9 Tech Trends Transforming Retail
The retail industry's reputation as a technology laggard is beginning to change, say experts.
With the continuing evolution of mobile and other technologies, the shift to omni-channel strategies and continuing evolution of fraud, retailers are looking to technology advancements in 2015 to help them transform their businesses, according to industry experts.
Here are nine of the most significant retail technology developments, in no particular order:
In-store Mobile Tech Advances
As customers continue to use their mobile phones while shopping, retailers will look to provide a differentiating in-store experience, says Ben Pivar, senior vice president of North American retail for Capgemini. He predicts Beacon technologies will continue to gain momentum as retailers look to personalize the in-store shopping experience to compete with online retailers. The competition strategy includes providing cashiers with mobile point-of-sale (PoS) systems that free them from being anchored and allow them to spend more time on the shop floor.
Privacy Concerns Yield New Data Approaches
With an increasing number of consumers opting out of sharing their personal data due to privacy concerns, retailers will need to harness the power of analytics in new ways in order to gain consumer insights and effectively target customers, Pivar says. Aggregating data to create customer profile "clusters" will enable retailers to personalize customer interactions and provide targeted offers even to customers who may block the use of their data.
Retail Analytics Go Local
Retailers will explore use of data for localization to manage inventories more effectively, increase revenue and improve margins by creating the right product assortments for the right stores according to local customer demand, store attributes and product preferences, according to Capgemini. Advanced analytics will also play an increasingly critical role in the design and development of new products, initial pricing decisions and demand forecasting.
Trying to Get Omni-channel Right
While many traditional retailers have invested in technology to support omni-channel strategies, many continue to struggle to offer a true omni-channel experience and capture a single view of the customer across channels. One of the biggest mistakes retailers make is investing in this technology without changing their organizational structure, failing to break down the traditional silos that create barriers to the effective use of these systems. An example: failing to change who gets credit for sales, which increasingly crosses channels. Many retailers in 2015 will focus on moving organizational silos and adopting new organizational structures and processes to better support omni-channel.
Use of Cloud Technologies Increases
As mobile commerce continues to increase, so will the use of cloud-based technologies, says Ken Sickles, vice president for product and strategy and strategy for 1WorldSync, Princeton, N.J. Retailers can’t just cobble mobile ordering, customer data and other mobile information on top of old back-end technology systems that many companies have been using since the 1990s, Sickles explains. Prior to the onslaught of mobile, retailers ran separate systems for online and for brick-and-mortar sales. So they need to upgrade to systems that will handle the omni-channel experience.
"Cloud-based systems are quicker, cheaper and have the ability to meet the needs of the connected consumer; they use a single system to combine all channels," Sickles says.
Retail Product Data Explodes
Thanks to the proliferation of smartphones, consumers enjoy access to more information than ever before. So they want to know whatever they can about a product, from warranty specs for a washing machine to detailed nutritional and source information about food products, Sickles says. Today retailers may not have all of this information, so they are asking suppliers to provide more attributes about products.
The additional data will challenge retailers in terms of storage, organization and management, Sickles adds. Retailers will be looking for ways to solve these challenges.
Integrating eCommerce and Shipping
In-store pickups for online purchases grew 15 percent in November, and will grow again in 2015, says Jarrett Streebin, CEO of San Francisco-based shipping firm EasyPost, adding that demand is also increasing for same-day delivery of items shipped to consumers and to businesses. Amazon, Walmart and other companies are promising same-day delivery on goods, adding some of their own vehicles to augment the fleets of companies like FedEx and UPS to ensure there are enough vehicles for rush times.
"Getting it there at the promised time is becoming more of a big concern for retailers," Streebin says. "They want to make sure they only promise same-day deliveries that they know that they can make."
Loss Prevention Tech Gets Better
Protection against shoplifting has been an issue ever since merchants started selling goods. Thieves are getting more creative, so retailers must do so as well, says Sean Curran, director of infrastructure and operations practice for Chicago-based consultancy West Monroe. Beyond loss technologies already in place, retailers are starting to look at technologies that leverage facial recognition to recognize people re-entering a store multiple times, and those that analyze data on repeat customers to see if there is any correlation with loss statistics.
Mobile Device Identity Fights Fraud
Companies will use mobile devices and location as a proxy for identity. As consumer adoption of mobile devices approaches 100 percent, a consumer’s mobile device becomes more useful than passwords, physical identifications or other traditional mechanisms to verify identity, predicts Chirag Bakshi, founder and CEO of Zumigo, San Jose, Calif.
Fraud costs run in the billions of dollars every year, Bakshi says. So retailers will adopt device identity to reduce fraudulent online transactions. By verifying the ownership data of a mobile phone against the transaction information, merchants can quickly confirm valid credentials, Bakshi explains.
Retailers will also adopt mobile device location to reduce location-spoofing transactions utilizing stolen card data. Recent data breaches have put millions of records into the black market. One of the most effective methods of identifying a fraudulent transaction is knowing that location spoofing is being used. Verifying a mobile phone against an IP ensures that spoofing is not occurring, Bakshi says.
Phillip J. Britt writes for a number of technology, financial services and business websites and publications, including BAI, Telephony, Connected Planet, Savings Institutions, Independent Banker, insideARM.com, Bank Systems & Technology, Mobile Marketing & Technology, Loyalty 360, CRM Magazine, KM World and Information Today.