Retail Technology

Objective of this Report: Report lets you to know the different technologies that are implemented in retail stores, and how retail players are applying these technologies to reduce the operational and technological gap in order to compete in this globally competing environment.

Introduction:Technology touches almost every aspect of commercial activity. And with the rapid pace of technological innovation, its impact on business enterprise will only increase in the future. Like many other industries retailers are being impacted by technology advancements, as well as changing shopping habits.

Retailing is a technology-intensive industry. It is a well-known fact that the retail industry always works on razor thin margins and the key to survival lies in optimization of resources both in space and time dimensions as well as maximization of customer satisfaction. Successful retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and ultimately save cost. Access to timely and even real-time information to a wide variety of channel and trading partners, sales personnel, line managers, store managers etc. is the key to achieving this.

Over the years as the consumer demand increased and the retailers geared up to meet this increase, technology evolved rapidly to support this growth. It is technology that will help the retailers to score in such fierce competition. There are hardware and software tools that have now become almost essential for retailing. Consumers have come to expect more value and higher service levels. As a consequence, the technology continues to grow and retailers search for ways to measure technical business value and to balance the effective utilization of the technical resource.

Retailers want to get more value out of technologies and ensure they are spending their limited resources in ways that improve their overall offer to the customer. Technology has proven to be a competitive weapon in retail, which is a dramatic shift from a decade ago. In response, retailers generally need to become more disciplined in managing the IT function. Completing and delivering IT projects on time and on budget is overwhelming enough without the project team considering their project’s interdependencies with other business initiatives and corporate goals

Overview:

Technology has transformed the buying behaviour of customers everywhere. Technology in the store is all moving toward integration and more and more savvy customers. POS is undergoing major changes because of broadband access, the need and ability for inventory visibility, customers ordering online, returns and pick-up in the store and also the movement toward an ASP (application service provider) model. It is broadband that will help to transfer the information fast and help retailers to serve their customers on time. Technology offer retailers the potential to know exactly how many customers are in their stores by department and time of day.

Technology is changing everything in Retail Sector

Technology’s impact is heavily reflected in the retail sector and for good reason. With all the changes and challenges within retail, retailers, merchants and suppliers all need to find new ways to catch attention, simplify processes, make impactful lasting impressions and generate profit.

Few Common Technologies used in Retail Industries:

Bar coding and Scanners:

Bar coding and scanners Point of sale systems use scanners and bar coding to identify an item, use pre-stored data to calculate the cost and generate the total bill for a client. Tunnel scanning is a new concept where the consumer pushers the full shopping cart through an electronic gate to the point of scale. In a matter of seconds, the items in the cart are hit with laser beams and scanned. All that the consumers have to do is to pay for the goods.

Advantages of Bar coding are

Fast and Reliable Data Collection: Faster Data Entry: A barcode scanner typically can record data five to seven time as fast as a skilled typist.

10,000 Times better Accuracy: Keyboard data entry creates an average of one error in 300 keystrokes. Barcode data entry has an error rate of about 1 in 3 million.

Reduced Labor Costs: This is the most obvious benefit of barcode data collection. In many cases, this cost savings pays for the entire data-collection system. Do not put all of your attention on this benefit, however. Even though this is the most apparent benefit, it is often overshadowed by even greater savings from other areas.

Reduced Revenue Losses Resulting from Data Collection Errors: This benefit often surpasses the savings in labor costs. You know that if you make a significant error on an invoice in the customer's favor, you will never hear about it again. However, if the error is in your favor, you will hear about it immediately. In most companies, it does not take many errors to amount to a great deal of lost revenue.

Necessary Inventory Levels: Using barcodes are one of the best ways to reduce inventory levels and save on capital costs. Keeping a tight handle on inventory can save significant amounts of money.

Improved Management and Better Decision Making: Although hard to measure, this is an important benefit. In many cases, improved management due to automated data collection technology could be the best benefit of a barcode system. A barcode system can easily gather information that would be difficult or impossible to gather in other ways. This allows managers to make fully informed decisions that can affect the direction of a department or company.

Faster Access to Information: This benefit goes hand in hand with better decision-making. With better information, you can gain opportunities and get the jump on the competition.

Few Barcode providing Companies

http://www.kcsi.ca/barcoding_adv.htmlhttp://www.slideshare.net/lordriby/impact-of-technology-on-indian-retail-stores

Payment through Plastic Money:

Payment through credit cards (plastic money) has become quite wide spread and this enables a fast and easy payment process. Electronic cheque conversion, a recent development in this area, processes a cheque electronically by transmitting transaction information to the retailer and consumer’s bank. Rather than manually processing a cheque, the retailer void sit and hands it back to the consumer along with the receipt, keying digitally captured and stored the image of the cheque, which makes the process very fast..

Advantages of plastic money to Customer Convenience- It can save you time & trouble Instant cash- cash advances are quick & convenient Record keeping- CC statement can help you track your expenses Purchasing power-cards made it easier to purchase things. Now we don’t have any need to carry

hard cash in a large amount. Credit Limits-You get an extra amount to spend with your card. This extra spent money you can

return before a fix time schedule Mostly credit card offer additional benefits, as discount from some particular stores, bonus in airline fare, free insurance policies and much more

Advantages of plastic money to merchants Higher spending- Consumers spend an average of 68.5% more when they pay with a credit card

instead of cash Greater   reliability-With the benefit of a merchant account, you could have guaranteed

payments without fear of bounced or missing checks Faster than invoicing- Invoice payments could potentially take up to 90 days and require more

administrative time than card payment

Few Credit and Debit Card issuing Banks

http://www.slideshare.net/smoturi1/plastic-money-27695494http://www.slideshare.net/lordriby/impact-of-technology-on-indian-retail-stores

ERP (Enterprise Resource Planning) System:

ERP System Various ERP vendors have developed retail-specific systems which help in integrating all the functions from warehousing to distribution, front and back office store systems and merchandising. An integrated supply chain helps the retailer in maintaining his stocks, getting his supplies on time, preventing stock outs and thus reducing his costs, while servicing the customer better.

Advantages of using ERP System in Retail sector Retail specific components – Unlike a general ERP package, retail ERP suite offers retail centric

components that are customized to meet the specific requirements of a retail organization in an effective and efficient manner. This makes a retail ERP suite much more suitable to meet the specific requirements of a retail organization.

Segment  specific  expandability  option – Within the retail sector, there is a wide variety of different segments that vary in their nature and scope of operations. A retail ERP package has provisions to meet the varying needs of the different segments within the retail sector.

Support for the store system– Retail ERP suite offers support for the store systems that form the pivot of a retail business. The critical functions include keeping track of the inventory, ordering and replenishment, loss prevention and task management. This makes retail ERP system suited to the specific needs of a retail organization.

Configuration and scalability – A good retail ERP system allows a high degree of customization and is easily scalable to attune itself to the size of the organization and its level and scope of operations. Such configuration and scalability prove to be a boon in managing the retail operations across an enterprise. This allows a retail ERP system to grow with the organization.

Phased   implementation   support – Modern retail ERP systems provide support for phased implementation. This feature allows the software package to be implemented in a step-by-step incremental manner rather than in one go. This makes the transition to an ERP package a lot easier. This feature allows the users to acclimatize themselves to an ERP package that may initially seem complicated to use.

Support for advanced functionality – Modern retail ERP systems provide support for advanced functionalities that is helpful in the decision making process such as formulating pricing strategies, merchandise planning, inventory optimization and store execution. The advanced functionalities help the users formulate business strategies to introduce efficiencies in the critical business processes. The top management uses this feature to set the benchmarks and achieve the desired results.

Work flow automation and enterprise process management – Modern day retail ERP packages offer workflow automation and enterprise process management to make the workflow smooth and seamless across the entire enterprise. This allows the management to monitor and keep track of the workflow while also undertaking the enterprise process management leading to the identification and removal of any inconsistencies in the business process.

Technology   and   application   integration – A good retail ERP system allows technology and application integration to allow a platform independent, seamless transfer of processes across different modules running on different technologies in an enterprise wide environment that may

include interaction with legacy systems and external entities such as the suppliers and the customers. Such integration provides the critical enterprise-wide view to the management.

Few ERP systems providing companies

http://www.dmsretail.com/erp.htmhttp://www.slideshare.net/lordriby/impact-of-technology-on-indian-retail-stores

CRM Systems:

  Customer   relationship  management (CRM) is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.

In CRM systems the rise of loyalty programs, mail order and Internet has provided retailers with real access to consumer data. Data warehousing & mining technologies offers retailers the tools they need to make sense of their consumer data and apply into business. This, along with the various available CRM systems, allows the retailers to study the purchase behaviour of consumers in detail and grow the value of individual consumers to their business

Advantages of CRM in Retail sector CRM for retail industry includes classes and workshops which make it possible to gain additional

experience Using CRM one can also take the advantage of repeated demonstrations CRM creates mailboxes for meeting customers additional requirements CRM provides clients with an opportunity to try the product before purchasing it CRM for retail industry helps to maintain communicational line with customers CRM helps to pay additional attention to client’s feedback CRM lets the clients to share their experience with other customers CRM helps to treat your clients as friends CRM makes it possible to stimulate clients with the help of gifts and additional bonusesFew More advantages are easy and effective targeting attracting new clients efficient marketing strategies and managing campaigns lifelong relations with customers enforce of selling and marketing processes predicting high quality service

customer support by means of call centers

Characteristics of CRM

Relationship management is a customer-oriented feature with service response based on customer input, one-to-one solutions to customers’ requirements, direct online communications with customer and customer service centers that help customers solve their questions.

Sales force automation. This function can implement sales promotion analysis, automate tracking of a client’s account history for repeated sales or future sales, and also сoordinate sales, marketing, call centers, and retail outlets in order to realize the sales force automation.

Use of technology. This feature is about following the technology trend and skills of value delivering using technology to make “up-to-the-second” customer data available. It applies data warehouse technology in order to aggregate transaction information, to merge the information with CRM solutions, and to provide KPI (key performance indicators).

Opportunity management. This feature helps the company to manage unpredictable growth and demand and implement a good forecasting model to integrate sales history with sales projections.

Some of the CRM System Providing Companies

http://www.slideshare.net/lordriby/impact-of-technology-on-indian-retail-storeshttp://www.crminfoline.com/crm-articles/crm-retail.htm

Cloud Computing in Retail:

Cloud-based solutions are already being used by a growing number of retailers to support their most important business functions including the mission critical point of sale. While some concerns remain about data security and application uptime, there’s significant movement within the retail industry towards cloud based on demand solutions, and it’s easy to see why. Unlike many other technologies the retailers have to adopt to meet their business needs. It’s as if cloud computing was designed specifically with the cost-conscious, data-deluged retail enterprise in mind. Retailers can achieve savings from lower initial capital expenditures, and the usage based pricing model used by most cloud based applications aligns well with the spiky, seasonal nature of the retail business. Cloud based technologies also provide the flexibility to scale up quickly, supporting IT deployments for everything from pop-up stores to more

permanent expansions and to scale down just as quickly when business conditions change and a new approach is needed.

Advantages of Cloud in retail Sector A good cloud provider can easily help the retailer in understanding patterns and trends within

large databases. Due to large database It can be further utilized for creating analytical models, and to provide an

edge to decision making. Thus retailers can increase their ability to forecast their customer's behavior and plan accordingly.

Retailers can then develop customer programs, marketing, merchandising and pricing strategies to attract more business. The cloud provider themselves design and provide such retailer specific plans.

Another important area of cloud application will be inventory management. Real time data and cloud architecture will largely reduce the problems like stock outs and overages. As well known, online retailers do not have inventory managed by themselves. Instead, it is done by the manufactures. Cloud computing can provide an efficient utilization of logistics, which will keep losses to the minimum in inventory management. What the online commerce does can be extended to whole of retail sector. Besides, as the cloud provider will be serving numerous retailers, they can very well manage difficult situations like stock unavailability. Cloud providers can provide valuable advises to retailers regarding product availability and back-up stock from forecasts. They can get realistic forecasts by analyzing huge amounts of data from numerous retailers. Thus retailers can develop a supply chain where the right product arrives at the right time

Few Cloud Computing service providing companies

      http://en.wikipedia.org/wiki/Customer_relationship_managementhttp://www.fibre2fashion.com/industry-article/29/2883/the-future-of-retail-industry1.asp

Mobility in Retail:

In a fast paced mobile market, the adoption of innovative mobile technologies can play a crucial role in an organization's business strategy thereby delivering significant value and heightened experience to their customers.

Retail consumers today are texting, talking, communicating, buying, searching, watching videos, and taking photographs all on their mobile devices. With Global Smart Phone sales expected to cross 1 Bn by 2015 and the Tablet fever catching on, retailers have started looking at mobile as another important customer touch point.On the web front, by integrating their e-Commerce strategies with the mobile environment, retailers are trying to leverage the mobile channel and add value to clicks from the Web and bricks of physical stores.On the store front, in their quest to make the customer in-store experience a memorable one, retailers are once again turning to mobility solutions for checking in the customers as they enter the store, scanning products, receiving offers through mobile coupons, making payments, and producing digital receipts among a host of other features.With an increasing number of retailers embracing mobility solutions, from in-store to supply chain, from sales and marketing to decision making levels, mobile technologies promise to empower all facets of the Retail business.http://www.hcltech.com/retail-consumer/mobility-solution-retail

Today, mobility in retail has not only become a vital channel for branding and advertising but also is an enabler that can act as a force multiplier, in near and long-term future, to the overall operations in a retail organization. Retail mobility solutions are making processes leaner and swifter not only with their own capacity but by also complementing other technologies. In short, mobility is creating new possibilities for retailers to manage their stores and make shopping effortless and pleasurable. From helping their consumer locate their nearest stores, to browsing catalogues on-the-go to read reviews of products and compare prices, retail mobility solutions have the power to integrate various components of the buying cycle into a seamless and fun exercise.

Mobile web browser is used widely than web applications by shoppers

Advantages of Mobility service in retail sector Mobility improves the Return of investment (ROI) and lowers the total cost of ownership (TCO) Mobility provides alternate channel for sales Mobility superiors the consumers shopping experience Mobility provides direct access to Customers Mobility helps in enhancing brand value Mobility helps in analytics to understand consumer behaviour Mobility services helps in boosting the employee productivity

Few mobility services in Retail industry:

Mobile POS Self-Checkout Mobile Payment

Mobile Couponing Inventory Management Direct Store Delivery Warehouse/ DC Management

Few Mobility service providing companies

     

http://www.xcubelabs.com/blog/retail-mobility-welcoming-the-consumer-on-mobile/

Omni-channel Retailing

Omni-Channel Retailing is the evolution of multi-channel retailing, but is concentrated more on a seamless approach to the consumer experience through all available shopping channels, i.e. mobile internet devices, computers, bricks-and-mortar, television, radio, direct mail, catalog and so on. Retailers are meeting the new customer demands by deploying specialized supply chain strategy software

The omni-channel consumer wants to use all channels simultaneously, and retailers using an omni-channel approach will track customers across all channels, not just one or two. Using omni-channel retailing while working with the "Connected Consumer", [1] all shopping channels work from the same database of products, prices, promotions, etc. Instead of perceiving a variety of touch-points as part of the same brand, omni-channel retailers let consumers experience the brand, not a channel within a brand. Merchandise and promotions are not channel specific, but rather consistent across all retail channels. The bricks-and-mortar stores become an extension of the supply chain in which purchases may be made in the store, but are researched through other "channels" of communication. [2] With omni-channel retailing, marketing is made more efficient with offers that are relative to a specific consumer determined by purchase patterns, social network affinities, website visits, loyalty programs, and other data mining techniques.

omni-channel retailing trends and ideas

 Making use of social media- Peer-to-peer communication is one of the most effective ways to sell something. Brands using social media and social communities are stepping out of the traditional advertising model and allowing customers to help build the brand through their own discussions and recommendations. Social is definitely part of an omni-retail shopping experience as experiments in stores prove

 Integrating customer reviews- Like social media, reviews are powerful advertising tools. Shoppers tend to trust the experiences of their peers more than brand advertisements. Companies are beginning to take advantage of the growing mobile trend to make reviews and product guides available in-store. Customers can access this information while they shop and use it to help make purchasing decisions. Being able to read reviews and see detailed product information while shopping creates a comprehensive buying experience that can help drive sales.

Use digital means to personalize physical shopping- Consumers enjoy a personalized shopping experience. Being greeted by a trusted associate at a favourite store, having someone remember their buying preferences and being shown what they want rather than sitting through generic sales pitch all make shoppers more likely to buy. Some stores are rolling out apps that help their employees accomplish these things with each customer. Other apps deliver information about in-store sales and events to customers as they shop. This is one of the applications the retailing industry is testing most.

Technological advances in-store- As technology becomes more powerful, businesses will be able to offer more detailed, personalized shopping recommendations. In-store stations that allow customers to interact with the products available for sale can collect important information about things such as clothing size and buying history, allowing retailers to deliver comprehensive product guides to each individual consumer.

Merging social and local- Location-based social media like Foursquare and Facebook Places allow businesses to use social channels to market to local customers. These services link mobile users to their friends via "check-ins," showing who has stopped where and any comments they had about the experience. Businesses looking to get in on the action can offer coupons, sales alerts, messages about important events and more, delivering advertising and information to shoppers as they go about their daily routines

Difference between  Multi-channel, Cross-channel, Omni-channelThe term multi-channel describes the experience of a customer who uses the different channels made available by a company so that they can complete their purchases. The different channels include shops, catalogues, the Internet, mobile, tablets, TV, call centres etc.

Multi-channel is not a new concept because before the advent of the Internet and mobile it was possible to make a purchase on different channels including shops, call centres, catalogues etc. What is new, however, is the rise in the number of channels which can be used nowadays such as desktop computers, smartphones, tablets, interactive terminals, smart TV. The number of channels will continue to increase with smart items such as cars, fridges etc.

The term cross-channel describes the experience of a customer who has used a combination of several different channels for the same purchase. For example, the customer prints a product configuration on a company’s website and will then go in-store to make the purchase. The customer may also choose the product they want to purchase from a company’s catalogue and then go and buy the product directly on

the company’s website. Another example involves a customer who makes the purchase through their TV set, and then goes to collect the product from the nearest store.

The term omni-channel describes the simultaneous use of two channels, for example using a mobile phone device in-store or a tablet whilst watching TV. The term is also used to describe the necessary coherence between the different channels so that it is easy and practical for customers to interact via the different channels. This means that the configurations and choices made on one channel must be memorised and considered for each channel. Could you imagine if you had to recreate an account for the different channels used, e.g. for desktop computers and tablets, or the in-store checkout.

http://www.selligent.com/en/blogs/tips-practices/the-rise-of-omni-channel-retail-definition-and-5-tips/http://blog.atinternet.com/en/index.php/2013/11/07/market-trends/series-multi-channel-cross-channel-omni-channel-retailing-business-forms-12/1579

Radio Frequency Identification (RFID)

RFID is a globally accepted technology, which has a great success in the area of supply chain management and particularly inventory management. Businesses benefit from this cost efficient opportunity to scan and track inventories. The tracking of items with RFID devices is applied in a variety of areas, such as retailing, healthcare and traffic management. In Retail industry RFID is helping retailers around the world improve customer satisfaction and increase sales. The technology is transforming the retail industry by offering retailers real-time visibility into inventory and product movement to improve store productivity and loss prevention. Many of the world's largest retailers have mandated RFID tagging. This move affects more than 200,000 manufacturers and suppliers, driving the worldwide market for hardware and software to support RFID. RFID in Retail Industry is one day workshop to help explain retailers and marketers best RFID practices, reducing out-of-stocks, automating inventory management, boosting customer loyalty, customer personalization , presenting specific and proven retail applications through case studies that help participants build their business cases and calculate their return on investment.

Some of the advantages of using RFID in Retail industry

Labour saving

Improved vendor collaboration

Expansion plans and more affordable stores

Theft deterrent

Supply chain visibility

Impact of social Media in retail Technology

Social media has changed the way we connect, share and shape relationships with people and communities around the world. The online world is moving rapidly, and brands and retailers have realized the importance of decoding the social networking scene and its users, while they decide how they will play their role and gain more presence in the market.

Today, shoppers are connected to retailers and brands than ever before by interacting on Facebook and Twitter, by sharing user-generated content, and even by creating videos and blog posts describing products. This creates a new opportunity for brands and retailers to leverage social media across the whole value chain. The challenge is determining the right time and approach to turn ongoing social media conversations into an improved shopping experience avoiding the clutter.

Also, the impact of customer feedback has never been stronger: it reaches companies much faster and it spreads to a much broader audience with the advent of social media. The customer has never been so empowered in the history of retail.http://www.shopperception.com/blog/the-impact-of-social-media-in-retail/

 Mobile app with Cloud based technology in retail sectorWith today’s buyers embracing the mobile mindset, retailers need to figure out how to be a part of that mindset in a way that is both engaging and responsive. Mobile applications allow retailers to engage with consumers virtually any place and any time, while cloud technologies help retailers quickly respond to changing consumer expectations with an infrastructure that is both flexible and scalable. Combined, they are the engines that support a retailer’s connection with a new consumer.

Mobile app Cloud based technologyMobile applications are evolving at an astounding pace. The first apps offered simple functionality, such as an online catalog or access to a scaled-back version of the company website. But, that is quickly changing. Consumers want to manage their daily lives in the context of where they are at the moment and what they are doing. And, they want

Cloud-based technology can break down barriers to innovation, significantly reducing the cost and speed of experimentation. It is a natural fit for retail, given the fast pace of change and seasonal demand spikes of the business. Retailers can experiment with new applications and campaigns to reach mobile consumers by turning up or down

to have a little fun while they do it. Many of the mobile applications available today benefit the traditional brick-and-mortar stores by improving the in-store experience or driving traffic to stores with discounts. While it’s helpful to provide product information and coupons, shoppers are looking for a more useful, integrated experience.Consumers have sophisticated expectations often set by the retailer’s web presence, so it will be important that retailers provide mobile capabilities that meet such needs. It’s no longer enough to offer online catalogs optimized for mobile phones. At a minimum, everyone should be able to access the same ‘favorites’ lists they created online, see peer reviews, track shipments, and order products directly from their phone. Because there are many apps now competing for attention, an effective mobile commerce strategy should include creating a compelling experience for the consumer. The mobile app must deliver what a user needs now, in just a click or two, using information they’ve already provided. To be compelling, the experience needs to not only be useful, but personal, fun, and optimized for mobile devices. It’s also beneficial to offer a method to cache information so that user data is saved if the consumer moves out of signal coverage

services as needed, avoiding the expensive and time-consuming capital investments of in-house services.Specifically, Computing as a Service (CaaS) can help retailers avoid the large cost of capital expenses involved in technology projects and reduce project operational costs and time to delivery. CaaS can offer integrated security, automated provisioning, storage, and automated backup services to support business continuity.Cloud-based technology also takes advantage of mobile and public networks for connectivity and service delivery. When data, information, and services live in the cloud, they can more easily follow an individual wherever and whenever that information is relevant or most needed. Information no longer needs to reside on the device but can be served up dynamically through any Internet connection.

http://www.verizonenterprise.com/resources/whitepapers/wp_near-future-of-retail_en_xg.pdf

Conclusion: It is apparent that retailers are now investing more than ever in technology. They are demanding technologies to help them adapt to the ever-changing needs of their marketplace. They are using every kind of technology available to reduce their cost of doing business, and to make them the low cost provider. And finally, they are requiring a vast array of applications that will help them to take a proactive approach to their relationship with retail consumers. Since retail technologies are readily available in todays market place, and most of the products sold by different retailers are virtually identical, the only true difference between retailers is their ability to use technology to manage their business and give them the competitive edge.