prepare for a future of unified commerce - retail insider · 2020-02-13 · 201617 etai ecnoog rend...
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White Paper
2016/17 Retail Technology Trends
Prepare for a future of unified commerce
A Retail Insider Production in association with
2016/17 Retail Technology Trends
Prepare for a future of unified commerce
A Retail Insider Production in association withPage 2
White Paper
In the past 12 months both the retail industry and the
consumer shopping journey have continued to evolve.
In 2015 retailers began making attempts to bridge the gap
between stores and digital channels, some tried to leverage
social media to enhance the customer experience whilst others
adopted mobile focused strategies.
However, many are still on the journey to creating a truly unified
commerce experience. This white paper assess upcoming
trends and how retailers can realistically implement them in a
way that supports and enhances the customer journey.
2016/17 Retail Technology Trends
Prepare for a future of unified commerce
A Retail Insider Production in association withPage 3
White Paper
ContentsConnectivity across digital and in-store 5
PoS as the hub 6
Richer customer experiences 6
Inventory management 7
Personalisation through blending digital and physical 9
Artificial Intelligence making positive impact 10
Data analytics delivering insight 11
Are you prepared for unified commerce? 12
2016/17 Retail Technology Trends
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Retail’s Big Show, organised by the National Retail Federation (NRF), is the best place for discovering the latest innovations. The annual event hosted in New York City brings together the world’s leading retail technology providers and senior executives from across the industry and is a great shop window into future trends.
The show provides a great opportunity to take a look at the key themes to watch out for
in the coming year and beyond and for retailers to develop their strategies accordingly.
One of the major underlying themes and trends this year was the continued march by
retailers towards offering a coherent omni-channel proposition. Many of the solutions
exhibited aimed to help retailers progress along this challenging journey and to assist
them in delivering an exemplary service to their customers across channels.
The sheer diversity of the technologies on show by the 580 providers in the Expo Hall
highlights how omni-channel is defined very differently by individual retailers and as such
they are increasingly likely to take different solutions from a variety of suppliers and then
look to integrate them.
It is clear that the objective for retailers should be to create an organisation that enables
data, on both inventory and customers, to smoothly traverse the channels and in doing
this deliver a seamless experience to the customer regardless of the shopping journey
they choose to take with the retailer.
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Connectivity across digital and in-store
As there is an increasing need to integrate the store with the other customer touch-points,
connectivity across the board will continue to be a theme that retailers must embrace. It
has to go beyond the physical store and link to the online channel.
This is becoming evident in the growth of Click & Collect, which is having
an increasing impact on physical stores and the management of
inventory. It was clear at NRF that RFID is helping to solve such
issues. Retailers must be aware that as Click & Collect
grows they will need to adapt their store bases to cope
with the extra volumes and to ensure customer service
levels are maintained.
Marks & Spencer is among a growing number of retailers recognising
this already. As order numbers jump its existing software and
processes are beginning to struggle under the increased pressure
and it is making changes.
The company is now working with its IT providers to
group products together for picking at the same time.
With the dramatic changes taking place in the retail
industry it is essential for retailers to work with providers
that offer both stability and flexibility so changes can be made
quickly and securely to existing infrastructures.
A partnership approach is the ideal way to progress so expect to see much more of
this collaborative way of working coming to the fore in 2016/17.
At M&S, upgraded in-store software will boost the efficiency levels of its employees
engaged with in-store picking. Su Doyle, North American Field Marketing at Checkpoint,
says utilising RFID technology can help alleviate some of the growing problems in-store:
“Stores are not efficient with Click & Collect.”
At present barcodes are scanned for individual Click & Collect orders, which typically
involve only a modest text description for store employees to locate the items. Not
surprisingly this can lead to lengthy picking times - especially among part-time personnel
with limited product knowledge.
But with RFID, Doyle says a scan of the tag – using the relevant hand-held device – can
bring up detailed product information including visuals to help locate the items. Utilising
the Geiger counter sound that emits from the hand-held unit when near the relevant
RFID-tagged products also helps. When the goods have been found and scanned they are
taken out of the store’s inventory in real-time.
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PoS as the hub
It is clear that the processing of Click & Collect orders is just one of a growing number of
elements that in-store systems will have to deal with as omni-channel takes greater hold
and retailers have to adapt their operations to take this into account.
Retailers will need to run a variety of such customer-related aspects through their Point-
of-Sale devices in the future - using them as the hub through which can be pulled a
whole host of data. This can include customer data from the retailers’ CRM solution, their
social media activity, and relevant product information and stock levels, as well as dealing
with returns, issuing refunds in real-time and also adjusting inventory levels accordingly.
The trend of integrating the physical store and digital channels is becoming ever more
important and more solutions are appearing to address this issue. Customer shopping
journeys are no longer linear but are conducted through multiple channels at the
same time.
Speaking at NRF Ratnakar Lava, VP of digital technology at US department store Kohl’s,
recognises this developing situation: “We can support shipping from store and collection
in-store whereby we leverage the store inventory. When a customer comes into our store
they can search on our app, allowing us to identify them and their location in the store.
We also provide our employees with the same digital information as the customers now
have [to hand]. All the systems and processes need to therefore work well together.”
Richer customer experiences
At the heart of this scenario are mobile devices in-store – in the hands of both customers
and shop floor employees. This highlights how smart devices will play an increasingly
important role in omni-channel retail and we can expect to see more such solutions
hitting the shop floor this year.
But they must be seamlessly integrated into retailers’ back-end systems and for this to
then be fully evident in the customer interface, leading to the delivery of an enhanced
experience for shoppers.
This will impact on the way sales assistants work. Connectivity is empowering them
to deliver a much richer experience for customer’s in-store and they must be
trained accordingly. Armed with tablets they can deliver ‘clienteling’ to
shoppers through access to their shopping history.
There was certainly plenty of proof at NRF this year that clienteling
continues to be an important part of the omni-channel developments of
retailers as they ultimately seek to provide a more unified experience.
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And we will see more of it, according to Tom Fuller, head of IT planning & engagement
at Waitrose, who presented at NRF: “We’ve a trial going on with Beacons to offer coupons
to customers, determined by where they are in the shop, and we’re also rolling out 4,500
iPads to empower our colleagues on the shop floor. It will help connect them to the
specialists in each store so that they can share information with each other.”
A major trend retailers must start to recognise is that retail technology is not about a one-
size-fits-all solution. It is therefore imperative that the technology providers they choose
are able to meet the flexible needs and demands of consumers through the solutions they
deliver. Only then does experimentation - such as that undertaken by Waitrose – become
a possibility.
Experimenting is important and there is likely to be a continuation of innovative thinking
coming out of the more progressive retailers this year. The whole sector could learn
something from such operators.
There was plenty of evidence at NRF of innovation – especially around enhancing in-store
service where problems presently exist. Intel showcased its RealSense chip technology via
a number of retailer implementations that look to address the ongoing problems retailers
and customers have with sizing.
Using the new chip Size Stream, they demonstrated a solution for Brooks Brothers that
takes both an infra-red and regular photo of the customer and from this creates hundreds
of data points that map out a 3D model of the person to determine their perfect
fitting shirt.
Michelle Tinsley, director at Intel, said: “It takes time to measure customers but with this
technology the two photos help get all the data points that are needed in seconds rather
than 20 minutes.”
Department store chain Nordstrom is also utilising the Real Sense technology within its
3D digital foot measuring solution that has been developed by start-up firm Volumental.
It sizes up the customer’s feet and can then recommend specific shoe styles. This
information can be added to the customer’s profile that it holds in its CRM system, which
can then be accessed by the sales assistants on their tablet devices in-store, alongside
other details such as additional product information.
Inventory management
Much of retailers’ focus should now be on inventory management as they are finally
beginning to acknowledge that having visibility of stock across channels is absolutely vital
if they are to create a seamless omni-channel organisation. Helping this is RFID, which is
enjoying a major rejuvenation.
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Among those showcasing the technology at NRF was Levi’s, which is testing RFID in three
stores in San Francisco using Intel’s Retail Sensor Platform to help it better manage its
stock by improving visibility in-store. This involves the use of scanner units in the outlets,
which can each continuously monitor the movements of RFID-tagged items across an
area measuring up to 250 sq ft.
This enables Levi’s to know the position of the individual items in each store to within a
three-foot radius. The system can also provide interesting insights such as highlighting
those products that keep being tried on but are then returned to the shelf, which could
indicate they are poorly sized. It can also indicate to store employees that an item has not
been on the correct shelf for a certain amount of time and that there is not a similar item
on the shelf so this should be addressed.
It is expected that improving on-shelf stock availability this way will prove increasingly
attractive to a growing number of retailers and many are now making the move to adopt
RFID. Among them is Tesco, which in May did a trial across its F&F clothing range within
three stores before rolling it out to a further 200 units. Such has been its success that the
technology will shortly be extend to 500 outlets.
Speaking at NRF Matt Newby, head of technology - stores stock, at Tesco, says: “We tracked
it for a number of years before investing in it. We can now serve our customers better as
the time spent counting products has been reduced by 93%. We ensure all our colleagues
are on the shop floor during the peak windows and not going into the stock rooms to
look for goods.”
Further proof that this is a major theme to watch out for could be seen at the conceptual
Alexander Black store showcased by BT where RFID was an integral component. It
involved various initiatives in-store such as being able to display images of selected goods
onto large interactive digital screens, allowing employees to pull up additional product
information on their tablets. In the changing rooms it is possible for customers to also
view additional product details on digital screens as well as request different sizes. These
requests flash up on the tablet of the sales assistant who can then use the store’s RFID
capability to easily locate the required items.
Although the store uses various glitzy digital technologies the most important aspect is
the connectivity behind the scenes. There has been a tendency in the past for the various
screens, employee tablets, and inventory management systems to sit in isolation but the
Alexander Black implementation sought to address this through having all the digital
devices sitting on top of a central content management system that links directly into the
stores’ PoS.
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Personalisation through blending digital and physical
This sort of personalisation will continue to be a major theme during 2016/17 but we can
also expect to see some much more futuristic examples that move things on to a
different level.
One of the most innovative examples of personalisation at NRF this year involved the
ongoing blending of digital and physical. GoInStore showcased a solution that seeks to
bridge the gap between in-store and online by connecting sales experts in the stores with
the online customer. It is currently being used by Liberty of London, Heal’s and
Georg Jensen.
Aman Khurana, co-founder of GoInStore, said: “We’re live chat but we’re creating a better
human-to-human connection with customers by also showing them the items through
video. It’s people who push customers over the line to purchase. We can answer their
concerns about price or technical issues.”
Sales assistants who are expert in certain areas can be called upon by online customers
to help them answer questions about products. The GoInStore assignment engine selects
the most relevant available person who then uses Epson Moverio smart glasses to give
the customer a rich visual and audio experience direct from the store.
The service is fully personalised by the sales assistant as they also have visibility on their
glasses of information on the customer from the retailer’s CRM system. Liberty of London
immediately throws up eight pieces of data on the customer – including their spending
and last product bought – that the sales assistant can utilise.
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Such solutions highlight another trend retailers must be aware of: the need to operate
with platforms that are extremely agile and flexible allowing them to adjust to
market changes and adapt their processes to better meet the evolving demands and
expectations of shoppers.
As well as enabling links to CRM solutions GoInStore can also be plugged into customer
service platforms such as Zendesk, which is another solution that works across channels.
In this case it provides intelligent customer issue resolving with the ultimate aim of
improving service levels.
Artificial Intelligence making positive impact
One of the most exciting areas of retail technology today revolves around Artificial
Intelligence (AI) and machine learning, which can boost retailers’ intelligent
personalisation capabilities.
These were certainly among the buzzwords at NRF this year as referencing them suggests
progressive-thinking even though the actual usage of the technology still remains on the
periphery for most retailers.
Retailers should arguably be more pro-active in this area because the technology can
provide them with a great amount of differentiation. It is certainly worth investigating and
there will undoubtedly be more examples of retailers taking the plunge this year to add to
those spotted at NRF this year.
Among them was outdoor clothing specialist The North Face that demonstrated its use of
AI through IBM’s Watson cognitive computing technology, which helps customers find the
right products for their specific purposes.
The Expert Personal Shopper (XPS) solution has been developed in partnership with Fluid
Group and uses natural language to ask the customer a series of intelligent questions.
It gradually hones in on the ideal product for them determined by their specific needs
discovered by the intelligent questions Watson asks.
Cal Bouchard, director of e-commerce at The North Face, says the company had been
unhappy with the ineffectiveness of the standard search and filtering tools that are
typically deployed by retailers: “We wanted it to be more personal and intuitive with
natural language being used so the customer could say, ‘I want a jacket for a skiing trip’”.
Throughout the interaction with the customer it throws up a selection of potentially
suitable products that then give visual cues to the shopper, thereby helping the
solution move closer to the ideal item. “Visual engagement helps and the results change
dramatically as more questions are asked. And customers can ask questions, which would
not be possible with filters,” explains Bouchard.
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During a two-month pilot phase 50,000 people used XPS, spending an average of two
minutes, and 75% stated they would use it again. It is now available on the site with its full
3,000 product catalogue represented. “The customers who gain most value are those who
don’t know about the product they want. It looks super promising to us,” she says.
Another early adopter of AI and machine learning is customer service platform provider
Zendesk – that works with Asos, Rapha and many other retailers. Its latest release includes
a ‘Satisfaction Prediction’, which uses machine learning for predictive analysis of customer
signals – such as the language they are using – that generate dynamic scoring in real-
time. This then determines how the interaction with the customer continues.
Previously there was frequent human intervention when matters escalated but the
intention now, according to Yasmeen Hyder, solutions consultant at Zendesk, is that as the
predictive aspect develops and learns it will enable Zendesk to deal with an increasing
number of issues on a completely automated basis, which she says is typically quicker
than human interactions and more efficient.
“Forrester has reported that customers prefer self-service to using the telephone to resolve
issues because it solves their problems more quickly and their satisfaction levels are
higher,” says Hyder.
Data analytics delivering insight
One theme that continues to envelop retailers is the use of data and this is only going
to escalate as a broader range of information sources are being brought into analytics
engines.
What will be increasingly important is the insight that is garnered from this data and
the way it is presented to retailers, with the improved visualisation of data now being
addressed by some solution providers.
Many examples were evident at NRF including Esri that delivers a location-as-a-service
solution to retailers such as Walgreens, Starbucks and clothing retailer Lululemon. It takes
myriad data inputs from numerous sources – generated by the retailer and from third-
party data providers - to create maps that visualise the movements of goods and people,
which can then be overlaid with other information.
Among the benefits it is bringing retailers is helping them develop their Click & Collect
strategies by identifying which stores would be best suited to offer the service, which train
stations would be the most effective for the retailer to potentially join hub schemes, and
where commuter lockers would possibly be the best solution.
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Are you prepared for unified commerce?
Capitalising on these many emerging trends will present
challenges for any organisation striving to meet the increasing
demands of today’s consumers. The ability for retailers to deliver
a consistent service to ‘connected’ customers is dependent
on the capability of the underlying IT infrastructure to share
information between the multiple systems and consumer
touch points within their physical and digital estates.
Retailers need to work with trusted partners to address these
trends and challenges together on a dynamic platform.
Working with suppliers that can tackle these issues now, and
who will evolve with retailers to help them continue meeting
the demands of consumers in the future, will be vital to long-
term success.
Commerce solutions and services allow retailers to offer their consumers a more engaged
and connected shopping experience. As a global retail technology provider of enterprise
and store level solutions, PCMS offers a wealth of experience and expertise to help retailers to
provide a superior level of service to their customers.
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A Retail Insider Production in association with PCMS