What do you think will be the big trends in Retail Technology as we exit 2014 and head in to the New Year? I have listed below 7 areas of technology that Australian Retailers need to be following closely; 3 areas to forget; and 1 to speculate upon. Let me know your picks.
1. Mobile Payments
As with so many other technologies, Apple has created new paradigms around Mobile Payments with the release of Apple Pay. While Apple Pay is not yet available in Australia, it is inevitable that Apple will come in to the market, probably in 2015. Meanwhile, Apple’s new solution has triggered other vendors to rethink and reinvest in their own payment technologies. PayPal is the key player to watch here, with the spin off from eBay planned for 2015 giving them a management team with a sole focus on payments. Other players such as Square are facing head winds from the big two, and will need to reinvent or remain niche players. As long as they remain non-compliant to PCI DSS Australia will remain a difficult market for them.
2. BigData
2014 has been the year that retailers started seriously investing in BigData. Moving forward, the retailer that is not collecting and analyzing all their customer interactions and using them to target their marketing will rapidly fall behind.
Simplifying access to loyalty schemes, combining online customer data with loyalty data and employing data scientists to analyze not just sales transactions but all customer behavior are key strategies that Australian retailers need to plan for in 2015.
3. RFID
RFID has not yet made a big impact in Australian retail, due to the cost of tags and the difficulty inserting them into the supply chain. However retailers in the Apparel category have embraced RFID overseas, and Australian apparel retailers should plan to follow suit.
Apparel differs from other categories with respect to RFID in two key ways: firstly, the creation of swing tags attached to apparel gives an easy point in the Supply Chain to add RFID tags without incurring too much additional cost; and secondly, for Apparel the benefits of RFID around Stock Management are significantly greater than other categories. The labour involved in counting stock of a fashion apparel item that in one fixture has several styles and numerous sizes is significantly higher than counting stock for other categories where generally a single fixture has a single SKU.
With RFID tags dropping to 5 – 10 cents per tag for quantity orders, and with new technology allowing the RFID tag to double as an RF security tag, there is a strong business case for RFID for Apparel retailers in 2015.
4. In Store Wi-Fi
In Store Wi-Fi and Wi-Fi hot spots are popping up everywhere. With Telstra rolling out public Wi-Fi across Australia customers increasingly expect to have Wi-Fi access wherever they go. Many Australian retailers have now launched In Store Wi-Fi solutions, as have the major shopping centres. The retailer that does not offer this service by the end of 2015 will be denying their customer what is increasingly seen as a basic human right.
5. Omni Channel
2014 has seen the arrival of true omni-channel retailing, where the online and bricks and mortar channels of retail are seamlessly integrated. “Click and Collect” ordering, in store “Endless Aisle” kiosk solutions, and a unified pricing and ranging strategy between the two channels are just three approaches that omni channel retailers are utilizing.
As 2015 progresses, the retailer that offers different products on-line from in-store, who does not support collection of online orders within the store, or who do not provide a method for store customers to easily generate an online order for unavailable items will be increasingly shunned by their customers.
6. Cyber Security
On the dark side, cyber security has become a major issue for retailers globally in recent times. In 2015, Australian retailers need to “stay alert, but not alarmed”. An analysis of the major retailer breaches in recent years shows the majority of leaks have occurred either through acquiring the credentials of a legitimate user, or by physically attaching equipment to an unsecured USB port. The traditional view of a hacker cleverly penetrating a firewall is not the technique the successful hacks have employed.
This means retailers need to be alert – ie reinforce basic security measures around user credentials including education, and locking down access to USB ports on publicly accessible hardware. However, they should not be alarmed – for example, an unconditional fear of all cloud based solutions is unwarranted, as the overwhelming majority of attacks have been on internal systems.
7. Beacons
Bluetooth beacons have now been around for over 12 months. While retail applications are still few and far between, this technology has the ability to be transformative to a retailer’s digital strategy. Retailers who are not experimenting now with beacons could easily get left behind.
Now for the technologies I predict retailers will trend away from.
8. Augmented Reality.
Fun to play with, but no-one has found a break-through application for AR. Woolworths had an interesting use case with their animal cards, but such instances are still more in the realm of novelty gimmicks rather than hard core uses of the technology.
9. QR Codes.
Maybe I’m a bit out there, but I believe the time for QR codes has come and gone. The technology that originally offered a method of communicating a number of different formats of information such as contact details or even pure text, only ever really got used to provide URLs to websites. QR codes are disappearing again from business cards, and I expect to see them disappear from other places over the coming year.
10. Google Glass.
A discussion on technology trends can’t go by without discussing the failure of Google Glass. Much hyped, loved by the techno-geeks, Google Glass is another technology that has failed to reach a wider audience. Wearable technology needs to be less obvious if it to reach the mainstream.
And one final speculation……
11. Smart Watches
Smart watches are appearing all over the place. Apple will release their AppleWatch early in 2015, and unlike Google Glass, consumers are used to wearing technology on the wrist – whether its an analogue watch, a medical alert device or a fitness monitor. I don’t know what the use case for smart watches in Retail will be, but only the naïve retailer will ignore this new technology rapidly emerging in 2015.
I hope my regular readers have enjoyed my posts during 2014. I wish you all a very happy and safe New Year, and I will return with more posts in 2015.