10 Technology Trends

That Will
Revolutionize Retail
The National Retail Federations annual Big Show kicks
off in New York this week. Thousands of industry
insiders will be there to explore the future of brick-andmortar stores, global expansion, mobile commerce, the
customer experience, and much more. Theres an entire
track of sessions on big ideas.
Its a pivotal time for this kind of close examination in
retail, as the balance of power has shifted, once and for
all, away from sellers and toward well informed, mobile,
socially-connected consumers. Just look at the results of
the recent holiday shopping season to get a sense of how
quickly things are changing.

Retail sales rose 2.7 percent in November and December, to

$265.9 billion, but actual store visits declined 14.6
percent,according to Associated Press. The data suggests that
consumers are researching items online before going into stores
to buy. One consumer described his approach as precision
shopping.
On the weekend before Christmas, many retailers dropped the
prices of their online merchandise below those of their already
slashed Black Friday prices, creating a sharp spike in
demand,the Wall Street Journal reported. Online orders jumped
63% on December 23, compared to a year earlier, creating a log
jam in overnight deliveries.
Up to 20 percent of holiday season sales occurred on mobile
devices, eMarketer estimated. The number was even higher
close to 25 percenton Thanksgiving and Black Friday.

Online sales grew 10 percent in November and December, to

$46.5 billion, as per comScore. But that was actually lower than
expected.

Whats going on here? For one thing, the once sharp line
between in-store retail and e-commerce is blurring as onthe-go, tech-savvy shoppers research, browse, try on, and
transact wherever and whenever they please.
That, in turn, is causing retailers to become much more
sophisticated in how they predict demand, manage and
move inventory, and integrate their physical, virtual, and
mobile selling channels.
The rules are being rewritten, says Mike Webster,
senior vice president and general manager of Oracle
Retail. At the core, its all about how do retailers provide
their customers with a seamless experience regardless of
channel?
Thats an excellent questionin fact, its an urgent
question for retail execs today. Heres my list of 10 tech
trends that provide the answer.
1.

Multichannel retail requires channel-synthesizing

technology. At Oracle, we call this commerce anywhere, and
the newly released Oracle Retail version 14 is loaded with
functionally that enables it. Oracle Retail v14 supports processes
that help customers buy, pick-up, or return items via any retail
channel and help retailers meet demand without constraints
across those channels.
2.
Analytics bring science to the art of retail. For years,
retailers have managed some of the biggest data warehouses in
the world. So they already have big data; now they must use
those many terabytes to optimize operations, refine pricing,
anticipate demand, and provide the product assortments
customers want.
3.
Mobility is much more than a smartphone
app.Retailers can create a more seamless experience for
customers, and increase the productivity and effectiveness of

4.

5.

6.

7.

employees, by incorporating mobile technologies beyond

smartphone shopping. For example, store employees can be
equipped with tablets that have point-of-sale capabilities. And
Tesco, one of the worlds leading retailers, even introduced its
own 7-inch tablet computer, the Hudl, which can be used for instore shopping.
Visibility adds value to inventory. Its one thing to know
that you have a pallet of product XYZ in a warehouse
somewhere; its much better to be able to tell your customer that
XYZ is on its way and scheduled to arrive at a nearby store at 8
a.m. tomorrow. Retailers need comprehensive inventory
planning, replenishment, and warehouse management
capabilities, and they must be able to share the valuable
information within those apps with customers.
Customer relationship management never gets
easier. CRM is a two-way street, but for retailers, its a steady,
and sometimes steep, uphill climb. Even if a customer is
delighted when they leave your store (real or virtual), you have
simply raised the bar of expectation higher for their next visit.
This is why many CIOs and Chief Marketing Officers have begun
thinking in terms of the customer experience, or CX, which
includes a whole range of technologies and cloud solutions
including marketing and loyalty appsthat work in concert with
a well crafted CRM strategy.
Integration is everything. Multichannel retail must be
seamlessfor both retailers and customersand that requires a
level of systems and data integration that goes well beyond what
most companies have in place. There are various reasons for
that: Online operations were originally established as a separate
sales channel in many places; retailers have accumulated a mishmash of special-purpose technologies for the Web, merchandise
and supply chain management, and so on; and mobile devices
and social media create entirely new data streams. The good
news is that not all data integration needs to happen in real time,
which can be needlessly inefficient and expensive. The trick is to
know where real time is essential and where its not.
Your customers can (and should) be
anywhere. Globalization represents a huge growth opportunity
for retailers, but its complicated, nuanced, and idiosyncratic, as
different regions of the world have their own languages and
currencies, fiscal and tax policies, and logistics challenges. In
parts of China, for example, retailers still rely on bicycle couriers

for deliveries. For more, see my article Building Trust And

Other Next Steps In Global E-Commerce.
8.
The transaction hinges on having the right product at
the right time and place and at the best possible
price. Theres nothing new about this value proposition, but
theres a lot new about how its done. Assortment planning,
targeted assortments, life-cycle management of individual items,
price optimization, markdowns, and inventory alignment are just
some of the ways that retails can improve performance. If your
stores are using anything other than the latest capabilities in
these areas, the odds of selling that name brand $120 handbag at
a 30 percent discount to the customer in the accessories aisle
arent nearly as good.
9.
Develop a strategy for showrooming. The popular
practice of showroomingwhere consumers go into a store to
browse, then make lower-priced purchases onlineis a cause of
angst for the brick-and-mortar guys. But physical store retailers
can fight back with real-time price matching and by equipping
in-store employees with mobile technologies and information
that puts them on an even keel with smartphone-carrying
shoppers. This way, the employee can intervene, says David
Dorf, senior director of technology strategy for Oracle Retail.
The net effect will be much less showrooming.
10. Go social, because you already are. In-store shopping is
a highly social activityits face to face and we run into friends
and neighbors while out and about. So it only makes sense that
retailers would leverage social media to take full advantage of the
customer engagement they already enjoy. Retailers must plug
into the social buzz, listen to customers, capitalize on what they
learn, and use social tools and marketing best practices to build
even better and more seamless customer relationships.
11. This recent online article provided an interesting quotation. Canadians are not all that
engaged in getting mobile apps from retailers according to Indigos VP of Marketing and
Customer Intelligence. Do Canadians avoid downloading apps or using mobile options to
shop because we dont see value? Not everyone would agree with that opinion, and if apps
provide value that aligns with their brand, retailers most dedicated brand followers are likely
to be among their users.

12. There is no magic formula to mobile apps. Retail is all about choice. Every shopper is
different and has their own unique journey. Every retailer provides different services and
experiences. I have a number of Canadian retailer apps on my mobile device, and the ones
that stay on have different traits that I find engaging:

13. Transaction Capability

14. I have purchased movie tickets using the Cineplex app for years now. It works well and
interfaces to Passbook to simplify scanning for ticket pickup. One opportunity to make the
app even better is to simplify payment. Mobile doesnt lend itself well to entering credit card
numbers. While I understand the challenges of storing credit card numbers, online retailers
already do it, and I would be willing to store mine as it would easily cut the transaction time in
half.

15. From my perspective, using the app allows me to buy my tickets on the way to the theater
while someone else drives and skip the purchasing line at POS or kiosk at the theater. It may
not be a value to all users, but skipping lines is a popular past time for most people. Retailer
Bonus: lines are shorter for those that choose to buy tickets onsite!

16. Pre-Ordering
17.

While I remain uncertain about the value of pre-ordering in an

environment like Starbucks that is often high traffic with a lot of queuing, the pizza ordering
process has a process to it that lends itself well to mobile ordering. There are a number of
options available in Canada, but the one that works for me isnt an app at all. Panago pizza
has a mobile enabled website. Their ordering options are very simple, and best of all, my
most recent orders are front and centre when I login. Many apps are focused on jazzy
animations of pizzas with the toppings on them.

18. Animations are fun for first use, but not when I want to just order the same order I had last
time for pickup on the way home from the airport after a long day. No need to pay on the
app. I pay when I get there, so no need to enter card numbers. If they ever put this simple
interface on an app and stored my login it would certainly have a place on my mobile. For
now its one of few bookmarks on my mobile desktop and they even remembered to
provide the icon on the site so its easy to see on the mobile.

19. Simple User Identification

20.

One of the main challenges with websites over mobile apps is having
to enter passwords. Using password managers like SplashID and1Password simplifies this,
but the majority of the people I speak with glaze over when I mention these tools, and most
users forget their endless passwords, adding unwanted multiple steps to a mobile
transaction that will dissuade them from using the app. Google and Apple are doing their part
to enable browsers to automagically remember all of these passwords, but if credit cards are
stored, security starts to suffer.

21. iTunes makes buying music and video simple by approving purchases with the fingerprint
reader on the home button. Lululemons shopping app also identifies users by their
fingerprint. This is a seemingly overlooked way to login to apps and bring up all of my info
shipping addresses, shopping cart, credit cards and more to apply to a transaction while
providing some security. Retailers are constantly looking to remove friction from the
purchasing process and both of these apps do that very well.

22. Fun and Rewards

23. Going to see a movie in a theater is a shared experience. I find that the Timeplay app for use
at Cineplex theaters enhances that shared experience while providing rewards that are
valuable to me scene points towards free movies. The app allows everyone in the theater
to compete in a movie trivia game where the mobile devices are used to submit answers to
trivia games on the screen like bar games of old. The top winners get Scene points and
snack bar prizes. My children like to compete with me, we all have fun, and I eventually get a
free movie entry.

24. An opportunity to improve the biggest issue with the app was recently addressed by enabling
the users scene number to be stored in the app and prizes more easily applied. Once again,
data entry of long numbers is not ideal. Removing those barriers makes everyones
experience better, and will increase app usage.

25. Memory Extension

26.

Retailers that have extensive inventories of products that lend

themselves to repeat purchases provide utility with a favourites tracking capability. LCBO
carries a lot of different kinds of wine, and everyone has gone there with instructions to pick
up a bottle of wine that a loved one liked that they thought was from Australia and had a blue
label; no red.or was it yellow. What year was it?

27. The LCBO app allows shoppers to scan barcodes on bottles and add them to a favourites
list. For the next visit to the store, its easy to find that bottle that is impossible to remember
without some help. Its much easier to show your mobile screen to a store associate than
describe its physical attributes. As an added bonus, the app will provide details on inventory
as of 24 hours at your closest store or at any store in the chain too ensure you make the
most of your trip.

28. This is a great example of truly connecting the mobile and store experience its simple, it
suits the needs of shoppers in this environment and provides value.

29. The Indigo app mentioned in the original article that prompted this post is on my mobile as
well. It has the ability to hold favourites lists as well, and you can name them, so I keep
ongoing lists of books my family mentions to remember as gifts. The app also leverages
Passbook for loyalty card use.

30. Payments
31. For small transactions with regular customers, enabling payment via a barcode and stored
value card is the best way to enable payment without using the pinpad at point of
sale. Starbucks has done this well for years, and I have personally trained numerous Tim
Horton associates over the past few months on how to accept the Tim Card on my
mobile with their imager at POS and drive thru. Wendys Canada are new to the game, and
their solution works in much the same way though with unique constantly changing six digit
codes instead of a barcode.

32. While this payment capability is very useful, I still see shoppers re-loading their stored value
card at the POS. That is a value of both of these stored value apps the cards can be
reloaded on the app. No need to hold up the line or enter a PIN at the POS. I think most
people arent comfortable setting it up, and there is some need for culture shift there. Both of
these apps do well at this, though once again, in my opinion, passwords and initial setup
reduce the full contingent of potential users who are scared off by the effort. My initial setup
for the Tims app took three attempts to match 2 passwords with capitals, symbols, etc.

33. Passbook Enablement

34. As someone who aspires to minimize my wallet, I use Passbook every day. Ive seen very
few others using it when I am at a POS, and it should be more widely used. Apps like Air
Miles, Tims, Starbucks, and Cineplex all enable loyalty or payment cards to be stored in
Passbook.

35. Passbook negates the need to carry another piece of plastic. There is no need to look
through your phone to find and open the specific app for the card you want. I always have
my mobile with me to show my card. While not every retailer can scan the card as they are
not in the right cycle for replacement of their scanners, they can still give their number for
entry kudos to Rexall staff for always doing this when I show my card.

36. There is not an ideal mobile wallet yet, but changes like this are cultural, take time and are
achieved by taking small steps I start with loyalty cards and coffee payment. Drivers
license and other ID could be next. Im doing my part to encourage shoppers and retail
associates to become comfortable with these options by using them and talking about them
with others. Passbook is far from perfect, but its the best option to date.

37. There are lots of value in mobile apps already available and there is lots of opportunity for
more. Consider just a few other opportunities Ive not seen realized in Canada as of yet:

38. Mobile Apps for Gas Pumps Its been very cold in most of Canada this winter. Why not
control the fuel pump from inside the relative warmth of our cars? The technology exists to
do this and even order food from outside the store. You could even scan codes from
windshield washer fluid, ice or firewood in the summer and pay without having to enter the
store. Oh, and its time to get rid of those stickers that say not to use your mobile at the
pump. The gas station operators are lessconcerned than in the past. The myth of danger is
busted. That said, we should always pay attention to what we are doing when we fuel.

39. Coupons Im not sure why we cant open our mobile and select coupons to apply to our
loyalty card for usage when we buy those items in Canada. The technology exists and is
available and in extensive use in the US.

40. Enable the app as Information Hub All retailers are enabling buy online and ship to store.
Why not build this information into my account page so I can look it up? A red notification
icon on the app here would be more likely to catch my attention than an email. Receipts
should go here too. I hate wasting paper. Let me tell you that on the app, and dont make
me take a paper receipt automatically. All account details should be available to me here

and online and on my tablet. Dominos does a great job of showing the status of your
order and lets you track your order through the process. It would be fantastic to do this with
orders for bigger items.

41. I think that there is a great deal of opportunity to improve on the mobile interactions retailers
can provide, but as indicated, there are already lots of great options. Its impossible to walk
around in public without seeing people staring at a mobile device. There is no reason that
they wont adopt retailer apps, but they have to be educated, and it has to be more than
signage.

42. For all of the signage Ive seen at stores, Ive never seen any evangelists in stores to help
people understand all of the value that shoppers can get from the apps. Ive never seen
cashiers or associates answering customers problems show them how its very easy to get
what they need from the mobile app. While the benefits of apps discussed above arent of
value to everyone, there is definitely a population of people that are completely unaware of
the benefits. In a strange twist, the best vehicle to convince everyone to leverage this
technology completely may be human interaction. In the interim, Im happy to use these
tools and continue to share with others who are interested.
For many years, retailers have heard about the benefits of RFID, and there has been little to no use
of item level RFID to check out in a store. On the weekend, I visited my local library with my family
and had an opportunity to utilize the newly installed self-checkouts to check out our books.
Under the old system, all items had a unique barcode and an EAS security tag. To check out an
item, customers presented their books and library card to an attendant at a PC with a scanner. The
attendant scanned the library card to validate the customers identification, checked if there were any
fines, holds etc, and then scanned all of the items to be checked out. A receipt was printed and the
items were walked around a security gate at the combined entrance/exit, and handed to the library
customer. The security tags set off an alarm when they are near the gates, so the attendant passed
them to the holder on the other side of the security gate.
Under the new system, there is no need for customers to interact with an attendant unless they have
a fine, a hold, or some other intervention that goes beyond the simple checking out of an item. The
customer uses one of a few self-checkout terminals which include PC and a scanner, but also a
customer facing touchscreen, and an antenna in a pad on the counter. The customer scans their
library card, and if they have no fines or holds, they can then identify the items to check out. To
identify the items for borrowing, the customer places the items on the pad on the counter, with as
many as three at a time piled on top of each other in a stack. The antenna reads the tags in the
books and shows them on the screen for verification. The customer can validate that the items
match, ensure any media inside the item matches the case, and complete the checkout with or
without a receipt.
As the items are now considered checked out, the customer can walk past a gate with an RFID
reader, and if the item they are carrying is checked out, no alarm will sound. If an item has not been
checked out and allocated to the customers card, an alarm will sound.

On the whole, the system worked very smoothly. While only recently installed, customers took to it
and had little issue using it. The library staff were helpful and encouraging for the few customers
who did require assistance.
The RFID system was a good fit in the library for a number of reasons:

Even if RFID tags are more expensive than barcode labels and EAS tags, items are tagged
once and then run through the system many times as they are loaned through their useful life,

instead of being purchased once.

Most items in a library are flat and lend themselves to easy scanning on a pad like this.

There are rarely very heavy, bulky or oddly shaped items to be checked out.
Consumers are accustomed to self service from using it at ATMs, airports and retail self-

checkouts so they recognize the paradigm of self service took to it well.

All customers are identified with an identity card. No exceptions.

One attendant can now support many customers at a time instead of one, reducing wait
times, and ideally enhancing the customer experience. If customers dont wish to check out

their own items, they can assist them easily.

Allowing customers to walk out the door with their own items without passing them around a
security gate appears to provide better flow and a smoother checkout experience. It also
removes an underlying assumption of distrust implied by the gates and security system as
previously configured.

The whole system reminded me of a question I had from a retailer at NRF who asked to see our
RFID self-checkouts. While I would personally like to see RFID checkouts in retail purely from a love
of technology, it seems unlikely at present. There are some differences between this library scenario
and many retail environments from a checkout perspective:

It will be difficult to convince all the parties involved in manufacturing goods to move to item
level RFID tags unless the retailer and consumer are willing to absorb the price. The prices
are getting lower and lower for the sort of passive tags needed for items purchased at retail.

Time will tell if it will be enough! The big retailers will have to drive this adoption.
Implementing readers to read these tags instead of barcodes would require a replacement or
at least an upgrade to current reader infrastructure. An ROI is needed to change/add that

infrastructure to include RFID readers.

While libraries have basic flat items, other retail environments have all sorts of uniquely sized
and shaped items that may not lend themselves well to a standardized rfid reader environment.
For unusual items, a handheld RFID reader could be used, but if it was, whats the difference
between holding that RFID reader to a tag and scanning a barcode as is done today? Not

much.
Would there be a throughput advantage? For smaller transactions, it is very unlikely.
Cashiers and even customers scanning themselves can scan a few items relatively quickly.
For smaller transactions, tendering is generally the longest part of the transaction and not the
scanning. For larger transactions, there may be some throughput advantage, but it would take

time for retailers and consumers to develop the trust that the system would capture all of the
items accurately. Also, many customers like to validate their purchases and their prices as they
are scanned. Much of the throughput advantage of an instantaneous cart total could be lost by

questions and validation afterward.

Weighable items would need to be either pre-packaged or separated for checkout.

Weighables couldnt just be left in the cart for reading.

Unlike a library, the items that a consumer buys cant be checked out as they are not
unique in the store. An antenna at the front of the store placed for security cant identify items
as valid to pass or not. Its unclear how security would work with RFID tags. Ive heard of more
sophisticated and more costly RFID tags that can be de-activated on scan, but then what if a
client changes their mind after the transaction or returns an item? Does it need to be retagged?
How does one print a new tag for an item? If RFID cant be used for security, then EAS

would be needed as well.

What about bulk items that are tagged with paper tags today? What about low value and
small items like greeting cards?

As with all solutions in a retail environment, there must be a benefit for both the consumer and the
retailer for a solution to be implemented successfully. Its possible that the RFID self-checkout could
get to that point if retailers can leverage the operational benefits on the back end first and push it to
the front end. Then it will take customers and retailers getting comfortable with wheeling a big
basket of groceries up to a reader and taking that price as correct.

Tesco Revolutionizes
Retail And Gears Up For
'Battleground Of The
Future'
John Foley , Oracle

Comment Now
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Tesco, one of the worlds leading retailers, is blending instore technologies and new digital services to create aretail shopping experience that is unlike anything
consumers have known.

Having already invested in demand forecasting and

supply chain capabilities, Tesco is developing innovative
ways to ensure that new items in its stores are what
customers want and conveniently available to them.
The pace of change in retail driven by technology is
absolutely breathtaking, says Mike McNamara, Tescos
chief information officer.
In its latest bold step into the new world of highly
integrated, multichannel retail sales, Tesco has just
introduced a colorful, 7-inch tablet computer that can be
used for online shopping and to view movies and other
Tesco-branded digital content. The device, called the
Hudl, lets customers shop whenever, however, and
wherever they want.
Tesco is on the vanguard of a trend in which customers
do their shopping in stores, online, or on the go
whatever suits them. We have to stop thinking about
customers in silos and start thinking about one customer
enjoying multiple experiences, says Matt Atkinson,
Tescos chief marketing officer.

Atkinson made that observation at a keynote

presentation on the modern customer experience
at Oracle ORCL +0.14% OpenWorld 2013 in San Francisco,
where he and CIO McNamara provided an overview of
Tescos vision for the future of retail. Tesco is using a
variety of Oracle applications, including Oracle Retail,
Oracle Commerce, and Oracle ATG Web Commerce, to
execute its multichannel, blended retail strategy.
The new game in town isnt just technology to lower
costsits technology to improve sales and customer
loyalty, said McNamara in a phone interview with me a
few days before Oracle OpenWorld.
Thats true in many industries, which explains why CIOs
and CMOs are working more closely than ever.
McNamara now spends much of his time in close
consultation with Atkinson in a search for new ways to
engage and support Tescos customers.

Tesco's new Hudle tablet (Source: Tesco)

If you want to win in this new world, youve got to be

riding that digital wave because if you let it crash over
you, it will wipe you out, McNamara told Oracle
OpenWorld attendees. Over the past two years, Tescos
CIO has shifted his priorities from operations to the

customer, from efficiency to customer loyalty, and from

cost control to increasing sales.
Atkinson identified three broad forces that are
influencing Tescos IT investments: cloud computing,
personalization, and the seamless, blended world of
physical and digital.
Having a robust online presence is vital to a multichannel
retail strategy. Tesco now offers online grocery service in
more than 50 cities across nine markets outside the UK,
and the company is a global leader in online grocery
sales, having reached over 3bn in group online sales for
the first time last year.
Tescos next step goes well beyond e-commerce. The
question is, How do you bring the internet into the
stores? says McNamara.
The retailer offers several ways to do that: mobile apps,
in-store kiosks, and the new Hudl tablet. And its further
blurring the line between physical and virtual retail with
services like blinkbox, which lets customers buy a movie
in a Tesco store, then, at the time of purchase, a digital
version of the movie immediately becomes available in
the customers online account.
Tesco sees great potential in a service called Click &
Collect, which lets customers buy groceries online or via
mobile devices, then pick them up at a store, parking lot,
or other convenient location. With Click & Collect, Tesco
is now fulfilling the shopping lists of a half-million
customers each week. Its enormously popular, says
McNamara.

At Oracle OpenWorld, McNamara and Atkinson

presented their vision of retail 2020, where the
customer experience will be transformed through a
combination of new technologies, personalization, and
physical/virtual blended offerings. The battleground of
the future is he who serves the customer best in this
seamless and connected world, says McNamara.
Whats Ahead
Tesco is developing a range of exciting new technologies
and tech-enabled services: Tesco colleagues are equipped
with badge computers that fit in the palm of the hand.
Ceiling camerasa.k.a. broccoli camskeep an eye on
the fresh produce section for timely resupply. Electronic
shelf labels could replace price tags. And Tesco is
experimenting with an augmented reality capability
that lets customers view products in 3D on smartphones.
My favorite Tesco innovation is a virtual store built in a
subway in South Korea where commuters can use mobile
phones to order goods from a wall of products. Theyre
virtual products, not realan example of what CMO
Atkinson calls an immersive digital experience.

Tesco's virtual store (Source: Tesco)

To see this retail revolution as a winner-takes-all prize

fight between physical stores and online shopping is to
see it wrong, says McNamara. Our stores sit at the
heart of our multichannel strategy. The point about
physical stores is not to relegate its importance to
customers, but to use technology to build on what it
already offers in their lives.