Retail technology for 2015
Through a special arrangement, presented here for discussion is an excerpt of a current article from Commerce Anywhere Blog.
I’m avoiding the word "prediction" because that involves a little more precision than I’m capable of delivering. Instead I’ve listed the five big trends I think will dominate the retail technology landscape in 2015.
1. Payments Race
Granted, we’re in the era of internet time where everything moves faster, but let’s set expectations. Apple Pay, Google Wallet, PayPal, MCX, Softcard, etc. are the start, not the end of the next generation of payments. I expect continued refinement for several years before we find "the winner." And don’t for a minute think the best technology will win. The best solution wins, and that includes compromises between consumers, banks and merchants.
2. Home Automation
The Nest thermostat was just the start, and Rosie is somewhere towards the end. We’re going to see a plethora of connected devices for the home, ones that retailers will sell and ones that will help retailers sell. Amazon’s Echo and Dash are great examples of removing shopping friction when replenishing the cupboards. Soon our homes will know what they need and parts of our shopping list will be automated.
3. Fast Delivery
At one end of the spectrum you have the prospect of delivery by drones, and at the other end you have 3D printers waiting to create on-demand. The short-term answer to delivering products faster is probably in the middle, borrowing from the likes of Kiva and Uber. The first half of the solution lies with efficient fulfillment. Sometimes that means pick and ship from stores, sometimes it means centrally located dark stores, and often it means automating the warehouse. But accurately promising, picking, and packing solves only the first half of the journey.
4. In-store Personalized Experience
Personalized experience at scale is the goal. The "at scale" part tends to exclude expensive staff, so technology is expected to step in with intelligent automation. Technologies like geo-fencing, marketing automation, BLE beacons, data as a service, and video analytics all have a place in the solution. Retailers will continue to experiment with helpful ways to interact with consumers, being the butler instead of the stalker. Payment, loyalty programs and marketing will converge on the smartphone, and bring many web innovations to in-store shopping.
5. Data Theft
Organized crime has gone from spam, to malware, to outright data theft. Until the credit card industry fixes the inherent and obvious flaws in their payment ecosystems, hackers will continue to attack retailers. EMV is a step in the right direction, but its only a partial solution. Tokenization and end-to-end encryption are necessary and will finally be implemented in several industries. Data theft will get worse before it gets better, but no one is going back to cash.
Discussion Questions
Which retail technology trends do you see getting the most buzz in 2015? Will other trends have a greater impact than those mentioned in the article?
I see more automation in the fast food industry as restaurants try to get ahead of the minimum wage curve. Then changing their labor model replacing two mediocre employees with one good employee at a higher wage level.
Uber should have been on the top of this list as Uber is growing and demonstrating value. The ride-sharing concept will eventually transition into delivery sharing of wholesalers to retailers.
I would’ve put mobile ahead of the in-store personalized experience, as I see mobile apps 2.0 as a prerequisite to enabling that experience, and we’re still limping along with mobile apps 1.0. I think we’ll get to an in-store personalized experience eventually, but not in 2015. There is still too much foundation to lay before we get there.
If there are more large data breaches, that will get the most buzz. Otherwise or maybe in conjunction with it, the Apple iWatch with the Apple payment system is likely to get a lot of buzz. Because of the link between the iWatch and the payment system, Apple will get a lot of buzz. Competitive payment systems will be working to create a lot of buzz as well so this is likely to be a high-profile topic.
If there is regulation of the airspace for drones or a battle over using drones, that topic will get a lot of buzz.
Trade between Cuba and the U.S. will also get a lot of buzz.
E-payments will lead this discussion into and through 2015 with data fraud and security/privacy issues intertwined. The continuing challenge will be to provide relevance to the store for digitally-empowered shoppers. Technology is still being utilized as a crutch or replacement to “analog” shopping. Being digital means reinventing the entire shopping experience. I trust we’ll see the continuing emergence and evolution of the hybrid agency that not only designs new shopping experiences but actually activates them in the real world. Simply using a collection of interesting technologies in the analog world is not the answer. Reinventing the shopping experience in the digital era while still staying true to surprising and delighting the shopper will win the day.
Payment systems are important, and there will need to be cooperation between the new high-tech mobile, internet and traditional payment systems, where banks and the new kids on the block can offer an upgrade to many new terminal systems in stores now, which can operate with one nice unit at each checkout. All the system payments, including chip technology, need to be a seamless, easy transaction and let them share in the small charges the store pays, without adding on extra fees, and then you’ll have something we as retailers will love.
There are endless tech apps for smartphones and iPads, and the retailers will have to make some choices on which apps will help their business. Seems like there are ten new apps every day coming out, so it will be up to the retailers to choose wisely, as they can not go with everything IMO.
Delivery solutions are still trying to get their acts together. There are currently a few ways companies are handling this. The first is a flat fee for local same-day and next-day. The second is a subscription service annual fee with restrictions. The third is building in added costs to the products and lowering the delivery fee (who are we kidding here). The fourth is same-day one-hour service, which is the toughest of all, due to higher costs and time constraints. Making a profit on this service has been very difficult as true costs of delivery must be incorporated into fees or higher-priced goods, and consumers expect free delivery these days, which is unrealistic, so this is going to take some time to figure it all out.
Data theft is never ending, as too many online hackers have too much time on their hands, and end up creating nightmares for all of us. This problem will be ongoing for years, so buckle up folks.
Buzz is about excitement and not necessarily actual adoption of immediate market opportunity.
My vote on the retail technology to get the most buzz in 2015 is a mega-trend that combines at least two of the ones mentioned here, The Internet of Things (IoT): In-store personalized shopping experience and home automation.
Consumers have proved to be ahead of the industry in turning technology to convenience that suits a new lifestyle. Connecting billions of location-aware sensors, products and machines to specific consumer demands and behaviors will catch the consumers’ imagination and accelerate adoption of Jetsons-type scenarios. It’ll be very exciting!
In-store technology solutions will get the most buzz in 2015, even though most probably won’t deserve it. Technologies that make our shopping faster and safer, while important and definitely a pain point for both the consumer and the retailer, just aren’t that sexy when it comes to what the media crave.
The store, however, offers highly visible opportunities to wow us. Robots, AR shop assistants, smart mirrors, and apps galore are so much more visible and futuristic. The trouble comes when attempting to understand their usefulness and impact on the buying decision.
Technology bling that mirrors the online experience will get all the buzz, but it’s the technologies that solve a (real) problem and create a personal connection to the retailer that should get the press.
I hope that number four comes to life in 2015. The momentum building behind in-store technologies like beacons has been building for 12 to 18 months, but there are few examples of well-executed implementations at scale. Lots of experimentation has been done discreetly in 2014, but 2015 may be the year the execution starts to catch up to the hype.
To me security is the strongest trend. It’s a gatekeeper issue for all other consumer-facing technologies. If they aren’t secure they won’t last.
And I doubt we’ll fix that over the next 12 months. Hackers are more sophisticated than security coders. What happened to Sony could just be the tip of the iceberg.
Solve security and we can talk about what comes next.
All five trends listed are important to the customer and the retailer. What will get the most “buzz” is what has been getting the most “buzz” in 2014, and that’s data theft. You’ll see more and more companies trying to protect their customers and, unfortunately, more and more cyber-criminals trying to hack these companies and steal the customers’ data. The big/recognized companies will get the most press, but you can be sure there are plenty of small companies that are getting hacked as well.
The fast delivery will be a big deal. American consumers want things quickly and will be willing to pay a fair price for the convenience.
This is an excellent list, although like Nikki I think the in-store personalized experience is more likely to rely on mobile devices than installations.
On balance, payments will have the largest impact, followed closely by its interconnected phenomenon, data theft. Can modernizing the former help mitigate the latter?
I wouldn’t bet on it.
I think 2015 will see a steady growth in overall revenue for U.S. merchants. The stock market is stronger than ever. Auto sales, both new and used, will surpass $1.1 trillion and that economic strength should trickle down to consumables.
I couldn’t think of the answer for myself—and my colleagues were fairly distributed on what technology trends they thought would get the most buzz in 2015.
Then I came to Mohamed Amer’s answers and they made the most sense: a mega-trend that combines at least two of the ones mentioned here, The Internet of Things (IoT): In-store personalized shopping experience and home automation,”—and I add, maybe a few others mixed in makes the most sense to me.
And to get silly, I would say to Camille, who said, “Trade between Cuba and the U.S. will also get a lot of buzz,” I’ll bet the use of drones for deliveries would be an interesting concept—and get a lot of buzz. ; )
My vote is for in-store personalized experience. The smartphone will be the linchpin for lots of cool technology. Shoppers will accept the changes gradually, but will eventually learn to embrace the new in-store experience.
The consumer experience will be more relevant thanks to new tools that tie the customer to the retailer—content/customer/context matching will get better and best practices will emerge.
Multi-channel solutions will cross the chasm and make 2016 the start of the next chapter of retailing.
Big Data will be more usable and actionable, they will cross the chasm.
Security will be part of the brand promise.
More money will be spent on technology and design talent.
Retailers will make and sell more of their own designs thanks to an evolving ecosystem that makes product building easier.
News of the depth of customer profiling will result in the launch of anonymous shopping movements.
Oh and drones, they will be huge and everywhere! 😉
E-payments definitely seem to be staying here. However, security issues will have to be resolved completely before retailers and consumers can trust them as the preferred mode of payment.
Some trends we’ve identified (some overlap with ones mentioned):
– more payment options
– merging of online and in-store shopping experience
– faster delivery
– dynamic pricing
More details here.