The Retail Store of the Future

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Americans love to shop. It’s no secret that measures of how

much—such as dollars spent and year-over-year spending

patterns—are keys to understanding the nation’s economic

health. While that truth isn’t likely to change, the shopping

experience itself is changing rapidly. Indeed, the shopping

experience of tomorrow will be a lot different from today’s.

Retailers are adapting quickly. They are seizing new ways

to attract customers, engaging them before and after

they arrive in their stores. They are multiplying potential

customer touch points through a variety of targeted methods

including electronic media and social networking. Perhaps

most importantly, they are discovering new ways to enhance

customer loyalty by increasing their ability to stay connected

after the sale.

At the heart of this transformation are Internet-based

technologies and networks that can extend the shopping

experience outside the traditional bricks and mortar

environment. Harnessing them for maximum business

impact represents a major opportunity for retailers,

underlined by the dynamics of the new shopping

tastes of the connected consumer. In a report by

PricewaterhouseCoopers and TNS Retail, the “next

generation of consumers contains a more tech-savvy and

more diverse group that holds different values than its

parents.” The report goes on to say that the “one-size-fits-all

approach of the mass chain store format will not be viable.

Stores able to respond to individual tastes will become

dominant.”1

In this new environment, effective online strategies are

critical. According to market research firm Forrester, by

2013 more than 50 percent of all retail transactions will be

affected by the Web. Consumers have more access points

than ever before and are demanding convenience, choice,

and variety in their shopping experiences. Companies will

need to continually shift spending towards enabling online

channels or risk losing their competitive positions. The

future will be about delivering a customer experience that

seamlessly transitions between online and offline channels,

no matter where individual transactions take place.

A second trend is real-time analytics. In order to create

customized shopping experiences, retailers will by necessity

process ever more information through their networks,

tailoring interactions to individual customers. According to

Nigel Fenwick at Forrester, “socially empowered customers

are also influencing retail merchandising, with a major

shift in increased reliance on technology to analyze rapidly

changing consumer trends as they happen, which empowers

retail merchandisers to make quick decisions.”2

1 Ben Steverman, The Future of Retail, BloombergBusinessWeek, April 15, 20092 Nigel Fenwick, Industry Innovation: Retail, Forrester, July 28, 2010

THE RETAIL STORE OF THE FUTURE www.hughes.com

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A third trend is the extension of the shopping experience

that goes beyond the store to reach consumers before

they go through the doors, and after they are finished

shopping. PSFK’s recent report, “The Future of Retail,”

describes a new retail environment where store fronts and

mobile applications build relationships even before the

customer steps in the door and walks down the shopping

aisle. Moreover, once inside, interactive displays and

mobile applications will enable retailers to customize each

experience, deliver superior customer service, and glean

valuable customer feedback for the person’s next purchase.3

At the heart of this experience is technology—technology

that increases a sales associate’s ability to help customers

and close sales. As demonstrated through these trends,

much of the technology revolves around a store’s ability

to securely manage multiple flows of information across

multiple networks. The following are just a few of the

developments that are either in stores today or coming to

stores in the near future.

In-Store Shopping Assistant and Kiosks – Shoppers

enter stores today with more knowledge than ever before.

Retailers can embrace this rather than fear it by providing

relevant product information through multiple possible

channels. For example, it is likely that a store will offer

patrons an in-store shopping assistant via their mobile

devices. Consumers will walk down the aisles and as they

see items they want, scan the products with their mobile

3 PSFK, The future of retail, 2009, http://www.psfk.com/future-of-retail

The Retail Storeof the Future

Break RoomTraining

Retail DigitalSignage

Digital PhotoKiosks

AutomatedInventory

Management

Loss Prevention/Video Surveillance

Auto

In-StoreConcierge

Mobile Workforce/Handheld POS Mobile Ordering/

Local Pickup

POS/RegisterPCI CompliantArchitectures

THE RETAIL STORE OF THE FUTURE www.hughes.com

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devices either through camera barcode readers or the

camera itself. With the barcode or picture, a dedicated store

application will display product descriptions, reviews, and

“how to” videos to demonstrate the product in action. For

those who do not have mobile devices, one will be provided

via a dedicated booth or through customer service.

A frequent point of frustration among consumers is the

inability to get in-store assistance. In the retail store of the

future, that problem may disappear. Live customer support

kiosks were one of the newest technologies showcased at

the National Retail Federation convention in January. A

customer picks up a telephone at a kiosk and is immediately

connected through live video to an expert. The expert is

armed with a variety of tools to satisfy customer questions,

ranging from store maps to product details, inventory status,

and access to the Web.

Electronic Shopping List – Mobile applications will also

serve as in-store “e-shopping carts,” allowing consumers to

place items there instead of lugging them around the store.

When it is time to go, consumers can decide to purchase

the items and take them home, or to have the store deliver

them from their online store.

In-Store Electronic Concierge – At the end of every aisle

and throughout the store, consumers will find touch screen

displays. By tapping the screen and searching for an item,

the electronic concierge will tell the consumer where the

item is, and in the event it is out of stock, which nearby

stores have it.

Mobile Ordering, Local Pickup – Consumers are busier than

ever with lots of shopping to do and not much time in which

to do it. Retailers will help consumers save time by enabling

them to make purchases using their laptops and mobile

devices, securely transmitting data to the store for order

processing. By the time customers get to the store, their

purchases will be waiting.

Video Employee Learning Centers – Since consumers now

have product information at their fingertips, retail staff will

have to be more knowledgeable than ever. If an employee

doesn’t know the answer to a customer’s question, it is

increasingly likely the customer will be turned off to a sale.

To give staff the knowledge they need to help retailers

succeed, before every shift store employees will check in

at an interactive video display area. There they will hear

about the day’s promotions and get updates on the store’s

activities. Additionally, employees can text in questions and

get answers back from management via their cell phones.

Automated Inventory Management – Inventory management

will be automated. Goods will be on automated inventory

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racks so that management always knows when and what

to order. Branch stores will ‘talk’ to each other, enabling

managers to quickly and easily shift inventory from one

store to another to make sure they optimize supply across

stores.

Transaction-Based Video Surveillance – Video monitoring

for security and to reduce shrinkage and sales irregularities

will be based on activity. For example, video capture would

occur when there is a ‘no sale’ transaction at a register

or when certain inventory is accessed. By making video

capture activity-based, management will not have to weed

through hours of tapes to find out what happened with

inventory or at the cash register. This will not only reduce

shrinkage, but also will help gather marketing intelligence

on what does and does not appeal to customers.

Security of Multiple Data Streams, Multiple Networks

– All of the data running through multiple data streams

and networks needs to be secure. Payment Card Industry

(PCI) compliance requires a high level of security for each

transaction and the ability to guard against threats both

wired and wireless. Information needs to be able to flow

securely and efficiently with built-in redundancy. Self-

configuring VPNs and firewalls using intelligent routers

will make the whole process of becoming and staying PCI

compliant easier.

At Hughes, we’re working with many of the leading names

in retail to build this new technology infrastructure that

will support the retail store and shopping experience of the

future. And because these technologies are so important,

we are building them with increased reliability, higher

performance, and greater security than ever before. For

over a generation we have helped the world’s leading

retailers use information technology as a competitive

advantage. As retailers become more sophisticated in the

use of technology to boost sales and increase their store’s

efficiency, Hughes is well-positioned to help retailers build

their own “store of the future.”