Are retailers on cloud nine over new technology?
Are retailers on cloud nine over new technology?
We took a dozen senior IT folk from UK retailers with us to NRF. After two days trudging round three aircraft hangars full of technology, being dazzled by the very latest applications, we got together to discuss what will work – and what needs work. BT Expedite CTO Steve Thomas gathered feedback and has the verdict on nine key technology areas:
1. Free wi-fi
Most large format outlets have a steel frame which, if you remember your O-level physics, forms a Faraday cage that doesn't let radio waves in or out. So 3G coverage in retail is very patchy. If retailers want to encourage their customers to use their app in store, free wi-fi makes good business sense. With wi-fi, shoppers will always need to pass through the retailer's landing page which is a terrific opportunity to promote their products. What's more, the retailer can often get anonymous data about which other sites their customers are visiting. Free wi-fi will also be important for the 2012 Olympics as foreign visitors hate roaming charges but like wi-fi. Burberry already offers it free. Tesco and Food Lion announced at NRF that they were going to. Definitely one for 2011.
2. Cloud computing
A very confusing area complicated by there being no firm consensus on what it actually is. Long term, big picture, our customers don't see running data centres as a core activity and welcome discussion about hosting their enterprise applications elsewhere. But, they tell us, the devil is in the detail; notably (1) how to get from where they are to a fully hosted environment without increasing costs in the short term and (2) what manner of integration framework might be appropriate.
Surprisingly, there wasn't much talk about cloud computing at the show. Pretty much all the application vendors claimed to offer hosted or software as a service (SaaS) delivery models but the big SIs such as IBM and Wipro were focusing on their software rather than infrastructure-as-a-service.
3. Digital Signage
This has come on in leaps and bounds over the past five years. Intel showcased some HD screens of such astonishing quality that even seasoned signage sales people took off their hats. Our customers saw the value of being able to control point of sale messages centrally but still have two major concerns. Firstly, do shoppers really take notice of the signs or do they merge into the background as Tesco found with its in-store media network? Secondly, can the digital signage take a simple feed from existing content? No retailer can really afford to have to photograph its products twice, once for the web and a second time for HD 3D screens.
4. Electronic shelf edge labels
No interest from our retailers. None at all.
Every stand had an application running on a tablet and three out of four put you in a raffle to win an iPad if you let them scan your delegate badge. While many manufacturers have tablet devices on the market, this show was wall-to-wall Apple. Our customers explained how they'd spent the last twenty years keeping Macs out of their corporate IT but either had been or would shortly be overruled by their management. Apple technology is here to stay and technology vendors need to shape up to be able to offer support.
There was a huge amount of innovation around F2F payments ranging from fitting sleeves around iPads for card transactions to loyalty apps with embedded payment software so that customers can transact on their own devices. The business case, at least for US retailers who are incandescent about the commissions charged for credit cards, is to steer shoppers to the most favourable tender types. For example, the payment screen on your app would highlight store cards or gift cards and put Visa and Mastercard "below the fold".
Here at BT we've been big fans since we implemented the automated stock counting system in M&S stores in 2005. We see a strong role for the technology supporting cross-channel retailing as inventory accuracy is becoming of critical importance. There was surprisingly little RFID at NRF, just Avery Dennison (BT's partner) showcasing its fashion solution. None of the big application vendors or SI's mentioned it.
The marmite of the retail technology world; some people are evangelical about self-checkout while others see it undermining the longstanding relationship between a retailer (represented by its staff) and its customers. Undeniably, the machines do tend to be rather ugly although if you can put the transaction on the customers' phone then self-checkout hardware could be rather smaller. The verdict: we can all see advantage in reducing the queues in fast fashion but still struggle with how you remove the security tags. One to watch for 2011.
9. 3D virtual fitting rooms
Microsoft cancelled their prime stand by the main entrance two days before the conference which was very fortunate for one lucky 3D virtual fitting room vendor. Our small group wasn't impressed. The garments don't hang properly so you can't genuinely see how they would look on you and (yet again) all the clothes would need to be re-photographed for this application. Maybe one for 2013.
Get more insight on NRF 2011 and the latest retail technology trends on the BT Expedite blog at http://blog.btexpedite.com or watch the BT Expedite NRF 2011 Video Overview
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