Retail Technology for 2015

By David Dorf on Dec 14, 2014

I'm avoiding the word "prediction" because that involves a little more precision than I'm capable of delivering.  Instead I've listed the five big trends I think will dominate the retail technology landscape in 2015.

1. Payments Race

Before mentioning all the emerging payment vehicles, we need a little context from the past.  The original credit card was an air travel card issued by American Airlines in 1934.  It wasn't until the 1950s that Diners Club and American Express came on the scene, and the predecessors to Visa and MasterCard gained traction in the 1960s.  I don't think it was until the 1970s that credit cards became commonplace, so that's a 30 year evolution.

Granted, we're in the era of internet time where everything moves faster, but let's set expectations.  ApplePay, GooglePay, PayPal, MCX, Softcard, etc. are the start, not the end of the next generation of payments.  I expect continued refinement for several years before we find "the winner."  And don't for a minute think the best technology will win.  The best solution wins, and that includes compromises between consumers, banks, and merchants.

2. Home Automation

The Nest thermostat was just the start, and Rosie is somewhere towards the end. We're going to see a plethora of connected devices for the home, ones that retailers will sell and ones that will help retailers sell.  Amazon's Echo and Dash are great examples of removing shopping friction when replenishing the cupboards.  Soon our homes will know what they need and parts of our shopping list will be automated.

To this end, ARTS is looking for ways to standardize the interface to retail websites for automatic ordering. In the not to distant future, you'll configure your home to reorder items from your favorite retailer, or possibly use a comparison engine to find the best deal.  Just think, perhaps someday retailers will create advertising campaigns that target refrigerators.

3. Fast Delivery

At one end of the spectrum you have the prospect of delivery by drones, and at the other end you have 3D printers waiting to create on-demand.  The short-term answer to delivering products faster is probably in the middle, borrowing from the likes of Kiva and Uber.  The first half of the solution lies with efficient fulfillment. Sometimes that means pick and ship from stores, sometimes it means centrally located dark stores, and often it means automating the warehouse.  But accurately promising, picking, and packing solves only the first half of the journey.

If we associate the post office with public transportation, then FedEx and UPS are like taxis.  Both will get you where you're going, but at vastly different prices and service levels.  Uber represents a new way of thinking that combines the speed of taxis with the cost of buses.  If its easy to request a ride, then why not apply the principals to delivery?  There are lots of ongoing experiments in this regard, and we'll start progress in big cities.  This is the accelerant to pushing grocers online.

4. In-store Personalized Experience

Personalized experience at scale is the goal.  The "at scale" part tends to exclude expensive staff, so technology is expected to step in with intelligent automation. Technologies like geo-fencing, marketing automation, BLE beacons, data as a service, and video analytics all have a place in the solution.  Retailers will continue to experiment with ways to interact with consumers in a helpful way, being the butler instead of the stalker.  Payment, loyalty programs, and marketing will converge on the smartphone, and bring many Web innovations to in-store shopping.

5. Data Theft

Organized crime has gone from spam, to malware, to outright data theft. Until the credit card industry fixes the inherent and obvious flaws in their payment ecosystems, hackers will continue to attack retailers.  EMV is a step in the right direction, but its only a partial solution.  Tokenization and end-to-end encryption are necessary and will finally be implemented in several industries.  Data theft will get worse before it gets better, but no one is going back to cash.