Julie Stapen for LightSpeed
The rise of technologies like the beacon, heat mapping and information kiosks have painted a high-tech picture for the future for retail. Major brands such as Lord and Taylor are already taking advantage of these technologies to create a unique in-store experience, send personalized marketing messages to customers, and design floor displays that maximize sales. These cool technologies are very Jetsons, and will certainly change how people experience retail. And retailers recognize this; a recent report from Business Insider indicates that beacon technologies are expected to see a five-year compound annual growth rate of 287 percent. But is this a reality for ALL retail, or just the megastores?
Much of the success and potential for real business impact with these advanced technologies is dependent on having your operations online, integrated and in real time. For instance, being able to stop discount notifications once an item is out of stock is essential. If not, your technology runs the risk of gaining the “annoying” label. Smaller retailers are already struggling to compete with the Amazons of the world, who are not only out-pricing them, but now making a more aggressive play for their customers. Some are still using old school cash registers, and post-it lists of inventory needs when a space appears on their shelves. Beacon technology is a solution to a problem that is not even on their radar yet.
In Silicon Valley and its various metropolitan cohorts, amenities like iPad checkouts and emailed receipts are more commonplace. The bulk of independent retailers, however, have a different reality. They are still experiencing major pain points like relying on the manual entry of customer information or lack of real-time updates on their inventory. A digitized, cross-channel retail management system has yet to become the standard, seriously limiting the number of retailers that can actually even use some of these flashy technologies properly without completely overhauling their management system. For independent retailers, that’s simply too much time and money that could be used toward other sales driving activities.
To really understand the appetite for such technologies, we decided to go straight to the source, surveying 650 independent retailers. The reality? For small to medium retailers, the survey found, the average tech budget is less than $200 per month. And they are putting their tech dollars first into things they say improve efficiency and immediately make an impact on their bottom line long before they invest in advanced technologies. So while a few big brands like Nordstrom have started tracking customer movements’ in-store, independent retailers, now more than ever, are focused on the technologies that are going to make an impact on their business today. But, although 79 to 89 percent of independent retailers we surveyed don’t plan to implement advanced in-store technologies like fitting room or geo-sensing capabilities in the next few years, they are looking toward the future. Based on our survey, here are our forecasts for where “Main Street” retail will be investing in the near term:
In-Store Mobile Device Explosion
The percent of retailers using tablets, smartphones and other mobile devices in-store is expected to double by the end of 2014. For those that are already using mobile for checkout or inventory lookup, 80 percent say that it has increased sales.
Predictive Analytics
Forty-four percent of retailers said finding the right inventory levels was their biggest challenge—more than any other business obstacle. Twenty three percent of merchants surveyed said they currently use predictive analytics to help make more informed buying and selling decisions, and the effect of this data is powerful; 96 percent of those respondents using predictive analytics said it has helped increase sales. Another 48 percent plan to implement predictive analytics in the near future, a 108 percent increase from the current.
Moving Online
E-commerce will continue to attract budget as retailers look to add another channel through which to engage their customers. While less than half — 38 percent — of those surveyed, currently have an online storefront, merchants are planning on investing in ecommerce. Our survey found that 38 percent without an e- commerce presence say they will open one either by the end of the year or the near future — a 100 percent increase. Those that already have an online store see its value and will invest to make it more robust. Fifty eight percent plan to increase budget for their online store in the next 12 months.
There is a huge technology trend in catering to the “now” economy. If consumers want their house clean, they can order a housekeeper with the click of a button. Want an Amazon Fire? No problem, a drone will fly it to you. In the case of the beacon, mobile is a huge opportunity to connect directly with consumers while merging the online and offline retail worlds, and there are some incredible technologies that can truly create the store of the future. Some big brands are already there. But there is a lot of work to be done before “Main Street” retail is ready.
Dax Dasilva is the founder, CEO and creative mind behind LightSpeed.
No comments:
Post a Comment