How technology is likely to affect retailers in the next five to 10 years.
When you look at technology in retail, one thing is abundantly clear, and that is that mobile technology is going to play a key role in its future. by Phil Burroughes
With 97% of people not leaving home without their phone, this is the most direct, reliable and personal way to communicate with shoppers.
The advent of the iPhone, and the apps market that it has spawned, means that the smart phone is now more universally used and accepted across a broad range of people. And where Apple’s product has been the dominant driving force, we are now seeing others creep into the market. There has been real growth in Google’s Android platform over the past six months, and Nokia’s OVI platform is getting a huge amount of momentum. The latter is thanks in no small part to the Tesco shopping app that has been developed for it, which allows you to use your mobile as your Club Card.
On top of this, Nokia already has phones on the market that are capable of handling cashless payment. Undoubtedly, this is another area that will be a key driver for the future, as people become more aware and confident using these systems – this is already happening in London with Oyster. What will be interesting to see is whether this is done on loyalty cards or straight to mobile.
Taking people out of the equation
What this is likely to spark is the removal of the people element in Supermarkets, particularly at checkouts. Potentially, this could give rise to the customer entering a store, picking up a basket and then registering that basket to their phone; as items are placed in the basket they automatically register on their phone and are paid directly from there.
Geolocation could well prove to be another key technology, as it could allow shoppers to see offers that are around them and to be sent targeted messages when they are in certain areas of the store. However, it needs to become more sophisticated as it is currently only accurate to within 10 metres, which is not that useful in an in-store environment. When this gets closer to one metre then this will probably change.
Delivering personalised messages
While all of the above is theoretically possible now, I believe we are likely to see more advancements along the lines of a product that was available in the US around three to four years ago. Clever Cart was a system that allowed shoppers to put their loyalty card into a special reader, attached to the cart, with a digital screen on it. Relevant and personalised offers and messages could then be displayed as you moved through the store.
But beyond this, the large retailers also need to consider how they interact with their customers outside the store environment. For example most of the big supermarket brands now have customer magazines that have online versions, and there is a great opportunity here to give people the options to add items directly to their shopping basket when they are reading something like a recipe.
Again this is all possible now, and as stores get more sophisticated and the back-end delivery systems get more developed they will be increasingly able to deliver on these sorts of mechanics.
Retailers have the customer’s needs at heart
However, with retail it’s very difficult to look into the future and say that these technologies will be available and this is what will happen, as the big retailers will only adopt them when they become cost effective. For example, at some point all point-of-sale promotion material will be replaced by screens, but at the moment it is still more cost-effective to do this with paper.
The retail environment will always lag behind in technology terms as the big retailers need things to be globally accepted before they can embrace them – not to mention the fact that they are also extremely costs conscious.
And retailers understand that loyalty is the most important thing for them from their shoppers, and every decision they make will be geared towards the needs of their customers. This means any technology they invest in has to add serious value for their customers before they embrace it.
Crucially, retail technology is about meeting the needs of the shopper, not using that technology to drive the needs of the shopper.
Phil Burroughes is commercial director at retail media specialists RMI
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