By Retail News Insider
From personalized coupons to self-checkout to mobile wallets, there’s no denying that technology is changing the way consumers shop. But to date, the adoption and buildup of technology amongst grocery, general merchandise and other traditionally “lower-tech” sectors has been somewhat slow. And in many cases, the use of services offered by such retailers has been limited to the more progressive consumer base who actively seeks out such offerings. According to Interactions’ Senior Vice President of Global IT Abhi Beniwal, however, that’s all about to change.
Retail News Insider recently sat down with Beniwal to get his insights on the changes the retail industry can expect to see in the coming years. He reveals how he believes technology will soon revolutionize the in-store experience—and fundamentally change the way we shop.
Retail News Insider: What do you see as some of the biggest challenges facing the retail sector as it relates to technology?
Abhi Beniwal: Retail is going through one of the biggest changes in history of the industry. While our basic needs as consumers have not changed, technology and the way we interact with it has. That is what is driving this change in retail.
To meet the demands of consumers, retailers are going to have to evolve and adopt new technology at a much faster pace than they have in the past. They are also going to have to work on efficiency and cost savings so they can compete in what is becoming an increasingly intense marketplace. The trends that are going to be key drivers of technology for retailers include:
- Behind the Scenes Optimization—By utilizing Software as a Service (SaaS) or centrally hosting software and data on the cloud, retailers can deliver new services to consumers and optimize store operations and supply chain. Though SaaS is in use to some degree already, it’s going to grow at a faster rate than ever before.
- Innovate. Implement. Repeat.—Rapid and sustainable innovation in technology will come from retailers and vendors, big and small. Technology innovation will also come from crowdsourcing through the consumers, allowing consumers to dictate, and in some cases even help implement, the services they want.
- Appearance Matters—Stores of the future will be smaller and more about delivering an experience than housing product. Industry titans such as Apple and AT&T are already making this a reality. AT&T’s flagship store in Chicago is a case in point. AT&T uses state-of-the-art technology, such as sound effects, motion sensor displays and mobile POS systems, to create a unique experience for their customers. As part of this, retailers will also have to adopt new technologies that transform operations from the traditional supply chain model to sourcing directly from suppliers to deliver to consumers wherever they are.
- Shift in Control—Mainstream adoption of technologies that provide a better shopping experience will include things like machine learning, m-commerce (being able buy items directly from your mobile device) and augmented reality. The whole idea is that technology will cater to the customer based on who they are and where they are. What’s driving this in particular is that the power in the marketplace is shifting from the retailers to the shoppers. To remain competitive, retailers will have to learn to cater to that control.
Virtual mirrors take the in-store experience to a new dimension, enabling customers to try on clothes without going into a dressing room.
RNI: How quickly do you see those technologies being widely adopted by retailers?
AB: It will depend on the retailer and their sophistication with technology. In general terms, I expect Software as a Service and m-commerce to continue to gain momentum and eventually become the norm in retail. In addition, we will see a change in the definition of m-commerce as it becomes anywhere commerce through mobile. Currently m-commerce is still primarily online shopping via mobile, while most of in-store shopping or purchasing is done through physical transactions. In the future, we will see these lines blur as both in-store and online shopping transactions are completed through mobile devices.
Augmented reality, on the other hand, will see slower adoption. It will likely be limited to marketing efforts and selected consumer engagement with new products.
RNI: How do you think new technologies will affect in-store events in particular?
AB: Augmented reality will enable in-store events to be more engaging through technology and mobile devices. For example, consumers will be able to participate in demonstrations and learn more about the products using their phones. Augmented reality could also be used to expand the range of in-store events beyond what’s typically seen today. For example, virtual mirrors could make it possible for shoppers to “try on” clothing right there in the middle of the store and figure out the perfect size for them, without having to step a foot in the dressing room.
At the same time, we will see m-commerce playing a role in mobile shopping inside the stores. For example, shoppers might visit an in-store demonstration and sample a product, then order it on their phone and have it shipped directly to them. This will allow retailers to test products and sales before deciding to carry them in-store or order through the warehouse supply chain systems. It will also allow retailers to launch new online products inside the stores and continue to create an “endless aisle.”
One thing that’s important to note is that these technologies aren’t going to replace the human element of in-store events. Human interactions are still part of basic nature and a primary driver for people to walk inside the store. Instead, these technologies will enhance the work that in-store marketers do.
RNI: Are there any barriers to implementing these technologies?
AB: There are two main issues. First is the ability to get services to market. As of right now, many in the retail industry are dealing with older IT infrastructure and legacy platforms, which makes implementing these new technologies a long, painstaking process. That’s why many of them are slower to adopt some of the more cutting-edge ideas out there. Eventually, retail will adapt to build systems from the ground up, which will be the faster, more efficient way to get these new technologies out into the mainstream.
Second, and perhaps even more significant, is the balance between personalization, convenience and consumer privacy. Right now, the industry is more titled toward convenience, often at the cost of privacy. It’s going to take a lot of work and will become worse before it gets better, but going forward, retailers will eventually get to the point where they can offer consumers more privacy without compromising convenience or personalization.
Abhi Beniwal is the Senior Vice President of Global Information Technology for Interactions. He has been with Interactions and Daymon Worldwide since 2001 and has led several technology initiatives for supply chain, master data management, business intelligence, consumer and mobile solutions. In 2011 he was named one of the Top 25 Information Managers by Information Management.