Many mall developers, retailers, consumer product manufacturers and even vending operators are facing demographic, economic and technological challenges, as 12% of consumers are moving to urban areas annually, according to a study, titled: Digital Malls: The Next Generation of Self-Service Shopping, by the Cisco Internet Business Solutions Group (IBSG). Additionally, 8% of retail sales have transitioned to e-Commerce channels and high levels of unemployment continues to dampen consumer spending.
To combat these challenges, the study pointed to three technology-enabled, self-service retail trends that hold promise: innovative vending machines, micro-markets and virtual stores. Though developing individually, when combined they could create a new retail business model ― the “Digital Mall” ― a vision estimated at $7 billion, according to Cisco IBSG. Characteristics of the model include high interactivity, low labor and target locations in densely populated areas such as airports, large offices, resorts, stadiums and universities.
The New Attraction Of Vending Machines
Today’s consumers ― particularly millennial generation shoppers, often more comfortable purchasing from machines than people ― are buying higher-priced goods from vending machines, the report indicated. As such, vending is becoming a more sophisticated point-of-purchase marketing opportunity, leveraging LCD screens and glass doors for advertising, product information, promotions, samples and games. As a component of the Digital Mall, innovative vending technology enables more convenient and engaging interactions, using features such as touchscreen and video communication, mobile and facial recognition and cashless payment.
Micro-Markets Offer Financial Benefits
Micro-markets are unattended, networked convenience stores with open shelves, coolers and freezers. Customers complete self-checkout at video-enabled kiosks with cash, credit cards or mobile devices. Benefits of the micro-market, according to the report, include greater selection with lower labor costs; higher sales, profits and price points; and better data-driven assortment and logistics planning. Industry experts forecast that today’s 1,000 to 1,500 micro-markets will experience a 9.3% compound annual growth rate (CAGR) over the next five years.
Virtual Stores Invite Interactive Experiences
Virtual stores allow shoppers to click on product pictures using touchscreen or mobile devices and place orders for later home delivery. The convergence of e-Commerce operations, high-resolution interactive surfaces, mobile QR codes and gesture technology have helped create this element of the Digital Mall. Recent virtual store pilots include Peapod, an online grocery ordering service, in Chicago; Peapod by Giant in Philadelphia; Procter & Gamble in Prague; Walmart.com in Chicago and New York; Sears/Kmart in airport lounges; and a PayPal store in Singapore.