Tech Notes: Checkout Preferences, SAP at NRF, and More

Looks like it’s time to make the check-out process frictionless and easier. As retailers such as Wegmans, Walmart and Costco are rethinking self-checkout, new research commissioned by Avery Dennison showed “an inflection point in consumers’ shopping behavior,” with 37 percent of respondents polled in the U.S. and the U.K. saying “they would switch to a retailer that offers full check-out free stores.”

The research also showed that 67 percent of respondents said “they would opt for retailers that offer self-scanning at the end of a shop, while almost three in five (59 percent)” noted the same about self-scanning while they shop.

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The pushback on current self-checkout operations is due to scanning glitches and consumer frustrations. But Avery Dennison’s research revealed a possible solution: It found that 45 percent of those polled said they “would switch to a self-checkout service where products are automatically detected via in-item tagging, meaning they don’t need to scan a barcode.”

The research also found that Generation Z leads the way when it comes to a preference for frictionless shopping, “with over half (52 percent) likely to switch retailers for check-out free stores.”

“Furthermore, 49 percent say they would be likely to spend more money with a retailer that has a connected or automated checkout experience, and 52 percent say connected stores would make them more loyal to a retail brand,” the report’s authors said, adding that some of the key factors fueling a consumer desire for more frictionless shopping experiences include a faster overall experience, not having to queue and less interaction with people.

Francisco Melo, president of the solutions group at Avery Dennison, said, “Considering that most people haven’t yet had the opportunity to try a full check-out free store, our research shows a high percentage would be more likely to switch retailers for the experience, which demonstrates a clear shift in consumer expectations. At the same time, a growing number of leading retailers are turning to digital ID solutions to truly transform the customer experience.”

As the National Retail Federation’s Big Show wrapped up this week, the Expo Hall was still buzzing about AI, generative AI and predictive AI and its use by retailers and brands.

The NRF touted reports from market research firm IDC showing that the retail sector “ranks second among all industries globally in its spending on AI technologies.”

“And a new study conducted by IHL Group reveals that retailers that have already embraced artificial intelligence and machine learning technologies are experiencing noteworthy success, achieving 2.3 times growth in sales and 2.5 times growth in profits for the year 2023 when compared with their competitors,” the NRF said in a blog post. “Projections for 2024 indicate a similar trend for those embracing AI/ML solutions.”

At the show, SAP SE spotlighted new AI-driven capabilities for its platforms that included predictive demand planning and inventory replenishment as well as functions “to help retailers optimize business processes and drive profitability and customer loyalty,” SAP said in a statement.

Ritu Bhargava, president and chief product officer of industries and CX at SAP, said the new capabilities “build on SAP’s industry-tailored, intelligent customer experience (CX) strategy, which provides companies with deeply integrated functionalities to enable their most critical business processes and customer journeys.”

Bhargava said SAP’s “composable architecture unlocks the creative potential of retailers, allowing them to cherry-pick capabilities tailored to their unique needs and rapidly innovate and respond to market demands, ultimately helping them to supercharge profitable growth.”

The company’s integration capabilities differentiate SAP’s technology from others in the market, it said. “AI is only as good as the data that powers it, and SAP’s ability to integrate experiential and operational data across the enterprise enables more insightful, AI-driven decision-making for businesses,” SAP said in a statement. “This integration produces more intelligent, personalized experiences for customers, as the best retail outcomes require great CX.”

For Swarovski, the jeweler found SAP’s integration capabilities valuable for engaging shoppers. “In today’s environment, it’s critical to have insight across the business, which is why Swarovski has continued to adopt and leverage SAP’s end-to-end solutions, enabling us to connect our business processes,” said Lea Sonderegger, chief digital officer and chief information officer at Swarovski. “Since leveraging SAP software, we’ve had the flexibility and security to support continuous innovation, which offers us a consistent foundation for cultivating unique Swarovski customer loyalty across all touch points and innovating to create unique customer experiences.”

SAP also released new consumer data at NRF. In an SAP Emarsys Customer Engagement report that polled more than 2,000 shoppers, 72 percent said they “show greater loyalty to retailers that provide free returns.”

SAP said the research also found that 88 percent of U.S. consumers polled “have stopped shopping with a retailer because of a paid returns policy being introduced, while over half (54 percent) actively avoid retailers that charge to return items.” The data also revealed that the rate of product returns continues to rise, “with 84 percent of shoppers returning items over the last 12 months.”

“However, not all these returns are genuine, with nearly a quarter (23 percent) of consumers admitting to ‘wardrobing’ — a phenomenon where consumers buy items with the sole intention of returning them,” the report’s authors said. “A common example of ‘wardrobing’ is shoppers buying the same product in multiple sizes when unsure of the fit.”

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