workforce optimization, and energy optimization to improve store layout and planogramsthe list of benefits goes on and on. All these improvements must accrue to building your competitive advantage. If your brand’s key value is going above and beyond in customer service, then the investments in frictionless checkout should enable you to re-allocate associates’ time to customer service.

Data monetization is a business strategy for long-term gain powered by technology. It’s not a technology strategy.

3. The focus on creating frictionless experiences for consumers in the store must be equal to the focus on removing friction from your business processes

That’s the only way it will work at scale and in the long term. What do I mean by that?

Just like you can’t have a great customer experience without a great employee experience, you can’t get business value from new consumer experiences in the store unless you create connections to your business processes, enable the flow of data, develop insights, and inject the insight into workflowsbe it its inventory management, returns management, retail media, marketing, planning store layouts and more.

I call this frictionless inside and out.

4. There is no one definition of frictionless experience for the consumer nor for the retailer

I have a confession to make. I don’t mind waiting in grocery lines, chatting with the store associates as I think, daydream, and glance at the covers of the magazines I won’t buy. Also, the pandemic keeps reminding us that we don’t know what capabilities could become essential almost overnight and for what target audience.

Retailers are taking many approaches to enable frictionless shopping experiences in their stores, and there won’t be “one size fits all.” Depending on store format, locations, and geographies, you might have just-walk-out, leverage smart baskets or smart carts, implement ‘scan-and-go’ or some combination of them.

Startups and retailers are driving incredible innovation and thinking of things we don’t know we really want yet. It wasn’t that long ago that two-day delivery seemed like the height of convenience luxury. Watch this Microsoft for Startups program on-demand recording, Transforming Retail with Autonomous Stores, featuring four amazing companies changing retail: AiFi Inc., Storekey, Shopic, and Explorium.

5. Your store of the future is a business strategy that requires digital DNA

Reimagining the customer experience in the store is not about point solutions. Companies that take that approach are doomed to chase the next best thing and may never see a positive return on their investment. You must prioritize making all the solutions work together to drive true business value for your shareholders and amazing unified, omnichannel, and omnipresent experiences for your customers.

You need to build a business and digital agility powered by digital culture to continually source, evaluate, and deploy solutions from innovators. And these solutions must be orchestrated with the rest of your ecosystem, adding value to your business processes, and preparing you for what’s next. And if there’s one thing we know, there will always be something new just around the corner. This means retailers need an ecosystem approach that ensures that every solution works in an orchestrated fashion.

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I contend that the store of the future is boring. It’s not about guessing the next ‘must have’ capability. Your store of the future will update shopping experiences overnight, just like our phones do. Are you ready to make this happen?

Follow Microsoft Retail on Twitter and visit our Microsoft Cloud for Retail website to get the latest on how Microsoft and our partners are helping retailers deliver a seamless experience across the entire shopper journey.

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