Technological innovation has become the new space race, and retailers are jostling to get ahead of the competition. Rebecca Thomson highlights 19 examples of innovation across the globe.
Disruptive thinking has produced a tidal wave of change in retail over the past decade - it’s no longer possible to think of innovation as only ensconced in Silicon Valley.
The best retailers are thinking ahead and challenging accepted methods of doing things. Arguably this has always happened - Tesco’s Clubcard, for instance, was nothing if not new - but today the pace of change is increasing.
In just the past few months, retailers including Sainsbury’s have tried mobile scan-and-shop services, interactive mirrors and screens have made their way into stores and shop windows, and delivery services are being extended as the search for more convenient options becomes more pressing.
And it won’t end with mobile, which has become the innovator’s gadget of choice at present. On the horizon are fridges that order groceries when they are running low, and shopping trolleys that follow customers around the store and scan items as they are put in.
Which is not to say all of these innovations will change retail. Ideas are plentiful, but the process by which retailers and consumers adopt them is an organic and generally unpredictable one.
“Some of these ideas are genuine innovations, and will change the way we shop,” says Abigail Lawrence, global innovations analyst at research body IGD, which compiled the list of examples. “Some are more about gaining brand exposure.”
Of course, clever marketing ideas are still worth investing in - grabbing attention is ever more difficult in an increasingly noisy retail landscape.
Lawrence believes that innovation is picking up in the retail sector. “We are seeing more people taking advantage of new technology as they start to get to grips with what they can do with it.”
The change is partly due to a change in attitudes, she maintains. “People were afraid to experiment with it before - now they’re being a lot more bold.”
IGD constantly tracks innovation across the global retail industry, Lawrence says, looking for new ideas that challenge the status quo. “The criteria is that they’ve moved their area of speciality on in some way. The idea needs to challenge convention.”
The list includes examples from retailers, and also ideas from FMCG brands, whose desire to make their products stand out often leads to innovative thinking.
Ideas from afar
Asia has become a particular hotbed for new ideas. That is partly down to the fact that Asian consumers are often open to more unusual ideas and willing to try new things - contactless payments have been the norm for years, and quirky ideas tend to take off. A mashed potato and gravy vending machine, for instance, is apparently a real hit in Singapore. “In the UK, vending machines aren’t very exciting, but around the world they’re going crazy for them,” says Lawrence.
The Emart supermarket in Korea is another Asian retailer that came up with an interesting idea, building 3D QR codes that only work when the sun is at a particular point in the sky. The idea was to increase sales at a certain time of day, when it noticed lunch time sales slumping.
QR codes and mobile phones are a central part of much of the innovation going on in retail. Canadian grocer Sobeys is using the codes to provide provenance information on products, while Blippar’s augmented reality app is providing a way of turning advertising images into a direct sales stream - shoppers who hover their phones over the images can be taken to transactional web pages.
At Swedish retailer ICA, meanwhile, loyalty is getting easier because of near field communication. Shoppers who buy their lunch there can use contactless payment to pay, and will be rewarded with a free lunch if they shop there regularly.
In-store technology is also changing the way retailers are operating. At the visual merchandising end of the spectrum, Tesco is growing lettuces in water in Thai stores, which makes for fresher food and arresting store displays. And Whole Foods is running a small trial of smart trolleys that scan items as shoppers place them in.
Text and tweet
GPS is another technology retailers have been experimenting with, and Nestlé used it to run a prize draw. Some chocolate bars had GPS tags embedded in the packaging, and the GPS meant that prize winners didn’t have to go anywhere to claim their winnings - in a slightly unnerving twist, within the next 24 hours a KitKat team would find them with their prize.
Grolsch’s marketing gimmick, meanwhile, involved the use of online video. A police officer character in the video would show shoppers a number to text - viewers who did so would see their names displayed on the video as it played, and then receive a text in return. Some of them would win a free beer if the text said that the
character has heard of them. “It’s a clever, very personalised campaign,” says Lawrence.
Retailers and brands have had mixed success with social media, and Kellogg’s did something particularly interesting with Twitter. Its ‘Tweet Shop’ was centred around the launch of a product - its Special K Cracker Crisps - and it gave out free products to anyone who tweeted about the product using certain hashtags.
Whichever direction retailers choose to innovate in, IGD’s list shows just how much is going on in the retail industry. What’s important is that businesses try something, because others certainly are.
LG smart fridge
LG has unveiled one of the first examples of a smart fridge - it isn’t a million miles from customers scanning products with their mobile phones, but it sounds significantly more futuristic.
A shopper can choose particular items that they want the fridge to keep an eye on, and the device will automatically order more of these items as they start to run low. The items themselves can either be scanned by the fridge, or a till receipt can be scanned to input the products that need to be reordered. There is also the potential for the fridge to connect to other devices in the kitchen such an ovens or microwaves.
Emart 3D QR codes
Stores across the world can struggle with slow sales at certain times of day, but few have come up with such an unusual solution as Korean grocer Emart. The retailer was finding it difficult to drum up sales between the hours of midday and 1pm, so decided to create a gimmicky shopping experience that only occurred between those hours. It created 3D QR codes, building large models of QR codes that worked as sundials. The QR codes weren’t complete until the sun was at a certain point in the sky, with the shadows created by the models acting as the final parts of the images, which could then be scanned by mobile phones. Sales reportedly increased 25%.
Sobeys ‘Localise’ stickers
This Canadian grocer places QR codes next to its price labels, allowing customers to scan them to find out more about the provenance of the product they are looking at. The codes give information on everything from how close to the store the product originated, to how sustainable its production methods were. It’s a relatively simple use of the idea but a good one, says Lawrence, because it provides shoppers with information they want in an easy way. “It’s a great way to boost provenance information in the store,” says Lawrence. “It saves the shopper having to do their own research.”
Hellmann’s recipe receipts
Brands have been keen to capitalise on the recent trend among consumers to cook at home more often, and are finding ways of pushing their products as recipe ingredients as a result. Hellmann’s has tried a particularly clever method of installing software in store till systems in St Marche supermarkets in Brazil. The software notices when a shopper buys Hellmann’s Mayonnaise, and notes what else is in the basket as it is scanned through the till. It produces recipe ideas that include Hellmann’s, and which are based on the ingredients in the basket, on the back of the printed receipt. “It’s a new way of personalising and tailoring the offer,” says Lawrence.
Zeebox TV app
Interactive, internet-connected TVs have been around for a while, and Zeebox is one of the first apps to call itself a ‘social networking and social television’ site. It allows users to connect and interact with a TV via their mobile device, and enables greater interaction between the viewer and a programme. Viewers can get extra information about programmes and interact with other people who are watching. There is the potential for shoppers to buy what they’re watching straightaway, especially via adverts designed for the purpose. “It’s a good example of a connection between different screens,” says Lawrence. She says adverts using technology like this are starting to take off in the US, where retailers including Target are experimenting with the medium.
Hydroponics systems - which use nutrient-rich water instead of soil to grow plants - have been used in agriculture for a while, but now Tesco is taking them to the store. IGD pinpoints lettuces growing in water in its Thai stores, keeping the plants fresher for longer by allowing them to continue growing, and creating an unusual merchandising method. “Asia is big on fresh food,” says Lawrence. “Tesco is using this to keep food fresh, and it’s an impactful visual display. We are seeing retailers increasingly experiment with freshness.” It’s not just Tesco trying new ways of keeping things fresh - Morrisons is using in-store sprays to keep vegetables perky.
The future of shopping - 19 retail innovations
1. 3D QR codes in Korea - Sundial QR codes that use shadows to provide timed offers at Emart.
2. Grolsch personalised beer promotion - Clever use of text messages and video to provide shoppers with
3. Kellogg’s Tweet Shop - One of the first examples of social media messages being used as currency.
4. Hellmann’s recipe receipts in Brazil - Software that produces recipes based on items in your basket.
5. Sobeys ‘Localise’ stickers in Canada - QR codes that provide provenance information on products at the shelf.
6. KitKat GPS promotion - Random chocolate bars have GPS tags in the wrapping. There’s no complex claim process, as the prizes find you.
7. Blipp to Buy smartphone app - Augmented reality as a sales channel - hover a mobile over a product image to be taken to a transaction page.
8. Kinect smart shopping trolley at Whole Foods - It’s the future - a trolley follows you around and scans products as you place them in it.
9. Philadelphia holographic packaging - Innovative packaging from Kraft, with recipes printed on holographic packaging.
10. Ahold’s AH to Go’s digitally optimised store - Dutch convenience chain AH to Go’s fully digital store has free wi-fi, digital signage, QR codes, a local product offer and Facebook page, and different offers, lighting and music according to the time of day.
11. Mashed potato vending machine - Vending machines are big in Asia - this one in Singapore dispenses mashed potato and gravy.
12. Hope - a new approach to charitable giving - Convenience chain Budgens puts wooden blocks on the shelves with bar codes on - shoppers can take them to be scanned as part of their shop, donating money in the process, and the blocks are then returned to the shelves for other donations.
13. ICA near field communication loyalty drive - Swedish retailer ICA allows shoppers to buy their lunches using near field communication, and automatically gives them one free after buying a certain number.
14. Tesco hydroponics in Thailand - Innovative visual merchandising, involving growing lettuces in store.
15. Albert Heijn impulse merchandising - Dutch retailer Albert Heijn has produced an end-of-aisle chiller cabinet in Belgium, allowing drinks to be sold as part of an offer more easily. Normally drinks that are sold as part of a lunch deal have to be merchandised separately - this new set up makes it easier for customers.
16. Carrefour temporary private-label store - Pop-up stores aren’t new, but this one in Milan moves the format on because it markets and stocks one of Carrefour’s own brands.
17. McCain multi-sensory bus stop ads - Bus stop ads for jacket potatoes that felt hot and smelt like potatoes baking - another development in marketing.
18. Zeebox TV app in Australia, the US and UK - One of the first interactive TV apps.
19. Evian automated re-ordering - Bottled water arrives on your doorstep, using the automated ordering idea behind smart fridges.