Tech advances useful to retailers are breathtaking these days, bringing the potential to unleash previously unheard of levels of communication with customers that could boost loyalty and translate to sales. But these technologies are fraught with peril, too, because fumbling in this arena carries a steep price. Badly designed systems, poor communications, disregard for consumer demands — all kinds of poor performance on the part of retailers could turn customers off. Consumers themselves are tech-savvy and, as studies show, they know their data has value.
Here are five areas of retail technology that will loom large in 2014 — and could empower both retailers and their customers in unprecedented ways.
1. The intelligent store, Minority Report style
Most of the interactive in-store technology out there is fairly experimental and still has some flaws. Most notable is Apple’s iBeacon, which uses low-energy Bluetooth to locate and interact with customers via their mobile phones. iBeacon is really the new kid on the block — there are a variety of Wi-Fi based packages from companies like Euclid, Measurence, ReadMe Systems, and others that have provided stores with tracking capabilities for a while now. Kinks have yet to be worked out, with some customers irked at too many intrusions, or glitches like too many welcome messages. They want retailers to be up front about their tracking technology, and they really want something in return. But research does show that, done right, customers actually appreciate it.
2. The intelligent store, not-so-Minority Report
Much less exciting than locating, welcoming, and schmoozing customers via their phones in-store, but probably just as important, are the 21st century’s upgrades to the UPC. Beaverton, Ore.-based Digimarc, a digital watermarking company, has developed a new barcode invisible to the human eye. The new UPC can, therefore, be printed all over product packaging, eliminating any need to search around to scan the price, making checkout super-speedy.
Another technology that would take the UPC’s role in inventory up a notch is the use of radio-frequency identification (RFID). Using a hand-held scanner, staff can keep track of in-store inventory, sending information to the warehouse — or anyone else who wants the information — in record time. Kohl’s Department Stores, among others, successfully piloted the technology last year and is planning to expand it in 2014.
3. Mobile maximization
IBeacon is part of unlocking the potential found in each retail customer’s smartphone, but it hardly begins or ends there. Many retailers have found some success with mobile apps, but, when the novelty wears off and there is no real payoff, many customers end up deleting them. (That actually poses a problem for iBeacon-based systems, too, of course, because your customer needs your app for it to work.) But mobile — both phones and tablets — also poses a challenge that could be well worth meeting. Boosting apps with loyalty and frequency perks is one way to keep that icon on a customer’s smartphone. But before retailers get too snazzy, they should look closely at how and when mobile apps are effective.
Bottom line: Consumers' experiences with mobile apps, good or bad, are crucial because those experiences can turn them on or off to your brand. As shown by a recent study by mobile platform company Usablenet, more than three-quarters of shoppers using tablets, for example, base their opinion of a brand on an ‘unsatisfying' experience with its mobile site.
Another area with great growth potential — and great need for improvement — is mobile-based email. In Q4 2013, Americans opened 64.75% of emails on smartphones or tablets, compared to 35.25% on computers, according to a report by Movable Ink. But too often, retailers’ targeted emails fail on phones, sending out poorly optimized graphics and dead links — and potentially losing those customers in the process.
4. Snazzier displays, on and offline
Holiday window displays in major cities went all out this past season. Not a major story in itself because the holidays are a traditional time for twinkling windows, but many retailers took things up a notch, with interactive technology and other over-the-top designs. Apple Stores, Inc., one of the best-known brick-and-mortar success stories of our era, consistently features well designed window treatments. For example, special attention was given to Mac’s 30th birthday this year, with displays that featured Lite-Brite-like LED lights. Enticing customers into brick-and-mortar stores is increasingly a challenge, so windows may need a little extra dazzle all year round.
The need for seductive store-window design is all the more important when you consider that online graphics are also becoming easier on the eye. Amazon hasn’t yet seen the need, but Pinterest’s influence on sites like eBay is clear. And 3-D product photography — like the services offered by Chicago-based Snap36 — provides clear, rotating images of products, and is competing with the opportunity the customer has in-store to try on clothing or hold a product in their hands.
5. Chip and PIN and better e-commerce password systems
And, of course, there’s the “eat your vegetables” of the latest in retail technology. Right now, the magnetic strips on credit cards hold access to consumers’ money, their good credit, and even their personal information. These are simple, you might even say lame, magnetic strips that have been compared to an eight-track cassette and that are readily available to data-mining thieves. Look for every major retailer to upgrade, lickety-split, to systems that use cards with the added layer of security already standard in Europe and Asia — a chip embedded in the card that spits out a unique code (or PIN) for every transaction. The technology is known as EMV, for Europay, MasterCard and Visa, and nick-named “chip and PIN.”
But online commerce needs to take better precautions, too. Despite all of the hype over Christmastime credit-card theft at brick-and-mortar stores, most credit card fraud happens at “card not present” moments — on the phone and online. In a recent study, password-management company Dashlane found most major retailers allow easily hackable passwords with poor filters.
In the end, no amount of fancy mobile apps, cheeky in-store customer interactions, or enticing emails can really make up for the distrust that comes from finding fraudulent charges on your credit card after going shopping.
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