Prepare for a future of unified commerce - Retail Insider · 2020-02-13 · 201617 etai ecnoog rend...

White Paper

2016/17 Retail Technology Trends

Prepare for a future of unified commerce

A Retail Insider Production in association with



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.




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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




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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.

© 2016 Retail Insider

All Rights Reserved.

www.pcmsgroup.com

A Retail Insider Production in association with PCMS

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