U.K. retail and supermarket giant Tesco has a history of daring pilots with digital signage and other advanced consumer-engagement technologies, and it's added another chapter to that history with its latest trial.

Tesco recently teamed with tech firm Cisco for a digital pilot trialing an array of interactive technologies at three store locations across the U.K. The new customer-facing upgrades include a digital signage display that advertises clothing available through the retailer's F&F line, and a self-service touchscreen kiosk developed by Retec Interface where customers can peruse online items, use barcode scanners for product ratings, reviews and suggested accessories, and make purchases using chip-and-PIN.

The move to couple the kiosk and digital signage was intentional, explained Retec CEO Graeme Derby.

"The kiosk is there to sell a broader array than what they have in the store, and it allows people to order sizes that are out of stock," Derby said. "The 46-inch Samsung screen then acts as an attraction to direct people to the kiosk, which is linked to the POS."

In addition to the kiosk and digital signage, Tesco also is trialing the Kids StyleMe Mirror, a creation by C In-Store that uses augmented reality in hopes of engaging even the most uninterested shopper. In this case, a PrimeSense camera captures a child's image and overlays it with pictures of clothing selected through a gesture-based interface.

Wrapping up the tech-heavy digital pilot is Tesco's virtual mannequin that alerts shoppers to the upper-level location of the F&F clothing line. The mannequin uses hologram-based projections and audio to attract and seemingly speak to customers.

The combination of technologies such as the kiosk, mirror and mannequin drives engagement in a critical way: It brings the rich benefits of online shopping to the in-store experience, Derby said.

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"We have seen it in our own application. People are looking for a broader range and a way that brick-and-mortars can complete with online retailers," he said.

'Catch and keep' digital shoppers

Coinciding with the implementation of Tesco's new technology is Cisco's latest study that delivers extensive data on "how to deliver retail their way," looking at consumers' expectations and willingness to adopt new technologies.

The study found that 71 percent of shoppers want to access digital content in-store, and retailer touchscreens and shopper mobile devices are the preferred options.

In-store self-service is now the expected norm for consumers, according to the findings, with 85 percent wanting in-store self-service access to digital content. By contrast, only 4 percent of consumers reported a desire to receive help from store employees all the time.

And then there are the über digital consumers, which account for about 1 in 10 shoppers, according to the study. These shoppers are connected 24/7, and more than 90 percent use a smartphone or tablet to shop. They're predominately Generation Y, showrooming, deal-seeking addicts with a 60:40 male-to-female ratio. They are very interested in personalized digital experiences and willing to share more personal data. Cisco estimates that this subsegment leads the mainstream by 18 to 24 months in technology adoption.

Because 71 percent of consumers want in-store access to the types of digital content described above, retailers serving the mass market need to offer a range of mobile and touchscreen experiences and touchpoints, the study explained.

"It's now very clear, consumers prefer to shop through bits and bytes, with the majority of shopping behaviors and expectations shaped by online sources," said Dick Cantwell, vice president and global lead of retail for Cisco IBSG. "To shift shoppers into buyers, retailers need to merge online and physical services to meet the demands of today's digital shoppers."

Lisa Fretwell, director of Cisco's IBSG for retail, added that current feedback indicates a lasting and attainable ROI for those heeding Cisco's study findings.

"Cisco IBSG's pilot work with Tesco is a practical example of how retailers can turn the shopper insights from our latest research into a store implementation. The benefits for the retailer are additional sales both instore and online via the touchscreen order point, and the acquisition of new online customers from current store customers," said Fretwell. "Tesco customers have responded positively to the pilots and initial results suggest a payback of less than 12 months."

Tesco has been at the front lines of retail technology. In 2011, the company tested an augmented reality application that allowed users to generate a life-size 3D image of a product from its catalogue. They have used indoor positioning via Wi-Fi to help shoppers find their way around stores and offered remote QR code scanning in South Korea as an alternative to entering a retail location.

With the latest digital installation, Tesco has positioned itself even further ahead of the curve, Derby said, adding that "they are effectively putting a totally new concept out with how they will sell clothing."

Click here to see a slide show of Tesco's in-store technology. Photos courtesy of Cisco.

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