As experts of retail solutions, we here at ITK Solutions Group like to keep our eye on emerging retail technology trends to ensure that our clients are fully equipped with the tools necessary to meet their business objectives for 2016 (and beyond). With plenty of emerging retail technology to be excited about in 2016, it was difficult to narrow it down to just five. But the five emerging retail technology trends that we’ve selected below have all shown significant potential over the last few years, and it should come as no surprise that mobile devices are at the forefront of the discussion. We’ll start out our list with Beacon technology.
1. Beacon (BLE)
Beacon technology provides traditional brick-and-mortar retailers an opportunity to bring the power of digital marketing, in store. With nearly two-thirds of American consumers owning a smartphone, it’s easy to see the massive potential that beacon technology has for retailer’s still leveraging physical store locations to drive revenue. Especially when you take into consideration the appeal of having personalized offers sent out to consumers as they’re physically in the store location. So how does it work?
Beacons use Bluetooth Low Energy (BLE) technology, a more energy-efficient variant of other Bluetooth technology that permits two-way communication between devices, triangulating the position of each within a set perimeter. This eliminates the need for Wi-Fi, GPS and 4G, and is compatible with any Android or iOS smart device that’s Bluetooth enabled. These beacons provide valuable insight into, in-store, customer-behavioral data. Data that allows marketers to more effectively custom-tailor the offline experience customers have in their physical store locations. To be more specific, beacons send consumers (within a predetermined range) push notifications or alerts regarding their product offerings, discounts and much more. These alerts / notifications can be custom-tailored based upon the consumers previous brand interactions.
The caveat, there are more than a handful of consumers that might find this type of technology to be invasive and a violation of their privacy. Retailers that choose to leverage beacon technology will need to be up-front and clear regarding what data the beacons can collect, and how it will be used.
Traditional brick and mortar retailers have long desired a more efficient way of capturing valuable information about their customers. Specifically, information regarding their activity within physical store locations. Unfortunately for most retailers, it’s not as easy to capture consumer behavior data, in-store, as it is for online purchases. Yes, some retailers have implemented loyalty programs that have yielded some success, but that strategy still fails to measure critical KPI’s.
With Biometrics, retailers are able to view traffic flows within physical store locations, identify customers, custom-tailor offers, identify known shoplifters, view customer purchases, and the list continues to grow. More specifically, it’s a great way for retailers to capture valuable, in-store, customer behavior data. Thus allowing retailers to see which items customers were most interested in, and adjust their store layout / offers accordingly. While also making transactions more secure for their customers by using a biometric authentication process (fingerprint identification, facial recognition, hand geometry, vein recognition).
TechNavio, an independent research firm, predicts that Biometric technology will grow in the retail vertical at a 21.3% Compound Annual Growth Rate (CAGR), between 2016 and 2020. With security being a key driver for retailers choosing to adopt biometric technology.
3. Mobile POS Solutions*
Mobile Point of Sale (POS) solutions are already being implemented by retailers (both big and small). And every year, more and more retailers are choosing to adopt mobile Point of Sale (POS) solutions in an effort to enrich their customers’ in-store experience. 451 Research, LLC predicts that the mobile POS install base will increase at a 32% Compound Annual Growth Rate (CAGR), as Mobile POS technology continues to grow in existing verticals, and expands into new ones.
Implementing a mobile POS solution and integrating it into your current (ERP / CRM) solution, is much more than just a trendy way to check-out customers. It connects the dots between sales channels, and provides retailers a unified view of their customer purchase data. Mobile POS solutions not only increase sales through mobility, they also increase efficiency by allowing sales associates to check in-store / online inventory, right from their mobile device. Providing them with more information, and making it easier for them to better serve customers, in-store.
The growth of mobile POS in the retail marketplace can also be directly attributed to the shift in the way(s) consumers choose to pay for their products and services. A few great examples of emerging payment solutions include: Apple Pay, Samsung Pay, Google Wallet, PayPal, and Bitcoins. Retailers that implement mobile POS solutions that are configured to handle the aforementioned emerging payment solutions, will reap in the dividends as these new forms of payment grow increasingly more popular among consumers.
*Note: Mobile POS capability is contained in one of our solution offerings: Microsoft Dynamics AX for Retail.
4. Digital Currency
Digital currency (or cryptocurrency) comes in many different forms, but for the sake of simplicity, we’re going to focus on Bitcoins for this blog post. Mainly because it’s the most popular in terms of digital currencies, and it’s already being accepted by some of the larger retailers such as Amazon, Overstock, Microsoft, Expedia, and TigerDirect.
Simply defined, Bitcoins are a form of digital currency in which encryption techniques are used to regulate the generation of currency and verify the transfer of funds; operating independently of a central bank or government (decentralized). If that definition is too cryptic, refer to this video for a more detailed explanation.
As a retailer, it’s not imperative that you accept Bitcoins as a form payment. However, Bitcoins can be advantageous for retailers in many ways. A few of the main advantages being: reduced transaction fees, the elimination of charge back fraud, access to an entirely new customer base, and the fact that Bitcoins don’t require a middle man between the retailer and the customer (banks / government).
The growth of the Bitcoin community has seen a significant spike over the past few years. However, the value of a Bitcoin drastically dropped 67% in 2014 (from $951.39 to $309.87 per Bitcoin). The fluctuation in value is a big reason why most retailers are reluctant to accept Bitcoins as a form of payment, which is understandable. But, it’s still important that retailers pay close attention to the digital currency market, and make a plan to invest in the infrastructure that’s necessary to accept these new forms of digital payment.
5. Social Media Platforms
While social media may not be an emerging technology, it has only recently become a place for retailers to directly sell to their customers. And over the past few years, social media has shown significant growth as a sales channel (both direct and indirect). Social media giants like Pinterest and Facebook have given retailers the option to embed “Buy now” buttons on their posts. Making these social media platforms a direct sales channel for their goods and services. Business Insider mentions that the top 500 retailers earned $3.3 billion in 2014 from social media channels alone. And that number will only continue to grow as more social media platforms start to pop-up, and as marketers learn how to more effectively leverage the strengths of each platform for their selling efforts.
Frequency is another big reason why social media is growing so rapidly as a sales channel for retailers. The majority of users will login into one (or more) social media platforms, on a daily basis, and that type of frequency allows retailers to stay top-of-mind. It’s also worth mentioning, most social media platforms provide retailers an option to create a custom sponsored post, or paid advertisement along the sidebar; targeted toward specific customer segments. Both of which have shown to directly increase the amount, and quality of referral traffic retailers see on their ecommerce sites.
When used to its full potential, social media can be an extremely powerful tool for retailers looking for new ways to sell their products /services, build brand awareness, create brand advocates, drive traffic (in-store and online), and much more.
For all your system integration and mobile POS needs, contact us at [email protected]. And to stay In The Know, connect with us via social media, and keep an eye on our Knowledge Center for new content.