BrainTrust Query: 2012 Predictions for Retail Technology

Discussion
Jan 04, 2012
David Dorf

Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.

In past years we’ve seen the rise of Apple, Google, Facebook and Amazon, but 2012 will mark a year of war between these juggernauts on the retail battlefield. We’ll also continue to see lots of new alternative payment types, more engineered systems, better social analytics, more 2-D barcodes, greater adoption of cloud services and improved f-commerce.

Here are four larger trends I see for 2012:

1. Mobile Loyalty

The traditional loyalty card has been a blunt instrument that worked well for the consumer but didn’t deliver for most retailers. The concept of geo-fencing has been around a while, but there are few retailers that have really adopted it. The smartphone, with geo-fencing enabled, needs to become the consumer’s loyalty card where retailers can incent, learn from and communicate with customers. In 2012, geo-fencing will take off and deliver value for both consumers and retailers. Look for new loyalty programs built around smartphones.

2. Facebook Levels Off, Google+ Stalls, Groupon Withers, Amazon’s on Fire

The novelty of Facebook is wearing off, so while there are lots of users, I believe the engagement of those users will wane. At the same time, I seriously doubt many will close their Facebook accounts and make a permanent move to Google+.

Retailers will also learn that their exchange of profits for new, disloyal customers through Groupon isn’t sustainable.

But Amazon’s success with the Kindle will translate into more Prime customers and greater loyalty. The trend for shoppers to skip Google searches and go directly to amazon.com will continue and Amazon will get more aggressive with books, movies, and music. Look for Amazon to acquire in the digital content area.

3. Apple Payments

With all the news about alternate payments, this isn’t a stretch at all. Apple will finally release the iPhone 5 with NFC support and start to leverage its iTunes customer base for payments in non-Apple stores. I don’t see how this will be financially viable with both Apple and credit cards taking a cut of each sale, so look for Apple to push customers toward ACH (debit/checking) as PayPal does. Look for Apple to start a loyalty program to incent consumers to use the new payment vehicle.

4. Mobile Self-Checkout

Self-checkout, especially at grocery stores, has been around for a while. Some love it, some don’t. Smartphones now make it possible to simulate an e-commerce experience in the physical store. No need to stand in line at all. Mobile POS is increasingly in the hands of associates, so it’s not a huge step to expose that functionality directory to customers. As Apple leads the way, look for grocery chains to quickly add the capability followed by home improvement stores.

Discussion Questions: Which technologies mentioned in the article do you see gaining significant ground at retail in 2012? Which of the technology wunderkinds (Apple, Google, Facebook, Amazon) are best positioned to further transform retailing in 2012?

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18 Comments on "BrainTrust Query: 2012 Predictions for Retail Technology"


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Nikki Baird
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Nikki Baird
9 years 4 months ago

I sincerely hope that mobile loyalty takes off — it would certainly make my wallet thinner and my purse lighter. But I have my doubts that this is the year for it. I think that retailers’ back-end systems for loyalty are too ugly to make mobile loyalty easy to pull off, and if there’s one lesson retailers have learned from online, it’s that two separate loyalty programs (online vs. in-store) does not work. So stand-alone mobile loyalty is pointless. I think this is one that maybe slips to next year.

Amazon is indeed on fire, and given the criticism they’re getting from the market for investing “too much” back into the business, I think they’re going to be the one to watch for more big surprises to come. The “surprises” from Apple have been so thoroughly worked over at this point, I don’t know how surprising they’re going to be — but I know if the iPhone 5 comes out with an NFC chip on it, I’ll be lining up to buy it.

Bill Emerson
Guest
Bill Emerson
9 years 4 months ago

We are still very much in a market-share driven environment. There will definitely be continued growth in the mobile intelligence as retailers look for ways to stand out in providing information/discounts and streamlining the buying experience with faster checkouts.

No question that Amazon will continue to gain big chunks of market share. They’ve been in the game much longer than the others and they started as retailers, not social sites.

Paula Rosenblum
Guest
9 years 4 months ago

The easy answer is Amazon, but I’m going to call “no fair” since it already HAS transformed retail. How do I know that? As soon as a company can use something as an excuse for poor performance, that something has transformed retail. And we know Amazon has been blamed on at least one retailer’s poor performance.

I don’t think Apple even needs NFC to process payments. I think it can be done in a PayPal/Amazon type way. We’ll turn around one day and discover that we’re paying for everything through our iTunes account (which in my case, will also pass through PayPal!).

So, I’ve got to go with Facebook. Its new “timeline” has reinvigorated the fun of playing around with your profile (and seeing the story of others’ lives). I expect a second surge.

Joel Rubinson
Guest
9 years 4 months ago

The big thing is the use of mobile to transform the physical shopping experience (more so than online replacing physical shopping). As such, I think Apple and Google are higher on the list than Amazon. Facebook is the dark horse. They want to create the unified profile for people that could include frequent shopper and check in data but I haven’t seen them move effectively in this way. but they could. The could even dominate TV (wouldn’t a FB log-in be the easiest way to surf the impossibly high number of choices?) the alternative to execute that plan could be Google who has profile info via gmail and google+. I guess net/net, I would bet on Google first.

Ed Dunn
Guest
9 years 4 months ago
Facebook is the most powerful Internet tool ever invented and should not be discounted. Facebook is more powerful and scalable than Google, as Google crawls for data for Google users to search while Facebook users generate their own data. To focus only on 800m users and not focus on the trillions of unique interactions out of this large user base that can be monetized is nearsighted at best. We have not seen the tipping point of Facebook where digital cameras will have a “Post to Facebook” button. In retailing, there will be interactive touchpoints that allow a customer to just post a picture of themselves inside a retail establishment to Facebook — connecting that retail store with the person to their social circle, a powerful marketing message. In terms of mobility, I’m hoping mobile will be redefined with the slant away from telecommunication operators. The telecoms and banks will not deliver m-commerce — it will be creative agencies as well as technology consultants who will deliver m-commerce and m-marketing to retailers, including NFC. I strongly… Read more »
Gene Hoffman
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Gene Hoffman
9 years 4 months ago

My brain is signaling me to choose Amazon as being best positioned to further transform retailing in 2012 … but my gut tells me that a still-unknown technology is aborning in some basement or loft that could surprise the current dynamic wunderkinds.

Max Goldberg
Guest
9 years 4 months ago

Mobile will continue to be the big story in 2012. Consumers will use their smart phones to acquire discounts (coupons, special offers), pay for their purchases and gain loyalty rewards.

Amazon will continue to grow. So long as they continue to deliver great customer service, they will remain a trusted place to shop.

Consumers will continue to look for deep discounts. Groupon and LivingSocial will deliver them, along with a slew of local websites.

Consumers want ease of transaction with retailers they trust, at the lowest prices possible.

Cathy Hotka
Guest
9 years 4 months ago

I’m voting for a fifth technology — mobile device management. Once retailers have tools to control versioning and security on mobile devices, and track them adequately, watch the deployment of IOS and Android devices shoot through the roof….

Verlin Youd
Guest
9 years 4 months ago

Nice list to consider, however, it may be missing a couple of critical items.

First, I agree that mobile, mobile, and more mobile will continue to grow, including payment. However, I have to wonder if NFC is really just a small step along the way to ultimately full online mobile payment, with either ties to customers preferred tender types or handled via mobile carriers on monthly bills.

Second, there have been a few recent articles on the use of video within physical retail stores, with a new focus on driving customer experience and service. As retailers continue their focus on experience along with efficiency, video will become a key technology used to finally understand what goes on in-store and generate metrics/analytics similar to those used to measure customer experience on the web.

Ron Margulis
Guest
9 years 4 months ago

I’m surprised that sensor technology, specifically RFID, didn’t make this list of trends for 2012. With the Macy’s announcement that more than 800 stores would be using the technology by the third quarter and with JC Penney, Lord & Taylor, Saks and many others strongly supporting the use of RFID for inventory accuracy and other business uses, it’s clearly going to be a leading retail trend this year.

Anne Howe
Guest
9 years 4 months ago

I agree with Joel Rubinson on the potential for mobile to transform the physical shopping experience. Consumers are looking for enhancements in the physical shopping space. I see a physical shopping experience that uses mobile apps to invite and gather shoppers together at retail for something special, beyond a discount or a coupon.

Macy’s use of QR codes is an example of doing it well online with short videos and style advice. Translating this concept to the real shopping experience would be a more engaging way to give shoppers the enhanced experiences they are seeking.

Matthew Keylock
Guest
Matthew Keylock
9 years 4 months ago

Mobile will continue to grow although I don’t see mobile loyalty or mobile payments reaching mass market scale quite yet, but these are very interesting and powerful opportunities. (I certainly hope I don’t get bombarded by 50 “geo-fenced” messages each time I go shopping.)

I’m curious on a number of other fronts too:
(1) what happens with Amazon’s move into fresh
(2) the impact of digital on the circular
(3) the power of the community in buying/shopping beyond promotions, e.g. social buying, social currencies
(4) CPGs collaborating more directly e.g. in going direct to consumers or in loyalty
(5) mobile enabled associates and the impact on the store design and the shopping experience.

Looking forward to it…!

Bill Bittner
Guest
Bill Bittner
9 years 4 months ago
I agree Amazon is the leader in online retail. The tough part is establishing the distribution network in the physical world. Amazon has it. They will only get better. I believe the survival of brick and mortar stores is the critical question for 2012. The whole concept of the store as a node on the distribution channel is pass. The mistake of retailers who complain they are just showrooms for Amazon is that they have not accepted the fact. Instead of fighting the reality, retailers who own stores need to embrace the fact that their web presence is fast becoming more important than their physical presence. They need to optimize their store locations for product demos, customer education, returns (even from online), and a very modest distribution function geared to instant gratification types of merchandise. I just finished a book that describes the future of technology. The big hurdle for space exploration is the cost of fuel it requires to get a pound of payload into outer space. The book predicted future exploration will be… Read more »
Lisa Bradner
Guest
Lisa Bradner
9 years 4 months ago
What a GREAT discussion to kick off the year and fun to see all the comments. LOVE Matthew’s list and all the thoughts it provokes. I will play contrarian on Facebook — we go there for our personal connections and I’m still not convinced we’re in shopping mode while we’re there. For that reason I think Google has a latent opportunity they’re not capitalizing on and Amazon could stun them both if it enhances its sociability. The iPad is a big deal and will drive huge e-commerce gains in the coming year. I agree with Joel, changing the in store experience through mobile is the huge play and the nearest in opportunity. Nikki is right to call out the system issues that will make loyalty a longer term play. Multichannel solutions will win in 2012 — let me buy where, when and how I want and recognize me wherever I go. I’m hoping mobile check out isn’t the next big thing — I’m still fighting self-checkout with everything in me! Happy New Year, all.
Bill Hanifin
Guest
9 years 4 months ago

My “3 words” for Loyalty Marketing in 2012 are Data, Mobile, and Social, so I agree the mobile device will become more central to retail loyalty programs.

There are a number of innovative payment systems that combine elements of location based marketing, local merchant networks, and a loyalty component. Some clear payment through affiliation of a credit card while others are tied to ACH to lower processing costs. Apple could shock us and join the fray and would be principally competing with Google Wallet for NFC based payment dominance. Building out the infrastructure for acceptance of NFC nationwide is a challenge for either scheme.

I’m not a fan of self check-out and think the smartphone screen real estate would further degrade the use of that channel to manage the process.

Adrian Weidmann
Guest
9 years 4 months ago

Given the extent of their experience and their continuing ability to leverage their vision with tactical execution, Amazon will continue to introduce new technologies and workflows that will further their leadership position during 2012. I do believe that Amazon is strategically poised to enter the media world of books, movies and music. There is incredible value in monetizing content in all forms and Amazon is uniquely positioned to take this next step and deliver an exceptional experience to its customers, further enhancing their trusted bond.

Carol Spieckerman
Guest
9 years 4 months ago

Amazon continues to change the game in ways that have been largely overlooked. Thanks to Amazon, traditional retailers are becoming category-agnostic and expanding away from their category-defined cores as never before. I see this dynamic accelerating online (I included the the spate of “marketplace” launches as one of two significant events of 2011 that flew under the radar) and in store (drug retailers forays into food, grocers launching beauty lines, etc.). The more endless Amazon’s aisles get, the broader everyone else’s assortments become in response. What are the implications of everyone being a marketplace?

Amazon is still portrayed as a pure-play etailer when in fact they are pursuing alliances with retailers on terra firma (the site-to-store beta with 7-Eleven). As formidable as Amazon is, perhaps they are being underestimated when relegated to virtual-only status.

Amazon will further transform retail in 2012 in multiple ways while most pay attention to the obvious.

Mark Burr
Guest
9 years 4 months ago

Mobile apps will continue to grow.

Amazon will continue its march to overtake Walmart as the #1 retailer.

Facebook will level off or become less relevant as did MySpace, as directly connecting will become the next wave without a third party.

Mobile payment will be pushed. Consumers will remain leery and have to be dragged kicking and screaming to this form of payment over security concerns. It will not grow anywhere near the rate of predictions.

All other things mobile will blossom at rates higher than predicted. Payment will be slow in consumer acceptance.

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