This year we decided to ask some key executives from leading solution provider companies to share their insights on technology trends. These executives have many years of experience working in the retail industry. Each shares a unique perspective on the industry, covering topics such as showrooming, RFID, mobile, Big Data, clienteling and more.
Each executive was asked to answer the following question:
Which technology trend will impact the retail industry most significantly in 2013 (and why)?
(Responses are listed in alphabetical order by company name)
Respondents included the following:
- Joe Colopy, CEO, Bronto Software
- Dick Cantwell, VP, Internet Business Solutions Group for Retail, Cisco
- Ian Rawlins, Vice President, Retail Product Marketing, Epicor Software
- Wayne Usie, SVP, Retail, JDA Software
- Brendan O’Meara, Managing Director, Worldwide Retail Sector, Microsoft Corp.
- Paul Steinberg, SVP and CTO, Motorola Solutions
- Scott Kingsfield, Senior Vice President & General Manager, NCR Retail
- Andrea Morgan-Vandome, Vice President of Strategy and Solution Marketing, Oracle Retail
- Steve Topper, Business Solutions Architect, Pitney Bowes Software
- Lori Mitchell-Keller, Senior Vice President and Head of Global Retail Industry, SAP
- Lori Schafer, Retail Executive Advisor, SAS
- Tim Simmons, Vice President, Global Industry Marketing, Retail, Travel, Hospitality & Transportation, Teradata
- Mike Terzich, SVP, Global Sales and Marketing, Zebra Technologies
The retail industry is experiencing a momentous shift in consumer behavior, fueled by the ubiquity of smartphones. In the U.S. alone, 31% of online shopping traffic happens on mobile devices, according to research from Mobify.
While they are out shopping, consumers increasingly are using their smartphones to take and share product photos, search for nearest store locations, research products and prices online, and ultimately, make a purchase. Retailers have caught onto this and are making it easier for consumers to navigate, browse and cart products on mobile-friendly web sites. However, in 2013, I anticipate that the number of merchants accepting mobile payments will explode and consumers will start the move toward using “mobile money.”
Forrester Research and Aprimo recently studied the practice of “showrooming,” in which consumers use their mobile devices in stores to research a product and compare prices from another retailer or online merchant. A full 20% of online adults are practicing showrooming, and 33% of them say they ultimately used the information to buy an item from another store. With mobile payment on the horizon, this could spell trouble for many brick-and-mortar retailers who will increasingly find their sales cannibalized by these showroomers.
While price-matching is an obvious way for retailers to avoid losing sales to showroomers, retailers also need to seriously consider and develop strategies to attract and engage consumers on smartphones. Additionally, merchants must leverage tactics to build brand loyalty and value. Mobile versions of web sites and mobile apps are already well used. Near-field communication and location-based mobile advertising are on the rise, but until the technology and consumer acceptance are there, retail marketers ought to look for ways to optimize the tools that are already in their kits — mobile-optimized email and mobile messaging — to send highly personalized and targeted messaging.
Retailers will tell you that nothing is a better indicator of likely future purchases than what a consumer has already purchased. And this order data is more accessible than ever before. By integrating this transactional information with marketing platforms, retailers can segment shoppers based on product categories of purchased items and send personalized coupons, as well as relevant offers. Retailers also can use this information to send service-oriented messaging that speaks to previous purchases, such as reorder reminders, installation tips or customer service contact information. And many of these programs can be automated or triggered based on a consumer’s behavior or action, giving the marketer more time to focus on other innovative ways to build customer loyalty and combat showrooming.
Making past-purchase data part of a retail marketing strategy in 2013 is an imperative. The high-quality communications and service will be remembered the next time the consumer goes “showrooming.”
In 2013 mobility and “Big Data” analysis will have the largest impact on the retail industry.
Recent research from Cisco IBSG confirms that we’re now in an era of mobile commerce. Whether at home, on the go, or in a store, shoppers increasingly are accessing the Internet through smartphones and tablets for product research or to complete transactions. In addition, we’re now in an era of Big Data as a competitive advantage. Retailers now routinely gather both structured (POS, as an example) and unstructured (for instance, WiFi-captured store traffic flows) data, and are able to rapidly obtain new and deeper insights into consumption trends and shopper behavior.
Mobility and Big Data also offer retailers significant opportunities on the operational side of the business. With secure, enterprise-class WiFi in the store, managers no longer need to be tied to their desks, and associates can access task and time tools, as well as critical shopper-support information — including the same net-based data upon which shoppers rely. In the same way, the tools of Big Data analysis also can find long hidden inefficiencies in internal business processes, and help retailers save monies in labor and time in the supply chain.
What does this mean for retailers today?
- Robust, secure WiFi in the store is becoming a requirement: For the shoppers who are seeking Internet-based information on prices, ratings and reviews, they expect WiFi in the store. Shoppers in dressing rooms or in far sections of the store who would prefer to check out right there and then expect connection to the Internet. And of course, Generation Y-age associates who always want to be connected also want fingertip-access to the knowledge that will bring more sales. The next-generation store WiFi also is a tool for personalized experience and behavioral analysis.
Big Data opens the retail door to the “Internet of Everything”: What was envisioned in the early days of retail RFID now is becoming a fast reality: a responsive, real-time networked web of data flowing from things, people, and processes, reporting on decision-critical events in the business and driving efficiency and innovation. And it opens the door to new types of retailing. As consumers rely less on retail personnel and more on technology-enabled, self-service retail vending machines, micro-markets and virtual stores will create a completely new retail business model with what we call “Digital Malls.” These interactive, low-labor Digital Malls will grow in numbers in densely populated venues such as airports, universities, stadiums, resorts and larger workplaces. Consumers will be able to research and purchase merchandise while waiting for a train or flight, without waiting in line for a service representative.
Retailers should expect customer-centric retailing to continually gain steam throughout 2013. Over the last few years, there has been an exponential increase in the potential paths a customer can take in the buying process. Merchants will continue to strive to engage customers across the “splinternet,” a term referenced by many, including industry analyst firm Forrester, Inc. — and the devices that comprise it — looking to land the right strategy and mix of tactics.
The key to customer centricity is understanding that customers want to control how they interact with a retail brand, ultimately shaping a personalized customer experience. Today’s consumers want more from your brand than merchandise — they want to be inspired. For improved loyalty and profitability, retailers must engage customers to get them emotionally invested for the long-term.
Empowering and inspiring customers starts with providing access to a variety of information, such as product data, reviews, inventory levels, pricing, transaction history, loyalty point totals and special offers. In 2013, more retailers will extend this access to enable consumers to interact with and “socialize” with their brands via the next wave of social sharing networking sites such as Google+, Instagram and Pinterest.
During 2012, we saw many retailers building out capabilities to allow transactions at anytime from anywhere (e.g. via traditional POS, mobile POS, self check-out, kiosks, e-commerce, phone orders, mobile commerce), to support the customer-centric retail imperative. Now that the dust has settled, many are finding themselves saddled with the challenges associated with managing, modifying and migrating multiple systems — chief of which is the integration of customer data from separate, siloed systems. Next year, expect to see a concentrated focus on supporting a seamless transaction experience across all channels. To that end, many retailers may find themselves taking a step back, mapping those paths to identify the information and transaction capabilities that are required at each step to ensure they are meeting heightened customer expectations and have the ability to capture and leverage customer information across all channels.
What is the Holy Grail of the new customer-centric retail paradigm? Retailers now engage customers in executing the buying process in the customer’s preferred channel, and on the customer’s terms. If successful, a retailer is rewarded with the customer’s loyalty, and can leverage the insight gleaned from the customer’s interaction(s) to further personalize the shopping experience. In doing so, the retailer is equipped to deliver relevant, tailored experiences that meet that specific customer’s needs. Retailers that can do this will be positioned for success in 2013 and beyond.
In 2013, we will see continued interest and investment in two types of technology:
1. Clienteling solutions to empower store associates: When customers walk into a retail store, their shopping experience determines whether they will make a purchase in-store or use the store as a showroom. Store associates today need smart applications to give them customer-specific data — such as order history and buying preferences — and empower them to make decisions for customers that also are profitable for the retailer.
In the back-end office, retailers must build profitability rules and automate the administration of those rules to every unique transaction. For instance: What options or incentives are available to a premier customer? For a new customer? For a high-dollar transaction? For a high-margin transaction? On the store floor, associates must have the ability to look up inventory and customer information via mobile devices that ultimately help customers make their in-store, online and/or mixed-channel purchases.
In other words, rich clienteling solutions help retailers move past “one size fits all” programs that are myopic and erode profit margins, including “low price” and “price matching” strategies, and enable store associates to engage with customers personally to drive sales, satisfaction and return trips.
2. 3D visualization to increase retailer-manufacturer collaboration: Over the past few years, heightened consumer expectations have raised the bar dramatically for retailers and manufacturers alike. Close collaboration and synchronization across the extended retail and manufacturing value chain has now become a vital necessity. With a growing need to configure assortments down to the local store level, retailers and their suppliers are turning to visualization technology to create win-win business strategy.
For retailers, 3D technology is a dynamic and cost-effective way to test new store designs, understand shopper behavior and introduce new products or promotions. For manufacturing companies, 3D technology can be used to perform shopper research without actually sending product prototypes to the retail store. In fact, leading manufacturers have invested in 3D visualization to simulate different shelf configurations for their products in order to deploy the most effective combinations possible. If showrooming is here to stay, these manufacturers want to make sure that their products are displayed to create the best showing and their supply chains are designed to deliver the best availability.
As we’ve seen in the last few years, the consumerization of IT and customer expectations are now the driving force behind most technology decisions at retail companies. Staying competitive has meant truly putting customers at the heart of their business and staying connected with consumers’ shopping behaviors, preferences and expectations.
This holiday season, we’ve already seen how retailers have gotten more tech savvy to engage customers and offer more flexibility in how they shop, with holiday shopping apps across the phone, tablet and PC, in-store modes for mobile apps, and in-store pick up options for online shoppers. As the lines between traditional and digital channels continue to blur, we predict several technology trends in 2013.
Engaging Your Customers
- Integrated multichannel retail capabilities, strategies and management solutions are poised to have significant impact on the industry, as more retailers move to make omnichannel a reality. With consumers having increased options for how and when they shop, retailers need to deliver a seamless customer experience across all their channels. Optimizing and integrating their shopping channels as part of a single strategy for driving compelling customer experiences has become a must.
As retailers look to better connect with their customers through more relevant campaigns, integrated marketing and digital campaign management solutions are of increasing importance to dynamically manage content across digital channels and measure and optimize ROI on their digital marketing investments. Integrated marketing management solutions combine marketing resource management and multichannel campaign management into a combined executional, operational and analytical process that optimizes marketing impact and returns.
Knowing and Serving Your Customers Better
- Predictive analytics and big data will be another technology focus area in 2013. In order to remain competitive with a growing variety of shopping alternatives, retailers must seek new ways to deliver the most value, revenue and loyalty. To do so, they must harness the increasing volume and availability of data using technology to process large amounts of data into meaningful reports and insights as quickly as possible.
For example, Hy-Vee, a Midwestern supermarket chain, partnered with Microsoft to help analyze its transactions, more than 800,000 per day, in order to gain insight on customer behavior. The technology has allowed them to give their employees access to reporting data quicker and help them make better predictions using historical data. The old adage goes, ‘the customer is always right,’ and with new technology retailers can more accurately determine what they want.
Engaging Your Employees
To help improve operational efficiencies and productivity, we are also seeing increased interest from our retail customers in cloud computing solutions like Microsoft Office 365 and SharePoint Online. With the continued tight economy, the cloud provides cost-effective solutions for retailers to run their business more effectively by optimizing and streamlining operations. It also helps deliver modern productivity tools to deskless store employees.
A cloud-based Store Employee Portal, for example, can easily provide personalized access to the information each employee needs to complete their critical sales, inventory and customer service tasks from any device or location. Faced with increasing online competition, retailers must deliver differentiated and superior in-store experiences that leverage their people. To do that, they must engage their employees by providing the modern sales, social, and collaborative tools they need to best serve customers and the business.
2013 is poised to be an exciting time for retail. Today’s technologies can help retailers address the dynamic and multichannel retail environment. By embracing technological change, savvy retailers can meet the changing demands and expectations of consumers, ensure smart and successful business operations and be in a position of strength to adapt and grow as needs change.
The intelligent store will be one of the most significant technology trends that start to emerge in 2013. Forward-looking retailers will implement technologies that will personalize their customers’ shopping experiences and enable sales associates to be better informed and connected with customers. In turn, organizations will be able to efficiently reduce the one-third of visits that end with shoppers leaving without making their intended purchases.
In a recent Motorola Solutions retail survey, 74% of responders indicated that developing a more engaging in-store customer experience is going to be business critical in the next five years. Retailers with brick-and-mortar stores can have an incredible advantage if they can create the right experience and product mix for their customers. And one of their primary drivers for investment in technologies is to improve customer service by moving towards mobile and social solutions.
By deploying technologies to mobilize store associates, retailers will enable employees to better serve customers. When every associate has a smart communication device coupled with an intelligent store infrastructure, they can answer customer questions in seconds, find stock in real time, and check customers out on the spot leveraging a mobile point of sale solution.
Shoppers are highly mobile and retailers need to catch up to meet their expectations. One of the fastest growing strategies for brick-and-mortar stores is to connect with shoppers by providing guest access to their WiFi networks to personalize the experience on their smartphones. Using geo-fencing and presence technologies with customer-facing applications, retailers can recognize the location, identity, activity and time related to individuals and products. With this information, they can generate intelligent events such as sending mobile coupons or personalized discounts.
Smart retailers will use omnichannel strategies to give customers a seamless, consistent experience, whether it’s in store, online or through a mobile device. By integrating in-store and online operations, they will continue to enhance their knowledge and understanding of customers through integrated data collection and analytics.
The intelligent store will bring multiple benefits to retailers including better-informed associates and a personalized experience for their customers. It will help them drive revenues by doing what they do best — give the customers what they want and keep them coming back.
The retail industry’s most significant technology trend in 2013 will be matching up shoppers’ desires for a consistent brand or omnichannel retail shopping experience driven by technology solutions that retailers are deploying at an increasingly rapid rate. We’ve seen an omnichannel retailing explosion driven by technology on both the shopper and retailer side: order-online/pick-up-in-store, in-aisle scanning with personal cell phones or store-provided devices, mobile payments, online and mobile-based loyalty programs, personalized and electronic coupons, mobile POS, QR code deployment and other technologies. And as retailers become more agile with deployment and integration of different solutions, and shoppers and retailers become more comfortable with new ways to serve and shop, we expect this trend to continue.
NCR recently concluded a ground-breaking global study of shoppers and retailers and found some surprising results. We surveyed shoppers in nine countries – the United States, Canada, France, the United Kingdom, Germany, Japan, Spain, Sweden and Italy. In the survey, we asked shoppers what technology-driven solutions they were interested in using. Then we studied major grocery and non-grocery retailers in those countries to see what kind of technology driven solutions they were offering. We found many areas of alignment – where retailers were offering the solutions their shoppers were asking for and were eager to use. But we found areas where shoppers were asking for services retailers weren’t offering or retailers were offering services shoppers weren’t using. For instance, in the United States, 80% of grocery shoppers say they want access to electronic coupons, but we found that only 35% of U.S. grocery retailers were offering electronic coupons.
There were also interesting differences among the countries that highlighted various levels of shopper and retailer technological adoption in different countries and also some cultural differences that seemed to impact what shoppers were asking for on the omnichannel retail front.
So as technology continues to impact shopping, the biggest challenge for retailers will be to understand what technology solutions their shoppers are asking for. This will allow retailers to offer those solutions in ways that create exceptional customer service experiences for the shoppers and creates value for the retailers in up-selling opportunities, repeat visits, loyalty and other areas.
NCR will be presenting the findings of this survey at NRF. The session, “Beyond Multi-Channel Retailing: What Global Consumers Say They Really Want in a Multi-Channel World,” will be held at January 14 at 1 p.m. during NRF. The presentation will deliver a strong point of view about how retailers can leverage these shopping trends and new ways to serve customers into an opportunity that drives business success.
A new generation of mobile analytics is at the forefront of change this year. We are emerging from three consecutive years in which consumers adopted smartphones in record numbers and used them to bridge desktop and in-store shopping. Retailers are moving quickly catch up. Recent advances in business intelligence, among them the ability to tap multiple sources and deliver to a mobile device in real-time, place line managers on more equal footing and equip them to better engage the omnichannel shopper.
These more modern analytics are by nature found in the hands of users. This is a far cry from requesting and waiting for reports, then building your own Excel sheet. Instead, companies are taking a self-service approach that frees staff to ask questions and get immediate and usable answers – then reshape their questions and dig deeper. Further, predictive analytics empower decision makers to anticipate and understand results from an operational perspective, a sales performance, or customer service point-of-view.
It is this later capability that is especially compelling in the immediate context of omnichannel retailing. By merging self-service BI tools with predictive analytics to sift through big data, line managers are armed with the tools they need to improve daily decisions around promotions, pricing, staffing, replenishment and seasonal buys.
In terms of usability, a key development motivating rapid adoption is simply making analytics mobile. For store and line managers already using their tablet and mobile device for just about everything else, providing role-based analytics on the go will help change the way retailers work.
As retailers move quickly to an omnichannel reality, retail analytics will be at or near top listing among technologies delivering the most impact. BI is an interactive process, and retailers are equipping people to get accurate, real-time answers on their own.
The smartphone may not seem like a particularly new development (more than half of Americans have one), but for retailers it may be as only about 20% of consumers are using smartphones for shopping. As such, retailers are only just coming to grips with how they handle mobility, and this will be an enormous technology issue in 2013.
We’ve been hearing for a while that “e-commerce is dead, long live omnichannel” and there is a general awareness that the physical and online are melding together. For the traditional retailer which still interacts with consumers in a brick and mortar store, working across the mobile channel while the customer is in store is imperative. NFC technology for loyalty programs and mobile payments will make the mobile device a natural and pervasive component of the in-store experience and customer loyalty in general.
Consumers will see time-sensitive deals sent to their phone when they are in or near a store, either through mobile ads, e-mail or SMS. This will be a popular mechanism for retailers to encourage cross-shopping within other store departments, instead of having the consumer leave the store with just one item or category in their shopping bag.
Accurate customer data is imperative as the first building block for effective in-store and “in-device” interactions. In addition, it requires complex analytics to enable the right message to be delivered to the right consumer at precisely the right time and place. As a result, real-time decisioning tools will be in high demand as retailers seek to ensure that they are sending successful customer communications.
The mobile device will be increasingly important on the retailer’s side of the counter in store locations. By the end of next year it won’t be a novelty to see store employees clutching tablets and smart phones to help them service customers. The retailers that successfully deploy this new technology will be those that are able to arm their employees with prompts on these devices that help them improve the consumer’s experience and boost sales.
Last year, Forrester declared 2012 as the Year of the Customer: the social/mobile customer to be exact. At SAP, we agreed. More than ever before, customers were more empowered through social channels, feedback mechanisms, 24 x 7 access to information, price comparison data and “deals.” In fact, consumers have become more comfortable sharing information digitally and online than most will in person. While retailers all had an eye on the customer in 2012, how we take action based on this vast amount of customer information across channels will be the focus for 2013.
Aside from historical transaction data already in-house, retailers now have access to an amazing amount of social data. This unaided information allows retailers to get a glimpse into what customers want in terms of offerings, marketing promotions and services, which products work and which don’t, what offerings customers want in the future and even when and how they plan to spend their money.
The opportunity for retailers is in finding the right tools and technologies to pare down and analyze data, get more granular and then define proactive campaigns to maximize customer interactions across all channels — a true multichannel approach based on real data. This strategy, which combines the power of predictive analytics with the ability to personalize the shopping experience for individuals, is key to getting closer to customers, driving purchases and increasing revenues.
Already today we can gather and analyze social data. We can target promotions to select customers based on purchase data. We can personalize online marketing messages based on search history. The retailers that are able to integrate all aspects of that data into actionable and relevant campaigns that anticipate and deliver on customer shopping needs will be the big winners in 2013.
Mobility is the Big Trend to Watch in 2013…In the United States, we work from laptops to get to the Internet; we take that technology for granted. But most of the people in the world don’t have a PC. Most people get to the Internet through a mobile device. In retail, whether you’re educating a customer about new merchandise through Twitter on a tablet or helping a customer pay using just a smartphone, the future is all about mobile.
The retail world is changing rapidly, and there are five corporate innovators who are pushing that change. Amazon, Apple, eBay, Facebook and Google, also known as the “Tech Titans,” have driven sweeping change across many industries using technology. A few years ago, each of the Titans had its own niche: Amazon was an e-tailer, Apple made and sold personal computers, eBay hosted online auctions, Facebook built a social network, Google was a search engine. That’s no longer true, and mobile technology is one of the things that’s helping the Titans blur traditional industry boundaries.
Several examples of mobile technology taking center stage for the pacesetting Titans include:
- Apple’s iStore payment system is one example of Titan mobile innovation. With iStore, a customer can walk into a retail store, scan the barcode on a product using a their phone’s camera, pay through an iTunes account, and walk out with the purchase, skipping all traditional check-out procedures and staff. Schafer views Apple as the best omnichannel retailer in business today.
- eBay has made hefty investments in mobile technology through $5 billion in recent acquisitions. Its PayPal system, for example, is already showing mobile promise. The Home Depot, one of the largest traditional retailers, now offers a PayPal “mobile wallet” option at every check-out counter in each of its stores. Twenty other retailers are scheduled to follow in The Home Depot’s footsteps. eBay also is piloting a same-day delivery service that uses mobile technology.
- Facebook is becoming more mobile friendly. The social network company has collected an unequaled treasure chest of consumer sentiment data at a pace unknown by more traditional ratings and sentiment tracking companies. Facebook is poised to cash in on its valuable consumer data cache with marketing and advertising companies that want to reach consumers through all communication channels.
The Titans are breaking and reinventing all the rules for retail, communications, financial services, entertainment, travel and technology services. And mobile technologies are especially important to their success. The Titans incite retailers to jump on their progressive bandwagon or miss opportunities to engage discerning consumers who will seek out the competition — often from the showrooming convenience of a mobile device — if their expectations aren’t quickly met.
Mobile clearly will be the largest trend going forward into 2013. I fundamentally believe the overall visit and use cases for mobile have truly taken shape in the market and will quickly move forward and aggressively roll out in 2013 and beyond. It “seemed” like in late 2011 and early 2012 technology was being disruptive: Retailers were working hard to understand how mobile adoption would take shape and how it could be used in brick-and-mortar environments. I believe that, by and large, the uses are now “known” and are moving forward. There are four general strategies for using mobile technology that retailers are finding business cases for:
• Managerial functions
• Associate functions (endless aisle, customer experience, etc.)
• Mobile POS
• Back office applications
However, there may be a fifth one developing: consumers using their personal mobile devices to complete in-store transactions.
Beyond mobile, other trends I see moving quickly are: adoption of item level RFID, wireless infrastructure technology & VoIP applications.
Tim Simmons, Vice President, Global Industry Marketing, Retail, Travel, Hospitality & Transportation, Teradata
It’s an old truism that retail starts and stops with the shopper. Understand why shoppers behave the way they do and you can inform and influence their shopping behavior . Influence their buying behavior and you can get them to spend more at your store and less at your competitor’s store. Sales go up, out of stock go down and all stakeholders are happy.
Unfortunately, shoppers are fickle and unpredictable, and they are constantly changing their minds and the way they shop. The advent of mobile marketing adds to an already crowded mix of options for information that includes television, print, Internet and more. This makes the retailer’s job of buying what is going to sell less intuitive and more dependent on data-driven insight.
The question has become “How can I better understand and engage the shopper?”
It is clear that the omnichannel world of retailing is requiring marketers and merchandisers adjust the way they attack the point where there is a consumer interaction. They need to message and promote to that segment of one to gain ultimate relevancy. And along the way they still need to do the basics of adjusting assortment to local market, optimizing replenishment and anticipating challenges throughout the supply chain.
While there is no panacea for this new world of retailing, there is something that’s close — a Big Data approach that integrates traditional sources of information like the transaction log and ASNs with social media and other unstructured data to give the retailer a quick and true picture of the business. By providing the marketers and merchandisers with the technology that delivers a full view of the potential impact their programs will have on sales and profits, retailers can close in on the goal of giving shoppers what they want, when and where they want it.
Innovative retailers will use Big Data analytics to derive intelligence from the new and emerging data types that had previously strained their systems. While creating the new applications for analysis of multi-structured data requires a strategic investment in specialized resources and tools, the payoff is immense. The technology will help brick and mortar retailers to effectively combat the challenges of showrooming. It will help e-retailers enhance their personalization of offers to customers. And it will help multi-channel retailers cross-sell a mobile shopper who happens to be in a physical store.
Using advanced analytics technology is critical to leveraging data to improving the promotional interaction with shoppers. The use of a data warehouse to analyze both structured and unstructured data is critical for all retailers with the goal of being the store of choice for shoppers. By using Big Data analytics to better understand behavior, retailers will optimize the way they go to market with an increasingly on the channel worlds this is important because shoppers are not committed to a specific store or online retailer-they will go to wherever their needs are met best.
Big data presents both an opportunity and a threat to retailers. Those companies that are able to capture and analyze complex data streams to extract new insights with precision will have a major advantage over their less-informed competitors. On a positive note, I believe more retailers will realize the need to integrate the varieties of data to create insight for personalized experiences on any and every channel.
The use of RFID technology is picking up speed, with a number of major retailers making commitments and launching aggressive projects over the past few years. With RFID, every item — and customer — counts, leading to improved inventory management and more compelling customer experiences.
Today the world’s top retail companies are using RFID technology because of the big benefits it offers in inventory management. Retailers’ sales are only as good as their inventory. While some merchants think they have 95% inventory accuracy, the reality is much closer to 60%. RFID drastically improves inventory management through item-level tagging. With item-level RFID tagging, a retailer’s products can be tracked as they move from the storage room to the shelves, and from the fitting rooms to cash registers.
Using RFID, store employees and managers can precisely locate an item for a customer and improve the shopping experience. But the technology also provides important data for the retailer. Data collected from tracking an item throughout the store can give the retailer insights to optimize store layout and product merchandising. Precise inventory numbers also permit “just-in-time” inventory ordering practices that lower warehouse costs.
RFID technology in the retail space is well known for use in item-level tagging. However, some forward-thinking retailers are realizing other benefits: using it as a way to create a compelling and differentiated in-store experience.
In fact, RFID has the power to create a very personalized shopping experience. For example, as a shopper enters the fitting room, she can choose the music she’d like to listen to while she tries on clothes and an RFID-embedded loyalty card will remember the playlist for her next visit. Or, as a customer tries on an article of clothing, smart shelves “read” what she’s trying on and display other apparel or accessory suggestions on fitting room screens.
Additionally, the technology provides visibility in other ways — it helps the retailer know the shopper — what she buys and what she wants to buy. On the backend, RFID technology provides the retailer with data on which stores are selling which products to make sure inventory is available when and where it’s needed.
RFID today offers retailers much more than inventory counts. It is helping create a richer shopping experience. Every day, events occur in retail: assets are used and transactions take place. Those events constantly create data. Going into 2013, those retailers who can harness this information will form new insights — from creating more appealing store layouts to understanding a customer’s preferences on how they are approached as they enter store — that help them drive innovation in brick-and-mortar locations and beyond.