Why Brick-And-Mortar Merchants Are Tapping Into Unattended Retail

To help meet customer expectations in the digital age, retailers have to know who their shoppers are and what they want. While eTailers already have this information about consumers, brick-and-mortar retailers don’t have this in-depth knowledge. New digital innovations, however, provide the promise of offering valuable customer data to merchants.

Smart vending solutions are becoming more popular and offer merchants new opportunities for insights, according to the latest PYMNTS Unattended Retail Tracker. Through the help of kiosks, merchants can discover their most popular items and where, as well as when, they are sold. They can also help capture the ages, genders and emotions (in some cases) of shoppers.

From Rent the Runway to McDonald’s, retailers are tapping into a world of technology that lets customers make transactions without visiting a cashier. These are just some of the ways that merchants are using digital innovations to better serve their customers with the help of kiosk and unattended retail technology:

Sixty-four percent of Canadian consumers say self-service technologies improve their in-store shopping experiences. And some eCommerce brands are bringing the convenience of self-service technology into their brick-and-mortar stores. Rent the Runway’s new store in San Francisco, for instance, was to include “self-service stations” that let members of its subscription service return items and borrow new ones. And shoppers would be able to finish that process without talking to a staff member. But the store was also to have staff called “in-store stylists” to offer recommendations tailored to each customer. Rent the Runway opened the 2,600-square-foot store in San Francisco after outgrowing its 1,800-square-foot space inside of a Nieman Marcus store in the city.

Approximately one quarter — or 25.3 percent — of surveyed Canadian consumers would not mind autonomous vehicle deliveries. In the U.S., Kroger Co. and SoftBank-backed robotics firm Nuro recently announced the rollout of their autonomous grocery delivery service in Houston. The companies said the service will be available via two Kroger stores in the Houston area and reach customers residing in four local zip codes. Nuro Co-founder Dave Ferguson said in an announcement. “Texas has been a leader in encouraging self-driving innovation, and we’re excited to help deliver that future for Houston — a dynamic, diverse, and welcoming metropolitan city that we’re excited to soon explore and serve with this autonomous delivery service.”

The expected compound annual growth rate (CAGR) of the global self-service kiosk market from 2019 to 2024 is 4.3 percent. McDonald’s, for instance, planned to add self-service stations at a rate of 1,000 U.S. stores per quarter for eight to nine quarters as of last June. McDonald’s CEO Steve Easterbrook said at the time per CNBC that consumers would be able to have more choices than the counter or drive-thru, “They can order through mobile, they can come curbside and we’ll run it out as well as the existing traditional ways. You can pay in different ways and customize your food in different ways.” Other new offerings at the time by McDonald’s included the introduction of its premium “Signature Crafted” burgers in April.

The projected CAGR of the global customer self-service software market from 2017 to 2024 is 16.34 percent. ShelfX, in one case, seeks to bring commerce to existing coolers with kits that retailers or facilities like airports can implement with their refrigerators. “It makes them [into] an unattended retail solution,” ShelfX CEO Ran Margalit told PYMNTS.com in an August interview. Customers can unlock fridges by providing a credit card or another payment option with ShelfX’s technology. Once the system determines that the payment is valid, ShelfX opens the door and shoppers can browse the selection. The technology then only charges consumers for the items that they end up removing from the cooler.

The number of Kentucky Fried Chicken locations to adopt kiosks by 2020 is 5,000. Yum Brands President and Chief Operating Officer David Gibbs said in an earnings call per reports, “We are continuing to make it easier for our customers to enjoy original recipe through the continued rollout of click and collect kiosks and delivery.” Gibbs said, “Our goal is to have 5,000 restaurants with kiosks and over 70 percent of our restaurants offering delivery by 2020.” Another Yum Brand, Taco Bell, is deploying self-service kiosks to help modernize its restaurants and provide new ordering experiences to its diners.  The devices let diners peruse the Mexican-inspired chain’s menu and customize their selections to their tastes or dietary needs.

From Taco Bell to Shelf X, retailers and technology providers are enabling a world of commerce through the help of kiosks. And, while the unattended retail space is undergoing constant change, contactless in addition to other digital payment methods are driving the adoption of kiosks for movie tickets to medications in the latest age of retail.