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Retail tech trends to watch for in 2014

January 8, 2014 by Doug Stephens — President, Retail Prophet Consulting

We will see more disruption in the next ten years of retail than we did in the previous one thousand. Below are a few that may come to life in 2014:

The new industrial revolution

Twenty-five percent of working Americans are on some form of government assistance. When you examine the fast-food industry however, that figure more than doubles to 52 percent. US Fast Food workers are protesting to get minimum wage raised to $15. Perhaps most incredible is the fact that if minimum wage had kept up with inflation, it would be somewhere above $16 per hour.

The reality is that any increase in wages that even approached this level would put a company like McDonalds out of business. And so, they and others like Walmart find themselves in the untenable position of not being able to pay more but also not able to sustain the barrage of bad PR this is causing. This puts low paying brands in a position where increased automation of human service tasks is likely the only way out.

The first wave of such automation has already begun, with McDonalds Europe installing 7,000 touchscreens in 2011 and Walmart rolling out both 10,000 self-checkout systems and an expanded test of its Scan and Go mobile app in 2013. Look to companies broadening automation to include food and beverage preparation, merchandising, sales, customer service and other more skilled positions.

The 'phygital' store

2013 was a year of clear steps toward blurring the lines between online and offline commerce. EBay for example launched what it calls "digital storefronts" in both New York and San Francisco, bringing a wholly digital shopping experience to the physical world. Consumers can shop, order and pay for goods, which are delivered locally within an hour. Not only do these installations add an element of surprise and variety for shoppers but they also allow brands to set up shop in opportune and often less conventional locations. They need no inventory and apart from periodic technical support, they require no staffing.

They're also a boon for mall owners, allowing for quick temporary storefronts during store build-outs or renovations and the ability to lease small, awkward spaces that aren't suitable for full, physical stores. Expect many more of these sorts of "phygital" concepts in the coming year.

The intelligent store

Increasingly, stores will be infused with the same level of analytic intelligence that online marketplaces currently enjoy. Their knowledge of who is in the store; where they move in the space; and the products they interact with, will all be instantly and continually calculated. Hot and cold traffic zones of the store as well as the realtime performance of promotions, personnel and displays will be evaluated. Technologies such as video analytics, mobile ID tracking, and sensor networks will give the store a level of consciousness.

Apple, Estimote and others have recently introduced bluetooth low energy (BLE) technology to the market that can sense (on an opt-in basis) who specifically is in the store. The technology also allows the retailer to deliver personalized messages and offers to those customers when they are precise locations within the retail space — down to a matter of inches. Steadily, our online and offline shopping preferences, histories and behaviors will meld seamlessly together. When we walk into a physical store, our browsing history will follow us and inform our physical shopping experience. The store and the people in it will know who we are and how best to serve us based on our unique tastes, preferences and purchase history.

About Doug Stephens

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