Retailers Use Robots, Smart Rooms to Jolt Brick-and-Mortar Sales

Brick-and-mortar retailers are starting to use techno tools from interactive dressing rooms to robotic shopping assistants to revive sales and fend off online rivals.

As the competition for physical stores from Web giants like Inc. continues to climb unabated, Lowe’s Cos. and Macy’s Inc. are among companies infusing the so-called Internet of Things, or products connected to the Web, into their operations.

Retailers are using robotics and other technologies to replenish store and warehouse inventory and to improve the customer experience, which is a driver for sales, Anurag Rana, a Bloomberg Intelligence analyst, wrote in a note Thursday. The National Retail Federation projects retail sales will rise 3.5 percent as a whole this year, while non-store sales will grow as much as 8 percent.

“Emerging technologies are driving major changes in the retail industry,” Rana said. “Brick-and-mortar retailers are aggressively adopting advanced security measures, analytics, robotics, mobile solutions and connected devices to bolster sales and supply chains to counter the threat” from the Internet.

Lowe’s has shopping assistant robots at its Orchard Supply Hardware stores and is experimenting with a virtual-reality room at a few Lowe’s locations that let customers see merchandise and color pallets as they would appear in a home environment.

Omni-Channel Shopping

In select Macy’s locations, customers can use “smart” fitting rooms to see available colors, sizes and other information. They can also upload a photograph of an item they want on a new application that will search the store’s website for similar merchandise. This exemplifies a newer industry trend: omni-channel shopping, according to Rana and Poonam Goyal, a Bloomberg Intelligence analyst. Companies from Macy’s to Staples Inc. have expanded omni-channel shopping, whereby customers can seamlessly join online, mobile and in-store experiences.

U.S. retail sales dropped 0.3 percent in June, missing the median 0.3 percent gain forecast by economists in a Bloomberg survey. And U.S. store traffic fell 4.9 percent in July from a year earlier, according to ShopperTrak data.

“Customers still love to shop in stores, but they also want the convenience of the website and mobile,” said Demos Parneros, president of Staples North American stores and online operations. “It’s a key advantage that we have over the online only pure-play competition,” he said in a July 14 interview.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE