Retail and Technology – What Lies Ahead?

2013 marked the first year that online sales topped 1 trillion dollars worldwide. Brick and mortar stores have been feeling the pinch coming from the online market for years and continued to feel those effects over 2013. However, brick and mortar stores are far from “down and out” and a recent prediction from IBM confidently states that in 5 years time, brick and mortar stores will have fought back and become better than “etailers” can ever hope to be. Their prediction is based on emerging technologies such as augmented reality becoming mainstream and a seamless fusion of big data with daily operations in brick and mortar stores leading to a richer, more personalized and more engaged experience than a typical online experience.

Looking a bit closer than five years out, we have outlined some of the top technology predictions for the overall retail market for 2014 and beyond.

  • Optimization

2013 saw tremendous and explosive growth in the mobile sector and while everyone fully understands  the value of either a mobile or responsive design website, there is often a gap in linking these sites to the actual people behind the devices. Knowing that there were 3 logins to the website from a computer, tablet and cell phone can be helpful, but connecting those three logins to one customer, then optimizing that customer’s experience based on the combined history of everything they have purchased and viewed across all their devices will be the true measure of “optimization”.

Big Data is about more than just massive amounts of information; its real value lies in its ability to optimize and personalize the shopping experience to each individual customer. This true value of this type of “customer centric” marketing can best be summed by Daniel Druker (CMO of MyBuys) who notes “The idea of customer-centric marketing cuts across the major technology trends for 2014. It’s really about using technology to return to the early days of retail — when every shopkeeper knew each and every one of his or her customers as individuals — but at scale.”

  • Mobile technology

Optimization and personalization are likely to be critical areas of focus and development from a technology perspective and mobile technology plays a big part in these areas. A recent Zogby poll, commissioned by Cisco, found that more than 60% of tech-savvy shoppers said they would visit or shop at a store that offers smartphone apps and other in-store online services. Video chat, once the purview of “techies” may become a standard feature in stores. Being able to speak to a “real person” who can answer all product related questions can be a huge asset for any store, and adding that level of service without the need to stuff the store with additional people on the floor can make this a cost effective solution as well.

  • Automation

The convergence of big data and mobile technologies can also fuel movement in automation. In this case, systems “talking” to other systems will become widespread and lead to increased efficiency for retailers. Everything and everyone in the store will be connected, from shoppers on Wi-Fi to store associates, smart kiosks (that can actually recognize shoppers and have relevant data on hand for them), and RFD readers and video analytics to monitor real time inventory and respond. A low inventory detection system is one example of using automation technology. Using combinations of video, RFID or other advanced methods, the “system” will automatically trigger a workforce management task system to dispatch the right associate to begin replenishment before an item is actually out of stock. If the stock room is low or out of the item, inventory can be diverted from other local stores based upon their real-time inventory levels. The imminent arrival of a delivery truck will kick-off a sequence of activities to support the most efficient unloading process, and a shopper’s request for help via a kiosk or her smartphone will quickly and automatically dispatch the nearest available and knowledgeable sales associate.

  • Predictive analysis

The future may not be fully predictable, but from an analytics perspective, that may be changing as well. Retailers know the importance of utilizing repricing solutions (such as Wisepricer) that are fully connected to real time pricing and allow for responses in real time. Dynamic pricing is likely to remain a more attractive option to stores than predictive pricing; however there are many areas within the retailers’ setup that would benefit tremendously from predictive analysis. “RFID technology has the power to capture and analyze inventory data to optimize sales, improve processes and control losses. RFID inventory intelligence solutions are proven to reduce shrink up to 75%, increase shopper conversion rates by up to 50% and increase item-level inventory accuracy to 99%, which improves store merchandise allocation, selling floor availability, sales and customer satisfaction.” (Nancy Chisholm, VP & GM, Tyco Retail Solutions). Combining RFID technology with big data analytics may lay the groundwork for some truly predictive analysis. Knowing how much of something is needed, and connecting that data to what customers are talking about and what the real time pricing of the product is can lead to some exciting opportunities for predictive analysis. Retailers that can have the right combination of technology in place to capitalize on it.

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Arie Shpanya

Arie is the COO, Executive Chairman, and Co-Founder of Wiser, a dynamic pricing and merchandising engine for online retailers and brands. He has extensive experience in business development with a focus on eCommerce (eBay and Amazon), and is a guest blogger on Econsultancy, VentureBeat, and more.