Three years later, beacons do not appear to have made the impact in retail their initial hype suggested. What are the limitations that have appeared, and does this mean that retailers should ignore beacons in their technology plans?

Issue #1: Transmission Range

Beacons are often reported as transmitting “up to 100 metres”. The problem is, this range is extremely variable. For example, placing your body between the phone and the beacon immediately reduces the power received from the beacon, and makes the beacon seem further away. Also, different phones will register different distances for exactly the same beacon, due to the quality of the phone’s Bluetooth radio. In one test comparing an iPhone 5s with a Samsung Galaxy, the Samsung recorded it distance as 2 metres when the iPhone thought it was at 6 metres.

Since much of the logic in the various micro location services depends on calculations derived from the distance of each beacon, it can easily be seen that the variability of range will result in an inaccuracy of location.

Issue #2: Variability of Signal Detection

Beacons transmit on a regular frequency, typically between 1/10 of a second and 1 second. However, the phone does not always detect each transmission. Apple, for example, apply some fuzzy logic around this: they assume you are still within range of the beacon until no signal has been received for 20 seconds. As a result, often the beacon values the phone app queries are sometime 10 to 15 seconds out of date. For a user who is moving, this results in further inaccuracies.

Issue #3: App Based

To respond to beacon detection, an app must be installed on the phone and registered to the identifiers of that beacon.   Mobile web pages cannot provide the same response. Any retailer wanting to use beacons effectively has first to convince their customers to install the retailer’s app on their phone.

Issue #4: Battery Impact

Scanning for beacons definitely results in a more rapid consumption of the phone battery’s charge. Apps need to be very well designed to ensure that when they use beacons, they do not jump to the top of the phone’s list of energy consuming apps. Customers will quickly delete an app they perceive to be draining their battery.

Issue #5: Spoofing

When using beacons, it is very important to understand there is no security or identity enforced on beacons. Anyone can install a beacon detection app such as Locate that will provide all the identifiers used by a given beacon. It is then a simple matter to create you own beacon transmitting the same identifiers. Therefore it is very important that beacons are not used in a scenario where a spoofed beacon will cause privacy or security issues for the customer.

So does this mean that retailers should avoid using beacons? Not at all. Beacons can be very effectively used to enhance the customer’s experience when using a retailer’s phone app. For example, beacons can be used to identify when a customer walks into a store, and perhaps send a message to the store manager that a VIP customer is approaching. In larger department stores or shopping malls, beacons can be used to provide greater location accuracy than GPS (often ineffective within buildings), as long as the potential errors are understood. The accuracy would be sufficient, for example, to provide a customer with directions from where they are to where they’d like to go. It is not sufficient to reliably identify that a customer is near a specific merchandise display.

Bluetooth Beacons have not lived up to their initial hype. However, the astute retailer should still be including beacons in their arsenal of digital tools to enhance the Customer experience.

Despite the Innovation agenda of Australia’s Federal Government, the digital services provided by the Government actually teach organizations more about how NOT to do digital rather than serving as a shining example..

Last Sunday, the Australian Tax Office’s website was down for the entire day.  Apparently this was for scheduled maintenance.  No backup site was available, and despite the fact that the majority of the site is static content for informational purposes, the outage was total.  No message was given to indicate the duration of the outage.  Continually trying to access the site throughout the day, my last attempt was at 8pm, with the site still not available.  (Note:  Despite the above message, the ATO service was also unavailable via MyGov)

The ATO’s business portal, allowing companies the ability to log in to complete their Business Activity Statement (BAS) is also problematic.  It relies on a clumsy certificate based authentication, which makes it difficult to access the portal from different computers.  Anyone trying to access the portal from a Mac computer is in for a world of pain.  A long thread on Whirlpool lists over four years of frustrated Mac users trying to access the system.  Hint:  To make it work, you actually have to set your java settings to “run in unsafe mode”.

And then of course there’s Census 2016.  The Australian Government achieved global headlines for all the wrong reasons with their Digital approach to collecting the census on August 9.  Various expert assessments of the debacle, such as a report by the University of Wollongong and the blog of security commentator Patrick Gray, outline the multiple errors made both in the planning and the execution of the census.

So what can we learn from the Australian Government’s mistakes?

Firstly, user experiences and ease of use are vital for any digital service.  The appropriate balance between usability on the one hand and security & privacy on the other hand needs to be found.  A more successful example from the Australian government is MyGov, where authentication Is managed by two factor authentication:  a user defined password, and a one-off token sent via SMS to the user at login time.  This is simple to use and portable, while remaining secure and private.

Secondly, digital services need to be available as close as possible to 24×7.  Use of mirrored production environments, allowing rolling updates rather than outages, should be a standard technique.  Similarly, continuous integration should replace major upgrades, minimizing the impact of each update and the corresponding interruption required.

Thirdly, when things go wrong, the provider of the Digital Services needs to be on the front foot, identifying the issue and providing reassurance.  The contradictory messages from the ABS and the responsible Minister in the 24 hours following the census debacle served to add to customers’ anxiety and further reduce trust in the platform.

Digital access to services is increasingly the way of the future.  The successful digital service provider can learn a lot by reviewing the Australian Government’s misadventures.

The IT leaders of many Retailers are reviewing their team’s capabilities, and are re-investing in the skills associated with Software Development.

A maxim of 1990’s and 2000’s IT departments was “Buy not Build”.  As the cost of developing software increased, and the availability of resources became scarce, buying a software package made more sense than building it yourself.  After all, no-one builds a car from scratch.  Conceptually, fractionalising the cost of development over a number of customers would be more economical, even with the software company taking a clip of the ticket, than each customer building their own.  For Retail organisations, software engineering was not a key capability, and they were happy to effectively outsource software build to others.

On the back of such logic, products such as SAP became hugely successful.  Retailers developed integrated platforms, generally consisting of a major ERP, several additional Merchandising packages, and a Warehouse Management System or two.  The IT team’s efforts became focused on configuring, integrating and support such packages, and the need for software development skills declined.

However, as the demand on IT departments continues to increase, technologies become more advanced, and the ever downward pressure on costs cuts in, many retailers are experiencing a series of issues

• Embarking on a project to replace (or even upgrade) one of these monolithic systems is expensive, time consuming, and not very rewarding for the company
• Ongoing license maintenance becomes an expensive part of the IT budget, often with little return. How often do you actually call the vendor’s support desk?
• No matter how configurable these systems are, they constrain the businesses operations and processes in ways that are often resisted by companies
• Often retailers find they have swapped an army of computer programmers for an army of package specialists, not delivering the promised IT savings

Against this backdrop, advances in technology have made software development much more accessible.  Significant trends that are emerging to achieve this include

Agile Methodologies

The introduction of Agile methodologies and techniques have transformed the way software development projects are achieved.  Agile gives back control to the Business over the development process, and by keeping the User Experience at the forefront of design, results in products more appropriate to the true needs of the end user.

Continuous Integration

Closely linked to Agile methodologies, new tools and techniques for continuous integration of software changes into the Production environment are making iterative approaches to software development more successful, and de-risks the impact of software changes

Cloud Computing

Utilising Infrastructure As a Service (IaaS) and Platform As A Service (PaaS) allows developers to focus on the functionality of their software, not the mechanics such as servers, databases, queues, storage or archiving. 

Open Source Software

The availability of open source software, allowing the developer to quickly put together a solution by building on easily available blocks of functionality, simplifies and accelerates the development process.  The rapid response to questions and support queries posted on Open Source forums such as Stack Overflow or Github puts the support organisations of any conventional software vendor to shame.

API standards

Finally, the standardisation of API technologies has made component based software a reality.  POST, PUT and GET messages over HTTP are now routinely used to allow software components to access each other’s functions, and protocols such as JSON and XML have standardised the representation of the data included in these messages.  This means that plugging together sofftware modules from diverse sources and technologies is simple and efficient.

Its true that no-one builds a car from scratch.  However, when you build a house, it is acknowledged that prefabrication is rarely effective.  Houses are designed for the specific plot of land on which they are built, and for the individual needs of the purchaser.   Some components such as roof trusses may be built off-site to order, and many standardised components such as the hot water system are acquired ready made.  Yet other components such as cupboards are built for the house, but utilising parts that are mass produced, whearas components such as the brickwork are completely built on-site.

So it is for software packages.  The cost and complexity of today’s software project is much closer to a building project than to the purchase of even the most luxurious vehicle.  For the forward looking Retail IT leader, building a Software Development capability needs to be an increasingly important part of your overall strategy.

I have seen (and been responsible for) IT strategies that do not work.  An IT strategy should NOT simply be a list of projects the IT team would like to do, or for which “the business” have asked.  Nor should it be a reforming of the overall Business Strategy into IT or Technology terms – in reality, very little of a Retailer’s Business Strategy really depends on IT to execute it.

So what should be in the ideal retail IT strategy?  Here in my view are four key essentials that should be part of any retailer’s IT strategy:

• Firstly, there must be a financial plan. This plan must start with the imperative of reducing the like-for-like cost of IT.  To compensate for organic growth of the business, the like-for-like cost should be expressed as the percentage of IT cost to sales.  Reducing this figure gives IT leadership credibility with the executive, and provides head room for future IT investments.

• Secondly, the strategy must detail how the IT team will evolve. What capabilities can be considered as commodities and purchased from the market, compared to capabilities that are strategic to the business and should be invested in?  As a rule, this part of the strategy should continually seek to move the IT skill set away from purely technical roles to business support and knowledge management roles.

• Thirdly, how will the technology evolve? Graphics showing technologies changing from red to green over time are a great way of representing the intention.  The objective here is to consolidate and simplify.  This may include moving to common platforms (application and technology); migrating processing to the cloud; or upgrading to latest versions (although version upgrades need to be justified carefully; never upgrade just to keep current)

• Finally, what is the new technology investment the IT team is recommending? Having freed up costs in the first part of the strategy, this section demonstrates how the savings can be re-invested in new technology to further enable the business.  This should not be a long list of projects; it should be the two or three strategic projects that will significantly enhance the business.

An IT Strategy framed in this way becomes a steady state process; it can be renewed and updated each year, but the thrust stays the same.  The four elements play to each other:  each year, like-for-like costs are reduced, freeing funds to invest in new technology, resulting in landed costs which over time become part of the like-for-like costs to be reduced in the next cycle.  The team is constantly upgrading its skills as more and more aspects of technology becomes commodities that can be purchased and the team focuses more on business value add.  And along the way, the technology is constantly being updated, simplified and consolidated to drive the required savings.

Does your experience match with mine?  Are there other elements you feel are essential to a retailer’s IT Strategy?  Please let me know what you would include in your Retail IT Strategy.

The first problem is that retailers are not always clear why they have a loyalty scheme, and what they expect to get from it.  Loyalty programs can work in different ways, and it is important for a retailer to be clear about their objective.

• Retaining Customers. This loyalty scheme is genuinely about rewarding the customer who regularly visits, and hence encourages them to stay.  The coffee card is a typical example of such a scheme.  Since the card is not registered, it provides the retailer no information about the customer.  What it says is, keep buying your coffee from me and I’ll give you a free one as a reward.  Most people are creatures of habit, and will tend to frequent the same one or two cafes each day.  The coffee card reinforces that behaviour.
• Attracting Customers. In this scenario, the retailer hopes to leverage off an existing base of customers from other retailers, and attract those customers into their own store.  This is the theory behind joining a multi-tenanted loyalty scheme, such as FlyBuys in Australia or Nectar in the UK.   The theory is the customer wants to maximise their points in the scheme, and selects their shops accordingly.  Linking your loyalty scheme to other large reward programs such as an Airline program has the same effect.
• Knowing Customers. For some retailers the objective is to identify who their customers are, learn the customer’s needs, want and habits, and then target them with offers specific to that customer.  This is the typical scenario in an apparel store.  Often the customer will not even know the balance of their “points” in such stores, and will be occasionally surprised at point of purchase to learn they have earned a discount.  The key for the retailer is to register the customer’s contact details, and to tag each transaction with the relevant customer’s identity.

If a retailer is unclear about their objectives, then they risk selecting the wrong type of program.  Before committing to any loyalty scheme, the retailer should ensure they understand their objectives and select or design their program accordingly.

The second problem occurs when retailers do not drive the required participation in their program.  Every sales associates needs to be asking the customer if they are a member of the loyalty scheme during every single transaction.  This both drives the opportunity to sign up additional customers who are not on the program, as well as prompting existing members to identify themselves.  Similarly, the retailer needs to make it easy for the customer to provide that identity.  For example, if the retailer insists on the customer presenting a card, then the retailer is now competing for space in the customer’s very crowded wallet.  Allowing quick lookup of the customer at POS and providing additional options such as smartphone based solutions will immediately raise the participation rate.

Thirdly, many retailers discourage customers by lack of transparency on how rewards work and what the customer’s ‘balance’ is.  Without the constant encouragement of messages such as “10 more points and you get your next reward”, the customer has no incentive to spend that extra, or even to bother using the loyalty program.

I shop occasionally at a nearby electronics store.  On one visit, I noticed they had a loyalty program and inquired about it.  They had never previously asked me to sign up.  On sign up, I was told that points would apply “from my next transaction” – ie not for the current transaction.  On a subsequent visit, I attempted to use the program, but as I didn’t have my card with me, they were unable to associate my transaction with my loyalty account.  I have never been clear what rewards, if any, I get from being a member.  I no longer even try to use that program (and I frequently take my business to their competitors, both on-line and bricks’n’mortar).  I’m sure that management of that retailer bemoan the expense of their program and wonder why it doesn’t work.

If you want to have a successful loyalty program, you need to

• Design the program with your objectives in mind
• Ensure all your store team are constantly pushing the program with every transaction
• Ensure the program is easy for your customers to participate in, and to understand.

If loyalty programs didn’t work, retailers wouldn’t persist with them.  Follow the above rules, and your loyalty program will provide the benefits for which it is designed.

Almost since the advent of Smartphones, the concept of digitizing the wallet has grasped the imagination of many. From those of us with a pocket book the size of George Costanza’s exploding wallet through to those of us who simply don’t want to have to carry around another item, the Smartphone offers a potential solution to one of life’s annoyances. Unfortunately, the Digital world has still not provided a true replacement.

The biggest problem is that we are faced with replacing a wallet full of items with a smartphone full of apps, as no solution seems to address more than a small segment of the problem.

Consider the things we carry in our wallet:

1. Money (cash and plastic). A plethora of technologies have arisen to replace money in our wallet. With the advent of contactless payments and technologies such as the Apple Watch, this is the area where the digital wallet has advanced furthest. My experience using a pay tag (a smaller version of the contactless credit card attached to the smartphone and integrated with an app to manage its functions) has been great, with a significant reduction in the number of times I reach for my wallet. However, even in Australia where contactless payments have arguably progressed further than any other country, there are still numerous occasions where I have to insert my card into a PinPad, or pay cash to a retailer who does not accept any form of card.
2. Identity. Whether it is a Drivers License, National Insurance or Social Security, most of us carry identification documents in our pocket. Digitizing these is of course in the hands of the issuers – unless a jurisdiction decides to proceed down the digital path, such as the NSW Government has in their current election campaign, we will be required by law to carry these.
3. Business Cards. Despite the spread of professional networking tools such as LinkedIn, it is still simpler when meeting someone at a conference, a networking event or even a business meeting, to simply hand over a printed card with your details. Applications such as Bump tried to address this, but ultimately were closed down. Until a method is developed to exchange details without laboriously typing in an email address or mobile number, that 3.5 x 2 inch piece of card will continue to proliferate.
4. Membership cards. Whether it’s a retail loyalty card, the card for the local library, or the season ticket for your favourite sports team, cards bearing a barcode representing membership seem to be everywhere these days. Apps such as Stocard offer a way to digitize many of these, although you still need to get the physical card first. The difficulty of older scanners to read the reflective surface of a smartphone also causes issues, but these will fade over time.
5. Receipts. Every time I transact, I get another piece of paper – sometimes two – to add to my burgeoning wallet. Individual retailers have started to offer digital receipt solutions, but they are not ideal. Generally they consist of emails, which simply deposit a copy of the receipt into my mailbox. I expect my digital wallet to allow me to store, access, sort and search my receipts, so I can recall my purchase documentation at will.
6. Coupons & Vouchers. The final items stretching my wallet to bursting point are the coupons and vouchers offering me discounts and special offers from diverse retailers and organizations. Although many retailers offer these in digital form in their own app, I really don’t want to fill my smartphone with the apps of 50 retailers. What I really want is an app that all retailers (or at least a significant number) will use to publish their coupons. Apps such as Apple’s Passbook try to achieve this, but don’t have the retailer take up to make them truly a replacement for my wallet.

All my life I’ve been waiting for technology to deliver me the promised flying car, video telephony, a personal jetpack, cheap fusion power….. and a virtual wallet. How much longer will I need to wait for the virtual wallet to become a reality?

The key to gathering useful data about retail customers is to be able to identify the same customer across multiple transactions. Retailers primarily use two techniques: Loyalty programs, and Credit Card usage. One of these techniques is about to get much more difficult.

The use of a customer’s credit card number as a means of identifying the customer across transactions is employed widely in the retail industry. Whether retailers store the full Credit Card number, or just part of it (such as first and last four digits), or a hashed version that protects the security of the credit card number, the fact that the same number is used in each transaction gives the retailer a method to link those transactions and hence gain insights into the customer’s behaviour. Even when a retailer has a robust loyalty program with a card tagged to many transactions, the credit card number can be used to link additional transactions where the customer may not have used the loyalty card.

However, the launch of Apple Pay last year changed the game for retailers. With Apple Pay, a unique token is generated for each transaction, giving no way for the retailer to link transactions. Visa has now announced plans to extend their Visa Token Service (VTS) created to support Apple Pay into other payment areas such as eCommerce and mobile payments. MasterCard’s Digital Enablement Service (MDES), also created to support Apple Pay, is likely to follow suit.

As these technologies are adopted by more financial institutions, and more customers switch to mobile wallets, the utility of the credit card number as a customer identifier will diminish. Retailers will increasingly depend upon their loyalty programs as their primary means of customer identification.

This in turn will lead the savvy retailer into rethinking their loyalty program. To encourage customers to identify themselves, retailers will need to offer more than the simple (and often quite paltry) rewards traditionally associated with loyalty programs. Instead, the retailer will provide customers with additional services and simplified transaction when the loyalty card is used. For example, emailing receipts to the customer; providing access to kiosk services such as photo printing; and providing personalization such as identifying the right razor blade based on previous purchases.

Credit card numbers have been a convenient tool for retailers for years. However, the increasing theft of credit card numbers from retailers and the availability of new biometric identification technologies is driving the demand by both Customers and Financial Institutions for a payment method that does not disclose any personal details to the retailer. Retailers need to be planning now to revamp their loyalty programs if they wish to retain the value they derive from identifying customers.

Australian retailers are facing ever-increasing threats from the global market. For the first time, significant numbers of overseas retailers are either entering the Australian market or are well progressed in their plans to do so. At the same time, the “global village” nature of online retail means Australian consumers can access overseas markets simply and easily.

In the Supermarkets category, discount chain Aldi has now built a significant (6%)share of the Australian market and continues to grow rapidly. Newer entrant Costco is also making an impact, and rumours of the entry of Lidl into the Australian market keep appearing. In their November 2014 analysis of Australian Supermarkets, UBS moved their recommendation for Australia’s largest Supermarket from “Buy” to “Sell” on the back of the increased competition from the discounters.

Apparel retailers are also facing an invasion from overseas retailers. H&M, Zara and TopShop are the most famous of a number of brands appearing in Australian cities and shopping malls. These brands have a large online presence and are heavy users of social media advertising.

In other categories, competition from online retailers such as Amazon is impacting on sales from traditional Australian retailers. Harvey Norman, Myer, David Jones and Target have all cited overseas online retail as damaging to their business. The potential arrival of Amazon into Australia would be disastrous for these retailers.

Australian retailers must respond to these threats, or risk their profitability and even their existence. So how can digital technology help?

A report last year by the University of Sydney and Cap Gemini analysed the state of digital commerce in Australia. Its conclusion was that while Australian retailers have successfully used digital technologies to inform their customers (product range, store locations and hours) and to transact with them (accepting and fulfilling customer orders online), they have in general failed to build 1:1 relationships with customers or to effectively exploit social media platforms to engage with their customer base.

So the to-do list for Australian retailers should contain items such as

• Develop a sophisticated recommendations engine.
  Retailers know their products and they know their customers. Putting these together into “People like you also bought…” or “Recommended for you..” should be a mandatory part of the customer’s digital experience.
• Allow websites and mobile apps to be personalised.
  Put the customer in control by allowing them to tailor the experience. A food retailer may allow the customer to specify allergies; products with these allergens will then never be listed. A customer may have a hobby; products relevant to that hobby will be brought to their attention.
• Listen and respond to feed back through suggestions, surveys and competitions.
  A suggestion box is a great way to engage with the customer – as long as the retailer responds in a timely manner. Competitions are a great way to get the customer not only to engage and participate, but also to provide more information about themselves to allow further tailoring of their experience.
• Provide history and status information on orders and purchases.
  Customers know retailers have lots of data. Make that data available to them. Give them access to the status of orders from central ERP systems, provide them a history of what they have purchased, make available analyses of their data such as spend by category.

Australian retailers should have the advantage. They should know their customer, they should understand Australian supply chain idiosyncrasies and they should be able to connect with local suppliers better than their international or online rivals. If they properly exploit digital technologies, they can use these advantages to sustain and grow their business despite an increasingly global market.

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.

It is estimated that 90% of all the data gathered throughout human history was collected in the last two years. This is the phenomenon of Big Data – data that is collected about every interaction between people, systems, devices and information. Not only is the data collected, but new tools and improved compute power allows this data to be analysed in ways that can seem either miraculous or downright creepy. Whether it is used to determine if a customer is pregnant or the location of Osama Bin Laden, data can now allow organisations to know more about specific individuals than ever before.

What does this mean for retailers?

Firstly, if you are a retailer and you are not gathering and storing information about all your interactions with your customers, then you are already losing the race. And interactions are a lot more than simply sales transactions: you need to know what web pages your online customers visit, what searches they perform, when and how often do they use your mobile app, when do they visit your store, what aisles or displays in the store do they visit, and when does this finally turn into the sales transaction which is after all the only time you can monetize your customer relationship.

Secondly, you need a strategy to identify your customer across all of these interactions. Accurate customer identification is the key to unlock the value inside all the data you are gathering. Whether through an effective loyalty program, analysis of credit card usage, detection of smartphone identifiers, use of face recognition technologies, or most probably a combination of all of these, identification of your customer is crucial. Of course, at all times the privacy of the customer is paramount, so all the above techniques need to be used intelligently.

Thirdly, to get value from your data you need analysis. For this there are two crucial ingredients: the right tool sets, and the right capability in your team. Data Scientists are the heroes in this new world, and you need to build capability in that area. You also need the tools to allow your data scientists to access the data efficiently, processing vast amounts of information. Today, such tools can quickly and cheaply be acquired and deployed, using cloud technologies and Hadoop.

Following these three principles will allow the retailer to understand their customers, and target unique offers for specific customers tailored to their needs and wants. However, I believe that the truly successful retailer of the future will also address a fourth aspect of Big Data.

As awareness of the implications of Big Data on privacy grow, and as the public become wary of targeted marketing campaigns, customers will increasingly become reluctant to participate. To keep the customer willing to participate in the Big Data game, the canny retailer will give that data back to the customer in ways that add true value to the customer.

For example, if I regularly buy my fuel from the same retailer, that retailer will have insight not only into my own fuel consumption, but into the fuel consumption of others. Therefore, the retailer can tell me “Do you know your car is 10% less fuel efficient than other customers driving the same model?”. This is valuable information to me, as I can use it to have my car’s engine examined, or to change my driving habits, and ultimately save on fuel. Of course, this only works for me as a customer if I continue to use the same retailer for my fuel purchases – a better incentive for loyalty, I would contend, than most current loyalty programs

Big Data is without a doubt the retail currency of the future. But the real gold for tomorrow’s successful retailers is determining how to make the Big Data of real value for the Customer as well as for themselves.