Wednesday Feb 24, 2016

Minding the Gap in Retail

In the demanding world of retail, the CIO faces a delicate balancing act between maintaining smooth operations and innovating to meet consumer demand.

By Jeff Warren, Vice President, Oracle Retail

A few years ago, retailers spent a lot of time talking about the challenge of multichannel operations: how to provide the same merchandise and the same level of customer experience online as in the store. Then the use of smart phones exploded, adding in effect a third channel, mobile. Even as retailers were scrambling to deal with this complication, they realized that the boundary lines between one channel and another were vanishing. Customers walk into the store with a phone in their hand, buy things they see on the sales floor, accessorize them with items from the website, and expect it all to be handled as a single, on-the-spot, totally personalized transaction. The expectation is very clear: give the consumer what she wants and how she wants it, and in as close to real time as possible.

Meeting this expectation is essential. In a market in which any advantage in price point and selection can be countered by a dozen competitors, the key differentiator has become customer service. Retailers are striving not only to meet consumer demand but to anticipate it, and to provide an ever smoother and more personalized shopping experience. To do that successfully, retailers are looking to their CIOs to evaluate, adopt, and integrate new technological capabilities as soon as they become available.

But innovation, of course, is only part of the CIO’s job. IT is a cost center, and retail, for all its glamour, is a brutally competitive, low-margin industry. CIOs have to innovate, but they also have to keep the lights on—if the system’s down, you’re out of business—and they have to stay within the budget. How does a CIO create more capacity?

Changing the rules

One way—perhaps the key way—is by moving to the cloud or to a hybrid model that leverages the cost advantages of the cloud while retaining local IT control of core assets and operations. In a recent Forbes article on top strategic CIO issues, Oracle’s Bob Evans noted that “Before cloud computing, the #1 enemy of the CIO was the economic reality that 80% of his IT budget would be consumed by low-value maintenance and integration. Because cloud computing pushes that burden over to cloud vendors, CIOs can liberate huge portions of their budgets and reallocate them to projects centered on growth and customer engagement.”

Once the IT budget is liberated, it stays liberated. The cloud, whether as a total IT environment or as part of a hybrid system, makes it possible for retail organizations to keep abreast of business and technological developments without having to make unexpected investments in IT infrastructure.

The shift to the cloud also enables the continuance of a deep and ongoing change in the role of the retail CIO. A decade ago, retail IT was essentially seen as a cost center. While the CIO was responsible for enterprise-level IT, market-driven functions like ecommerce frequently reported to someone else. This pattern clearly required a change; retail IT broke out of its silo and began working more closely with functions like marketing. Now, with some routine maintenance and upgrade issues moved off their desks, the industry’s CIOs are shifting to become key innovators who work hand in hand with all the organization’s business stakeholders.

In this transition, retail CIOs may find themselves needing to evaluate the cloud and, as it stabilizes, to advocate for it. While the cost benefits more or less make the case for themselves, it may be necessary to explain, and where possible to demonstrate, the redundancy, functionality, security, and scalability advantages of the cloud to executives not versed in IT issues. Trust and performance must be proven.

The end goal is enablement. Today, organizational survival—especially in an industry like retail—depends on embracing new technologies at an unparalleled pace. More than ever before, CIOs need to create capacity and lead—to reach into the cloud and bridge the gap between operations and innovation.

Friday Feb 27, 2015

Is Mobile Over-hyped?

Don't get me wrong; I think mobile has and will continue to have a huge impact to the retail industry.  It's just that sometimes we get swept up by the shinny new object and neglect the basics.  Less than two years ago Marc Andreessen declared that stores were dead, yet they still typically represents more than 90% of a retailer's revenue.  Investments may not track contributions exactly, and that's understandable.  We just can't let the ratio get too out-of-sync.  Put another way, a meal consists of main dishes and side dishes.  If the chef neglects the side dishes the meal won't be ruined, but the converse is not true.

After the holidays I kept seeing stories about mobile traffic doubling or tripling, so retailers were upping their investments.  But we need to put that in perspective.  Even with huge growth, mobile is still not as big as PC traffic. MarketLive estimates PCs account for 56% of website traffic, and more importantly, 75% of the revenue.  See the chart at the left from e-Marketer, which also shows average order value from PCs is higher too.

I trust actual metrics much more than the surveys that ask questions like, "have you purchased something from your smartphone in the last six months?"  Few haven't, but often they're small, infrequent purchases so it tends to overweight the results.

And there's a big difference between browsing and buying.  As you can see below, shoppers often are doing research on their mobile devices then completing the purchase on their PC.  The PC has a definite advantage when it comes to conversion.  From my own experience, I rarely buy on my mobile phone but split purchases between my tablet and PC.  After all, today's tablet is basically as powerful as our PCs.

Infographic: Smartphone Shoppers Rarely Close the Deal | Statista
You will find more statistics at Statista

So back to the original question, is mobile over-hyped?  No, its hugely important to the retail business, and customers have come to expect top-notch experiences on their mobile devices.  But don't get distracted to the extent that the basics get underfunded.  The "main dishes" of retail are what continue to bring in the majority of sales.

Monday Mar 03, 2014

Two Really Cool Approaches to Payment

As if the oodles of emerging payment schemes weren't enough, two more approaches have arrived on scene.  Aside from enabling your phone to make payments, they are very unique and well worth some consideration.  The first solution is called LoopPay, and its creators claim it works on 90% of existing payment terminals without any new hardware.  Install the wallet on your phone and plug-in either the fob or charge case, then tap on any existing payment terminal to pay using your credit or debit card.  Now think about that.  How's it done?

No, they're not using NFC or bluetooth to communicate with the terminal.  That would involve additional or updated hardware, and I said this works with existing terminals.  Are they using sound like ShopKick?  Nope.  QRcodes?  Good guess, but no.  Think about it from the terminal's perspective.  The only way to enter card data is the keyboard or the magstripe.  Wait for it.  Yes, the phone via the fob emits a magnetic field that contains the track data.  Its pushing the track data into the magstripe head of the terminal.  From the terminal's perspective, we have a traditional, card-present transaction.

Here's the rub: like I said, it only works on 90% of the terminals, and in real-world tests maybe even less.  Its a tough sell for banks and retailers to say "works most of the time" to their customers.  Obviously there are security concerns as well, but I'm assuming they are able to vary the track data just as EMV would, so its at least as secure...maybe.  But then again, I'm still not convinced that tapping my phone is any more efficient than swiping inserting my card.

The second approach is a bit more traditional.  If you'll recall, Google Wallet only worked on certain phones when it was first released.  iPhones were out because they don't support NFC, and only select carriers were supported with Android.  That's because the wallet made use of the secure element, a place were crypto algorithms are run and data can be secured.  The secure element can be built into the phone, but most of the time its in the SIM chip that's owned by the telcos.  And as Google found out, if the telcos don't allow access to the secure element, you can't do NFC payment.

That's where SimplyTapp enters the scene.  They're advancing Host Card Emulation (HCE), a method by which you can do NFC payments using a secure element that resides in the cloud instead of the phone.  Android has included HCE in their latest version, KitKat, so now all NFC-capable phones are ready for NFC payments.  The big news here is that banks are now free to create payment schemes without getting approval from the telcos.  Both MasterCard and Visa recently endorsed HCE so I'd expect existing banking applications to begin adding the ability to pay soon.

So where does that leave us?  The telcos continue to want a piece of mobile payments via Isis; Google gets access to more handsets; banks are well positioned to support their own mobile payments; MCX continues to focus on reducing merchant fees; and Apple is the wildcard.

Thursday Sep 19, 2013

Aligning Strategy to the Future

People like to ask me what retail will look like in five or ten years.  I can paint a futuristic picture involving lots of tech toys, but the reality is that I, like most people, am horrible at making accurate predictions that far into the future.  There are just too many variables, and the biggest one is the consumer.  Its really hard to predict the success of an idea AND get the timing right.  I recall testing tablets at a retailer ten years ago, but they've only recently taken off.  People are saying tablets will replace registers, and maybe they will, but I never could have predicted that ten years ago.

So perhaps instead of asking what will be different ten years from now, maybe we should ask what won't change?  That's one approach Jeff Bezos takes when deciding where to focus energies.  You can bet consumers will still want low prices, vast assortments, and fast delivery so those are constants in the Amazon strategy.  So what are some other things that won't change?

The internet isn't going away, that's for sure.  If anything, bandwidth will increase and open up even more features.  How can your business benefit from a 10x improvement in bandwidth?  Would all the products on your website be animated, perhaps with 3-D perspective?  Would you offer live video help online and from store kiosks?

Mobile will still be important as well, but it might take some additional new forms like wearable devices.  Its always going to be important to serve customers wherever and whenever they want to shop.  We need to stay flexible and support various form-factors for communicating with consumers on the move.  That might include watches, holograms, and displays projected on the nearest piece of glass (Total Recall 2012).

You can bet the marketing department will still be around, and they might just wield even more power. Assuming we're able to increase the amount of data we collect about our customers, how will we use that data to improve the shopping experience?  Can we provide real-time, personalized pricing?  What new types of security can we employ to protect that data?  How do we better include the customer's voice in our business processes?

My best advice for retailers: First and foremost focus on how technology can improve the things that aren't going to change.  Adopt technologies that help keep prices low, improve the customer experience, and make better merchandising decisions, for example.  These will vary depending on your business model, but the point is to not waste energy aiming for something that may never take hold.  Even the best ideas have fits and starts, so don't even try to align your strategy to predictions of the future.  But always track innovation and be ready to adopt when the timing is right.  Awareness and agility are key.

Wednesday Aug 28, 2013

A Digital - Analog Merge

I recently downloaded an iPhone app called Pounce that furthers the concept of Commerce Anywhere.  Since weekly circulars are still an important part of reaching consumers, they continue to be a cornerstone in many retailers' marketing plans.  So Pounce augments the newspaper experience by allow users to point their mobile phone's camera at an item in the circular and have it added to a basket.  The basket can then be passed to the retailer's e-commerce site for normal checkout.  If you've per-registered your payment information with Pounce, you can checkout immediately on the mobile phone.

According to Business Insider, only Staples, Ace Hardware, Toys "R" Us, Babies "R" Us and Target are currently supported.  After downloading the app, I went to the Staples site and tried scanning a random item.  The app didn't recognize any items I selected from the website, but that's not what its suppose to do (I was trying to cheat).  So I clicked over to the print ads where my local newspaper inserts are available online.  The app was great at quickly recognizing those items, taking just a second or two.  In fact, as I moved my phone across the page it was grabbing multiple items and putting them all in my cart.  Obviously the app is "trained" to recognize only the items in the circular, which makes perfect sense.

This is another great example of merging the analog and digital worlds, letting each do what it does best.

Thursday May 30, 2013

Target's Cartwheel

Target is taking a crack at bridging social with the in-store experience using a new program called Cartwheel.  They are providing a dedicated micro-site where consumers can search for offers, share them via Facebook, and collect them for use in stores.  To apply the coupons, the cartwheel app provides a single code that is scanned at checkout, then all associated offers are applied.  The short video below demonstrates:

I like the consolidation of offers into a single code, which makes using digital coupons pretty simple. I'm wondering how the POS UI handles offers that don't meet the requirements.  If a customer expects 3 coupons to apply, but only one actually does, are they notified immediately or only after reading the receipt on the way to the parking lot?

On the social side, the Cartwheel site facilitates pushing offers out to friends via Facebook, but I wonder if Target will get their existing Facebook fans over to the Cartwheel site.  I suppose its good to lessen the dependence on Facebook and begin to cultivate Target's own social network.  This could be the start of that effort.

What do you think of Cartwheel?

Monday Dec 17, 2012

Big Data Appliance

Today Oracle announced the next release of it's Big Data Appliance, an engineered system composed of hardware and software targeting the efficient processing of big data.  The solution leverages 288 Intel cores running Cloudera's distribution of Apache Hadoop in 1.1 TB of main memory.  This monster helps companies acquire, organize, and analyze large volumes of structured and un-structured data. Additionally a new versions of the Oracle Big Data Connectors and Oracle NoSQL Database were released.

Why is this important to retailers?  As the infographic below conveys, mobile and social have added even more data to the already huge collections of POS transactions and e-commerce weblogs.  Retailers know that mining that data will help them make better decisions that lead to increased sales, better customer service, and ultimately a successful retail business.

The Retailer’s Guide to Big Data


Friday Oct 26, 2012

Analytics in an Omni-Channel World

Retail has been around ever since mankind started bartering.  The earliest transactions were very specific to the individuals buying and selling, then someone had the bright idea to open a store.  Those transactions were a little more generic, but the store owner still knew his customers and what they wanted.  As the chains rolled out, customer intimacy was sacrificed for scale, and retailers began to rely on segments and clusters.  But thanks to the widespread availability of data and the technology to convert said data into information, retailers are getting back to details.

The retail industry is following a maturity model for analytics that is has progressed through five stages, each delivering more value than the previous.

Store Analytics

Brick-and-mortar retailers (and pure-play catalogers as well) that collect anonymous basket-level data are able to get some sense of demand to help with allocation decisions.  Promotions and foot-traffic can be measured to understand marketing effectiveness and perhaps focus groups can help test ideas.  But decisions are influenced by the majority, using faceless customer segments and aggregated industry data points.  Loyalty programs help a little, but in many cases the cost outweighs the benefits.

Web Analytics

The Web made it much easier to collect data on specific, yet still anonymous consumers using cookies to track visits. Clickstreams and product searches are analyzed to understand the purchase journey, gauge demand, and better understand up-selling opportunities.  Personalization begins to allow retailers target market consumers with recommendations.

Cross-Channel Analytics

This phase is a minor one, but where most retailers probably sit today.  They are able to use information from one channel to bolster activities in another. However, there are technical challenges combining data silos so its not an easy task.  But for those retailers that are able to perform analytics on both sources of data, the pay-off is pretty nice.  Revenue per customer begins to go up as customers have a better brand experience.

Mobile & Social Analytics

Big data technologies are enabling a 360-degree view of the customer by incorporating psychographic data from social sites alongside traditional demographic data.  Retailers can track individual preferences, opinions, hobbies, etc. in order to understand a consumer's motivations.  Using mobile devices, consumers can interact with brands anywhere, anytime, accessing deep product information and reviews.  Mobile, combined with a loyalty program, presents an opportunity to put shopping into geographic context, understanding paths to the store, patterns within the store, and be an always-on advertising conduit.

Omni-Channel Analytics

All this data along with the proper technology represents a new paradigm in which the clock is turned back and retail becomes very personal once again.  Rich, individualized data better illuminates demand, allows for highly localized assortments, and helps tailor up-selling.  Interactions with all channels help build an accurate profile of each consumer, and allows retailers to tailor the retail experience to meet the heightened expectations of today's sophisticated shopper.  And of course this culminates in greater customer satisfaction and business profitability.

Wednesday Oct 03, 2012

The State of the Internet -- Retail Edition

Over at Business Insider, there's a great presentation on the State of the Internet done in the Mary Meeker style.  Its 138 slides so I took the liberty of condensing it down to the 15 slides that directly apply to the retail industry.  However, I strongly recommend looking at the entire deck when you have time.  And while you're at it, Business Insider just launched a retail portal that's dedicated to retail industry content.  Please check it out as well.  My take-aways are below after the slide show.

[Source: Business Insider]

Here are a few things I took away from the statistics:

  1. Facebook and Twitter are in their infancy.  While all retailers should have social programs, search is still the driver and therefore should receive the lions share of investment.  Facebook referrals are up 92% year-over-year, but Google still does 80% of the referrals.
  2. E-commerce continues to grow at breakneck speed, but in-store commerce is still king. Stores are not showrooms yet.  And social commerce pure-plays like Gilt and Groupon are tiny but worthy of some attention.
  3. There are more smartphones than PCs on the internet, and the disparity will continue to grow. PC growth will be flat and Tablet use will continue to grow. Mobile accounts for 12% of all internet traffic.
  4. A quarter of smartphone sales come from China, so anyone with a presence there better have a strong mobile strategy.
  5. 38% of people have used their smartphone to make a purchase, and many use their smartphones inside stores.  Smartphones are a critical consumer tool for shopping.
  6. Mobile is starting to drive significant traffic to e-commerce sites, especially tablets.  Tablet strategies are crucial for retailers.
  7. Mobile payments from the likes of Paypal and Square are growing quickly.  It will be interesting to see how NFC plays in this area.
  8. Mobile operating systems are losing market share to iOS and Android.  I wonder in Microsoft can finally make a dent?

The internet is being dominated by mobile devices, and retailers had better have a strong mobile strategy to meet consumer demand.

Thursday Sep 27, 2012

Oracle Retail Mobile Point-of-Service

When most people discuss mobile in retail, they immediately go to shopping applications.  While I agree the consumer side of mobile is huge, I believe its also important to arm store associates with mobile tools.  There are around a dozen major roll-outs of mobile POS to chain retailers, and all have been successful.  This does not, however, signal the demise of traditional registers.  Retailers will adopt mobile POS slowly and reduce the number of fixed registers over time, but there's likely to be a combination of both for the foreseeable future.  Even Apple retains at least one fixed register in every store, you just have to know where to look.

The business benefits for mobile POS are pretty straightforward:

1. Faster checkout.  Walmart's CFO recently reported that for every second they shave off the average transaction time, they can potentially save $12M a year in labor.  I think its more likely that labor will be redeployed to enhance the customer experience.

2. Smarter associates.  The sales associates on the floor need the same access to information that consumers have, if not more.  They need ready access to product details, reviews, inventory, etc. to meet consumer expectations.  In a recent study, 40% of consumers said a savvy store associate can impact their final product selection more than a website.

3. Lower costs.  Mobile POS hardware (iPod touch + sled) costs about a fifth of fixed registers, not to mention the reclaimed space that can be used for product displays.

But almost all Mobile POS solutions can claim those benefits equally.  Where there's differentiation is on the technical side.  Oracle recently announced availability of the Oracle Retail Mobile Point-of-Service, and it has three big technology advantages in the market:

1. Portable. We used a popular open-source component called PhoneGap that abstracts the app from the underlying OS and hardware so that iOS, Android, and other platforms could be supported.  Further, we used Web technologies such as HTML5 and JavaScript, which are commonly known by many programmers, as opposed to ObjectiveC which is more difficult to find.  The screen can adjust to different form-factors and sizes, just like you see with browsers.  In the future when a new, zippy device gets released, retailers will have the option to move to that device more easily than if they used a native app.

2. Flexible.  Our Mobile POS is free with the Oracle Retail Point-of-Service product.  Retailers can use any combination of fixed and mobile registers, and those ratios can change as required.  Perhaps start with 1 mobile and 4 fixed per store, then transition over time to 4 mobile and 1 fixed without any additional software licenses.  Our scalable solution supports lots of combinations.

3. Consistent.  Because our Mobile POS is fully integrated to our traditional POS, the same business logic is reused.  Third-party Mobile POS solutions often handle pricing, promotions, and tax calculations separately leading to possible inconsistencies within the store.  That won't happen with Oracle's solution.

For many retailers, Mobile POS can lower costs, increase customer service, and generally enhance a consumer's in-store experience.  Apple led the way, but lots of other retailers are discovering the many benefits of adding mobile capabilities in their stores.  Just be sure to examine both the business and technology benefits so you get the most value from your solution for the longest period of time.

Tuesday Dec 20, 2011

Retail Strategy for 2012

Earlier this month I reviewed my 2011 predictions and made new ones for 2012.  Of course I wasn't the only one thinking about what's next for retail.  RIS News published their 2012 outlook, Retail Touchpoints has their 2012 insights, and Stores has their 2012 predictions so there's no shortage of opinions.  Reading these articles, its easy to pull out the major themes and they're exactly what you'd expect.  I could write about each theme, but I thought it would be more fun to remove all but the buzzwords.  See if you can still understand my summations...

  • Mobile-- anywhere/anytime commerce, always on consumers, omni-channel, Amazon's showroom, ubiquitous access to product info, QRCodes, online inside, NFC, loyalty, empowered employees, endless aisles, tablets
  • Social-- one-to-marketing, f-commerce, big data, customer analytics, psychographics, contextual offers
  • Cloud-- deployment, management, access data from anywhere, lower TCO, elastic, utility pricing, security, SLAs, SaaS, outage

This shortened version of writing sure saves time!  Here's the point.  Now is a good time to reflect on this year and think about your strategy for next year, which had better address all three mentioned areas.  I'm not saying you need to embrace all three, but you do need to have a point-of-view on how each can affect your business.  As you're reviewing your strategy, here's a little advice for the new year:

Don't get caught up in the buzzwords.  Look past the coolness factor and figure out how things directly impact the business.  A Twitter account might increase sales, but old-fashion supply-chain management might move the needle even more.  Put a little money toward innovation, and invest the rest toward improving the basics.

Skate to where the puck is going.  Your strategy must not only address your customers but also your future customers.  Run ideas past your teenage kids because they will soon be your customers.  This is especially important for matters relating to privacy, which continues to vary greatly by generations.

Measure twice, cut once.  Strategies must be based on data, not gut feelings.  Execute only after you've done the necessary analysis and have metrics in place to assess results. Challenge the statistics and use multiple sources.

Food for thought.  See you next year at NRF!

Monday Dec 05, 2011

2012 Predictions for Retail - Part 1

2012 is less than a month away, so this is the time of year we start seeing annual predictions.Susan Reda at Stores just published her take and I know IDC and Gartner have also released theirs.  Many of last year's predictions could easily move forward to this year's:  we'll continue to see lots of new alternative payment types, more engineered systems, better social analytics, more 2-D barcodes, greater adoption of cloud, and improved f-commerce.

In past years we've seen the rise of Apple, Google, Facebook, and Amazon but 2012 will mark a year of war between these juggernauts on the retail battlefield.  They will fight over NFC, tablets, digital content, and most importantly, trust from consumers.  Retailers must keep a close eye on all four companies.

1. Mobile Loyalty

Often, loyalty cards are just a way for retailers to give away margin in the hopes that consumers will select them as their preferred store.  But strong programs involve a trade-off: consumers get discounts, and in return retailers get to learn more about their customers (and serve them better), and have the opportunity to influence their behavior.  The loyalty card was a blunt instrument that worked well for the consumer, but didn't deliver for most retailers.

The concept of geo-fencing has been around a while, but there are few retailers that have really adopted it. The smartphone, with geo-fencing enabled, needs to become the consumer's loyalty card where retailers can incent, learn from, and communicate with customers.  In 2012, geo-fencing will take off and deliver value for both consumers and retailers.  Look for new loyalty programs built around smartphones.

2. Facebook Levels Off, Google+ Stalls, Groupon Withers, Amazon on Fire

To put Facebook's 800 million users in perspective, that the same number of people that were using the internet in 2004 worldwide, which incidentally is when Facebook got its start.  Only India and China have bigger populations. That kind of growth just can't continue, nor do I think engagement can increase. The novelty is wearing off, so while there are lots of users, I believe the engagement of those users will wane.

Some of those users will feel more at home with Google+, but I seriously doubt many will close their Facebook accounts and make a permanent move.  Google+ may continue to grow is user base, but users will spend more time on Facebook.  Google will continue to dip its toes in retail with more small stores, a possible free-shipping program (similar to Amazon Prime), and of course Google Wallet and Google Offers.  Other than Wallet, these efforts will go nowhere.

The potency of Groupon offers will dilute with all the "me-toos" that pop up, and retailers will learn that their exchange of profits for new, disloyal customers isn't sustainable.  Not taking $5.75 billion from Google will down in history as a huge mistake.

Amazon's success with the Kindle will translate into more Prime customers and greater loyalty.  The trend for shoppers to skip Google searches and go directly to will continue, and Amazon will get more aggressive with books, movies, and music. Look for Amazon to acquire in the digital content area.  Also, expect Amazon to have another AWS hiccup that gives retailers pause about using the cloud, but overall AWS usage continues to grow.

3. Apple Payments

With all the news about alternate payments, this isn't a stretch at all.  Apple will finally release the iPhone 5 with NFC support and start to leverage their iTunes customer base for payments in non-Apple stores. I don't see how this will be financially viable with both Apple and credit cards taking a cut of each sale, so look for Apple to push customers toward ACH (debit/checking) as PayPal does.  Look for Apple to start a loyalty program to incent consumers to use the new payment vehicle.

While we're on the subject of Apple, I'm betting they will release a new Apple TV product in 2012.  Retailers should care because it will eventually allow viewers to "click on commercials" to get more details on products and sales.

4. Mobile Self-Checkout

Self-checkout, especially at grocery stores, has been around for a while.  Some love it, and some don't.  Smartphones now make it possible to simulate an e-commerce experience in the physical store.  As you add items to your physical cart, you can scan them into your transaction, then pay and walk out the store.  No need to stand in line at all.

Retailers are already putting mobile POS in the hands of its associates, so its not a huge step to expose that functionality directory to customers.  As Apple leads the way, look for grocery chains to quickly add the capability followed by home improvement stores.

More predictions in my next post.

Monday Aug 15, 2011

Emerging Technology and Retail

Gartner recently released their 2011 Hype Cycle for Emerging Technology, and there are several items that impact the retail industry, many of which we've been studying carefully. The hype-cycle diagram is below, and for those that haven't seen one of these, technologies start on the left and move toward the right as they mature.

Source:  Gartner, “Hype Cycle for Emerging Technologies, 2011,” July 28, 2011

I have a few comments to make, starting with the mainstream and moving back towards the triggers.

Location Aware Apps- Foursquare and the like are pretty commonplace now days, and I believe there must be some consolidation coming.  We can't expect consumers to use multiple check-in apps, so I'm betting that Facebook will emerge as the winner with ShopKick sticking around as well.  Apps that find products in nearby stores will also flourish.

Predictive Analytics- Predicting demand is key to running a profitable business, so this is pretty mainstream with tier-1 retailers now.  Adding data sources like social networks to better predict trends should be coming soon.

Biometric Authentication- We added biometric authentication to our POS, but we haven't seen much interest from retailers.  I would guess not having to worry about passwords would be a big cost savings over the long run.

QR Codes- We added the printing of QR Codes on shelf-labels so consumers armed with smartphones can access detailed information.  This seems to be catching on with consumers, and I'm seeing QR Codes everywhere.

Consumerization- As I understand it, this trend means technology gets adopted at home first then makes its way into the business environment.  That's certainly what happened with the iPhone and iPad, Facebook and Twitter, and many Web 2.0 technologies.  These types of technologies will continue to follow young employees into retail stores.

Mesh Networks- RFID buzz died off for a while but seems to be making a comeback.  We've had several retailers express renewed interest in tightening their supply chain using tags that are getting cheaper.

In-Memory Database- Over the past three years we've seen the rise of engineered systems where the software and hardware are engineered to work together yielding better performance.  Memory continues to be cheap, so moving as much data into faster memory makes perfect sense.  In addition to Exadata, look for more on this topic from Oracle in the near future.  Open World is just around the corner.

Cloud Computing- I'm a big fan of utility computing regardless of where the resources are located (private, public, hybrid), which is why I really like Amazon's EC2.  But I'm just not sure retailers are ready to give up so much control.  After all, it only takes one hiccup on Black Friday to ruin a year.

Augmented Reality- The software libraries to support augmented reality apps are finally maturing, so we've started exploring uses in retail.  Get ready to think of advertising and reporting in new ways.

NFC Payment- The technology has been ready for years, but until recently there haven't been big sponsors.  Now we have Google and Isis with competing approaches.  This will take-off, but it will take a while for all stores to be retrofitted with readers.

Social Analytics-  I keep hearing that social for retail is overblown, but I truly believe it should be part of any retailers marketing activities.  Yes the ROI isn't very clear, but since when has marketing had a clear ROI?

Gamification- People are competitive so using games to drive behavior is a natural fit, especially for the younger generation that is never far from an XBox, Wii, PS3, or DS.  Look for more retail tie-ins with games from Zynga.

Big Data- I'm surprised this wasn't placed further along on the chart as I believe the technology is pretty mature, with several competing platforms.  The key is to make Big Data and traditional database systems work together.  This is how retailers will move from segments to individuals and achieve one-to-one marketing.

Video Analytics- As bandwidth and storage continue to get cheaper, video becomes more accessible to retailers.  There's so much information we can gleam from customers by watching how they shop.  Look for interesting combinations of video and location-based applications.

Overall, I believe the major emerging technologies are well represented on the chart.  I can't think of anything that's missing, can you?

Monday May 16, 2011

Social Blueprint for Retail

The Association for Retail Technology Standards (ARTS), a division of the NRF, has three primary objectives for helping retailers: build standards, produce RFP templates, and educate.  Lately I've been focused on the education aspects, helping with the SOA Blueprint, Mobile Blueprint, and Cloud Computing whitepapers.  Our next endeavor will be a whitepaper that discusses the use of social media in retail.

This will be an interesting project since social media is relatively young and fluid.  In my discussions with retailers, most generally understand the value of mobile right away, but the jury is still out on social.  Therefore, this paper will focus on classifying the different types of social media campaigns and programs, examples specific to retail, and advice on ways to get started.  Regular readers of this blog know there are many interesting examples, and retailers will benefit from having them easily accessible in a single document.

Unlike the NRF Mobile Blueprint, this project is sponsored by ARTS and therefore requires ARTS membership.  Big names like IBM, SAP, Oracle, and Pier 1 Imports are already signed-on along with others to create a healthy mix of vendors and retailers.  If you are interested in joining ARTS and participating on the sub-committee, please contact Richard Mader (  There will be several conference calls leading up to our next face-to-face in Minneapolis, July 25-27.

Wednesday Apr 20, 2011

SoLoMo Strategies in Retail

[Read More]

News and ideas about the retail industry with a focus on customers, innovation, trends and emerging technologies.

Oracle Industry Connect 2016

Stay Connect with Oracle Retail


« May 2016