5 Reasons Self serve Automated Retail stores are the next generation pop-up shops.

The changing face of retail

Pop-up shops are on the rise and Automated retail is gaining acceptance at a high rate. It is worth studying the difference between these two retail concepts before a purchase decision.

Self service solutions aren’t new and with online shopping being so prevalent, the adoption of automated retail shops have been natural, customers see the product and can get it right away … instant gratification. Pop up shops have the same advantages, convenience and instant gratification, there are marked differences between these two channels however.

Should you consider an automated kiosk over investing in a pop up retail solution to extend your brand presence? Here are considerations to help your understanding of the two solutions:

1. Cost

The price of a luxury automated retail unit is likely less than the cost of a pop up shop, but the bigger factor to focus on are on-going resources required to run the pop-up shop. Instead of requiring employees to fill shifts, only support and merchandising services are required for automated stores – these tasks can range from 20 minutes to 1 hour weekly depending on stock replenishment requirements. The rest of the management on the machine is done online from a cloud-based back-end that informs on what is being sold and notifies in-advance when stock levels are low. The ongoing month over month costs of staff add up quickly. In comparison, the cost of maintenance, merchandising and support for an automated store is less than 20% of the cost of staff to run a pop-up shop.

2. self serve vs staff

The look and feel of the entire unit is customized to match your design. The touchscreen interface on the unit is customized to match your brand and product. Up-sell your customers, show them details, reviews, comparisons or promote products. All pricing and promotion decisions can be scheduled in advance and pushed to the unit online.

Customers are so savvy today that sales people need to be able to provide value. Customers desire useful information – whether reviews or detail descriptions, they want all the key selling points at their fingertips, and automated units provide these via an intuitive touchscreen. No annoying sales person, just the information they need. From the retailer’s perspective, they can be assured the entire customer experience, including the information served is consistent and always relayed to the client the way it should be.

Pop up shops

Let's not downplay that having sales staff can sometimes be a plus, but more then ever with the turnover of staff, it is difficult to get and keep well trained staff. It is also not uncommon to see staff constantly checking their smart phones between customers (not just the millennials anymore!). Good staff require ongoing training, and if this is available, then there is certainly value.

3.Loss prevention

In a pop up shop environment, the employee is the last line of defence when it comes to theft. Not all employees have a keen eye for spotting theft and may not be well equipped to deal with that sort of situation. Retailers have just come to accept there will always be a certain amount of loss from both external customers as well as staff. Not so with Automated stores, all your products are protected securely behind high quality glass. Cameras inside are used to support as well as monitor the merchandisers. All information on when and who opened the unit, and what was removed or placed in the unit is tracked. Inventory is safe and always accounted for. Many retailers are implementing units specifically for high theft item as loss prevention is challenging in any retail environment.

4.Maintaining Brand Consistency

At a Pop up shop, each individual sales person is unique and comes with their own personal style of presenting the brand, whereas a high-end retail vending machine will be able to display the language, presentation and imagery your brand wants to communicate with your target market your way every time. You have full control over the presentation of your brand, make changes as you wish with complete assurance your messaging will remain intact.

5.Creating a unique and interesting customer experience

Pop up shops are well designed and make a nice impact, however, landlords have set high rents for pop-up shops vs automated retail stores at malls, and it gets extreme at non-traditional locations such as airports, universities and train stations. More and more non-traditional locations are excited about adding high end vending solutions in their space. The cost of the space is substantially lower because of their flexibility. There is added value with adding a full size digital signage screens on both sides of the unit to enhance the marketing impact. Though this is valuable, landlords will allow you to market your products on these screens at no additional cost.

Summary

Clearly pop-up shops make more sense than brick and mortar stores in many cases as they provide the flexibility to set up where the customers are and they are cost effective in comparison. There is definitely a positive trend with more retailers deploying pop up shops, but now with automation and industrial dispensing solutions, there is proven and attractive option to counter the deep revenue cuts associated with the substantial cost attached to pop-up shops. Customers enjoy the positive experience they get from using an intelligent vending solution, it is partly the reason revenues are 4 to 12 times per square foot in these units vs retail stores. The overall sales will vary based on the product, but the costs to support these units are substantially lower, allowing for faster growth and deployment of new locations

As an aside, it is important to clarify that Automated retail machines are not the same as the old fashioned vending machines. Vending machines, even with touchscreens, are not very likely to get more than 3 to 5 k in revenues, whereas high end robotic based units will likely generate from 10K to 60k per month.

Signifi solutions works closely with retailers and brands to provide turnkey solutions that include branded premium automated shops, software, design, location finding and ongoing merchandising and support. Contact us today to see how we can help your company meet the changing needs of consumers.

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