How is New Innovative Technology going to affect the Future of Retail?

George Fairfield

August 2015

ContentsAn Introduction…...............................................................................................................3

Digital Wallet & Mobile Payment Services.........................................................................4

Bluetooth Low Energy Beacons..........................................................................................5

Wearable Technology........................................................................................................6

Apple Watch...................................................................................................................6

Google Glass...................................................................................................................7

Augmented Reality Shopping.............................................................................................9

Drone Parcel Delivery Services.........................................................................................10

Car Boot Delivery Services...............................................................................................11

RFID Tagging.....................................................................................................................11

The Internet of Things......................................................................................................13

Smart Appliances.............................................................................................................14

3D Printing.......................................................................................................................14

Bitcoin..............................................................................................................................15

IT Infrastructure & Software............................................................................................16

To Conclude…...................................................................................................................20

An Introduction…Consumer lifestyles are changing rapidly and this is impacting the way people shop. With our increasingly busy lifestyles, changing demography and a greater access to technology, it is no longer sufficient to cater just for the high street customer or the online customer. Instead retailers must adopt an omni-channel approach in order to achieve success.

Consumers are increasingly device agnostic, wanting to shop in the most convenient of ways. Andy Clarke, CEO of Asda Walmart commented, “I’ve been in retail for 30 years. There has been more change in the last 5 years than the previous 25” which largely can be attributed to technological advances. For technology to be of value it needs to create engaging experiences. For retailers this has meant a complete mobile revolution. The introduction and development of smartphones in particular has caused large changes in consumer retail trends. Now 58% and 45% of people use their tablet or mobile respectively for shopping activities and 53% use their mobile phone to compare prices while out shopping figures. This option did not exist 15 years ago. Applications need good visual merchandising and to be optimised to work on mobiles, catering for the modern touch screen shopper; and retailers must have the capabilities to leverage such applications.

And there are more technological advances to come. The future will be heavily tech-driven with greater customer expectations and, as a result, it is important for retailers to leverage these innovative new technologies. This document aims to outline the major innovative technologies that are likely to impact the future of retail.

Digital Wallet & Mobile Payment ServicesDigital wallet and mobile payment services such as, ‘Apple Pay’ & ‘Android Pay’ allow people to use their smartphones and other mobile devices, such as the Apple Watch, to make payments at contactless points of sale. The aim is to simplify the payment experience for customers. By reducing waiting times, achieving higher customer satisfaction and higher consumer confidence in the security of transactions there is potential for generating opportunities for increased sales. Currently the technology is only available in the US and the UK but there are plans to expand into the large markets of Europe, Australia, China and Japan.

While such technology does not eliminate all payment risks, the systems house extra layers of security that mean credit and debit card numbers are not transferred with payments; instead a virtual account number is used to represent customers’ information. The system also notifies customers with a payment confirmation as soon as a purchase is made, making it easy to catch any suspicious activity. Mobile applications such as ‘Find my iPhone’ and ‘Android Device Manager’ also enable customers to instantly lock their devices and wipe it clean of personal data. At present contactless cards in the UK are capped at a £20 transaction maximum (to be extended to £30 in

September 2015). However, given the additional security, digital wallet services have no transaction limit subject to retailers upgrading terminal software. The system also ensures credit charges are processed at low card present rates. Retailers using such services are exempt from fraud liability happening within their stores as Apple Pay incorporates the latest security standards (EMV) mandated by card providers.

In the US 1 million credit cards were registered on Apple Pay in the first three days of availability and there were 220,000 vendors at the time of the launch. Within 1 month, Apple Pay accounted for 50% of all McDonald’s tap-to-pay transactions. It is estimated that there are over 700,000 Android Pay ready stores in the US and over 1,000 mobile applications are configured to work with such services on the Android Mobile Application Market. However, despite this, adoption of such payment services are lower than predicted, but it is hard to tell if this is due to low consumer or retailer adoption rates. However, with the incorporation of loyalty schemes and coupons through Apple’s

Apple Pay on an iPhone & an Apple WatchApple Pay on an iPhone & an Apple WatchApple Pay on an iPhone & an Apple WatchApple Pay on an iPhone & an Apple WatchApple Pay on an iPhone & an Apple WatchApple Pay on an iPhone & an Apple Watch

‘PassBook’ application and Android’s equivalent, this is set to increase dramatically. It is perhaps then not inconceivable to imagine stores in the not-so-distant future that no longer require island point of sales terminals. Retailers instead will evolve digital Omni-channel checkout models that involve a guided, mobile equipped, associate based experience. The result would be the opening of precious store space, enabling more revenue-generating displays and encouraging increased interaction between associates and shoppers.

Bluetooth Low Energy BeaconsBluetooth Low energy beacons are a type of a low-cost, micro-location-based technology that use Bluetooth low energy (BLE) for communicating with beacon enabled devices. It works simultaneously alongside mobile software such as Apple’s iBeacon or Android equivalents, to broadcast or receive tiny and static pieces of data within short distances. The benefit to retailers is that it allows retailers to deliver targeted campaigns to customers’ mobile devices, when entering a store or in store specific locations. Such technology is compatible with all iOS devices with Bluetooth 4.0 ( iPhone 4S and later generation and later iPad Mini (1st

generation) and later, iPod Touch (5th generation) and the newly released Apple Watch), Macintosh Computers with OS X Mavericks, all Android 4.3+ devices & Windows phone devices with the Lumia Cyan update or above. If customers have the shop’s mobile application on their mobile device, then without any interaction with a member of staff, it is possible to provide item details, prices, store location, links to purchase items on the company’s website, and targeted offers based on customer’s online history. The technology can even trigger remote events such as blinking lights inside a fridge to get a customer’s attention when they walk nearby, and enable retailers to gain more information on their customers. It is hoped that such technological advances will improve customer experience in-store by providing customers with all the information they need, boosting consumer satisfaction and giving a greater opportunity for increased sales, while at the same time enabling retailers to have a smarter and more targeted approach.

The Beacons are already being trailed by retailers including US Apple Stores, Virgin Atlantic at Heathrow Airport, and about 100 Regent Street stores. A US McDonalds store

Beacon's sending personalised offers in stores may be a familiar sight in shops in the futureBeacon's sending personalised offers in stores may be a familiar sight in shops in the futureBeacon's sending personalised offers in stores may be a familiar sight in shops in the futureBeacon's sending personalised offers in stores may be a familiar sight in shops in the futureBeacon's sending personalised offers in stores may be a familiar sight in shops in the futureBeacon's sending personalised offers in stores may be a familiar sight in shops in the future

ran a 4 week pilot scheme using the beacon technology with mobile notifications pushing promoted product and sales increased by over 7%. This increase was described by the CEO of Beacon hardware producer Piper, Robert Hancor, as a, “significant statistical change in customer behavior”. House of Fraser Aberdeen has piloted a Mannequin beacon scheme which will provide customers with all information on clothes the mannequins are wearing. As a result of the success of such pilots, ABI Research has predicted that Beacon hardware sales will hit over 60 million units by 2019 and so it may be reasonable to assume that such technology will be commonplace in retail stores by 2020.

Wearable TechnologyWearable technology includes clothing and accessories that incorporate computers and advanced electronics within. These designs, often have clear practical functions and features, but can also having a purely aesthetic agenda. While there have been many attempts at wearable technology in the past, none of these have really caught on. However, recent technological advances and the investment by major players - for instance with the Apple Watch and Google Glass - their popularity is on the rise. Juniper Research estimates than there will be 15 million wearable smart devices by December, 2015, set to increase to 70 million by 2017.

Apple WatchThe Apple Watch, released in April 2015, has been predicted by Forrester Research, to exceed sales of over 10 million in the first year alone, making it the bestselling wearable wrist wear technology to date. If the figures are correct, sales of the Apple Watch will exceed that of all previous watch/wrist wear technology combined. Spatial and operative constraints due to is small size mean it will not be able to support full web browsing or applications designed for the iPhone, pushing retailers to rethink their traditional advertising, marketing and communication strategies. Major online retailers, including US giant Amazon, Asos and Zara, have already launched applications designed specifically for the Apple Watch but with limited capabilities. Amazon’s Apple Watch app for example only has three functions: an item search using Apple’s voice recognition software, Siri; the ability to save products to your

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

The easy integration of Apple Watch, iBeacon and Apple Pay will see a large increase in their use in the future, by consumers and retailers alike.

Amazon Wishlist; and to check-out using Amazon’s 1-click ordering system. These applications integrate easily with those on iPhone and while each platform has its own unique benefits, both applications could work together to deliver an all-round customer experience. Other Apple Watch designed applications such as Salesforce1 deliver instant personal notifications about business priorities to salespeople, service agents and marketers, supporting the workforce and aiming to boost effectiveness and productivity.

The major impact of the Apple Watch on the future of retail through will be its integration with other Apple owned software systems, iBeacon & Apple Pay. Such technology will enhance in-store location specific communication with consumers about new or special promotions and products. These can be tailored to customers through the data collection of their shopping trends and online habits. Customers can then pay for products using their Apple Watch which is deemed more secure than using a phone (due to the need to enter a passcode when putting the Apple Watch on) and ease of use (as it only requires one swipe), so consumers do not have to remove their phone from their pockets. Together, it is hoped that this will improve the information available to customers and reduce waiting times resulting in greater consumer satisfaction and generating more sales. At the same time, it provides marketers with a wealth of data on customers that can be used to observe how a digital advertisement can directly impact physical behaviour. This will allow revamps of planning, merchandising, sales, marketing and other core business strategies. Lowe, the integrated marketing communications network, employs over 45,000 people equipped with iPhones. They believe that if these people were equipped with a smart watch as well to provide connectivity and more with their iPhones, then they could work with both hands rather than holding iPhones increasing productivity significantly.

Google GlassGoogle Glass is a pair of augmented reality glasses making use of an optical head mounted display. It became available to the public on May, 2014, but in January, 2015 it was announced that Google would stop producing the Google Glass prototype but remained committed to the development of the product. More recently there have been rumors of the possibility of a Google Glass 2. Augmented reality glasses similar to Google Glass, have been trialed before. Intermarché, a French supermarket has been testing AR glasses in Mennecy since 2013. Customers wear augmented reality glasses, which show directional arrows to shoppers in order the help them find products stored on their smartphone shopping lists. Shoppers can then indicate a purchase by looking at barcodes and nodding their heads, and the glasses may suggest additional items based on the shoppers location. Similarly it is thought that Google Glass could be used in future to compare items prices, review similar products, check inventory availability, place orders for out-of-stock items and receive suggestions for matching or similar accessories

and items. Retailers adopting such technology may see increased loyalty if they can embed in-store navigation, personalized promotions and shopping lists effectively. It may also mean the checkout zone decreases in importance, providing a threat to those reliant on impulse categories. There are also possibilities for retailers using Google Glass for hands-free order commissioning in warehouses, decentralized fulfillment centers and store locations. Mobile order fulfillment may also be made more efficient by using the glasses for barcode scanning, adopting a ‘pick-by-vision’ approach. Tesco Labs has recently piloted it’s Google Glass application, in which customers can browse goods, view nutrition info and add items to their online basket. Pablo Cobely, Tesco Lab’s Innovation Engineer, described Glass as ‘not a new platform to shopping as it’s functionality is different and more immediate. Instead it compliments other devices and integrates shopping into everyday life’. He also identified seven key areas in which it would benefit retail in the future consiting of: quicker access to relevant data; client specific suggestions; geo-targeted promotions; more personalised customer service; facilitated real time virtual sales, more foot traffic and sales increases.

As wearable technology success has been relatively recent, such innovative technologies are perhaps not yet optimized for retail uses. However, one can imagine them becoming more commonplace within the next ten years, as efficiency is maximized.

Augmented Reality ShoppingAugmented Reality (AR) technological advances may have large effects on the future of retail, changing customers’ experiences both at home and in store. Several large retailers such as H&M have already incorporated AR technology into their mobile apps by basing them on the AR platform, ‘Goldrun’. The Goldrun platform enables users to locate, interact with, and take photos of GPS-linked virtual objects positioned in the real world and is equipped with powerful promotional and social networking tools tailored for the mobile

Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more

environment. The aim is to improve customer experience and generate greater sales. Holiton, an AR solutions firm has gone further by conceptualizing plans for a ‘smart store’. Customer faces will be read upon entry using facial recognition technology and will allow retailers to pull up their shopping history and recommend products. Both ideas are designed to drive customers to both physical and online destinations and hence increase product sales and enhance brand engagement.

AR technological innovations are also being used to enhance customer’s in-store experiences. Lego has introduced kiosks that show a completed model when the box is held up to a camera; L’Oréal recently trialled Modiface’s 3D AR Makeup and Anti-aging mirror; and Macy’s, a US run mid-range chain of department stores, recently opened a AR clothes-trying-on mirror at its flagship New York store. IBM has created a ‘Memory Mirror’ that captures a 10 second clip of a customer trying on multiple outfits and then offers the ability to review different outfits. Such mirrors aim to attract customers with visual suggestions and options for complimentary fashion, style and wardrobe ideas as such expediting the fitting room process and providing a hassle free experience, enabling a better customer-associate interaction. It also provides greater theft protection (as long as clothes are RFID tracked), inventory trading and management, alongside increased data collection which allows more targeted loyalty programs, sales tracking and social media sharing. Such mirrors can also minimise the risk of losing sales by enabling customers to ‘try on’ out-of-stock items and enable retailers to gain instant customer feedback on new or up-and-coming ranges. Intelligent Shelving, eye catching digital displays or alternatively holograms have also been proposed with the ability to easily update the display in order to run special promotions near sell-by-dates, so helping shift low moving stock without having to create elaborate promotional campaigns, while maximising time, space and profit.

Drone Parcel Delivery ServicesRetail delivery services of the future may be much affected by the possibility of parcel delivery by unmanned flying drones. Amazon CEO, Jeff Bezos, hopes drone deliveries will be reality by 2020, with pilot schemes being set up in major US cities by the end of 2015. The Amazon scheme, named ‘Amazon Prime Air’ will rely on Octocopters to deliver small parcels to homes up to 10 miles away, within 30 minutes of placing an order. Google has also trialled drone delivery schemes using fixed wing drones in order to deliver faster and over longer distances. Google’s drones do not land due to safety fears and instead lower goods on a line from 150 feet above the ground. The scheme was successfully trialled in 2014 being used to deliver dog treats, medications and cattle vaccines to farmers in the Australian outback. German logistics giant DHL is already using unmanned

drones to deliver small parcels of

Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more Augmented Reality 'Magic' Mirrors could provide customers with a more

medication and urgent goods to the German island of Juist, located 12 kilometres out into the North Sea. Drones fly under 50 metres altitude to avoid flight authority regulations and while the scheme has only been running from early 2015, it has received much praise from local residents. However, concerns still remain about the safety of the technology and whether it will comply with flight authority regulations. In some countries, unmanned drones are forbidden or owners have to maintain eye contact at all times or drones may not be allowed within 50 metres of any buildings or and drones may not fly at an altitude of more than 50 metres. However, the speediness of delivery and the environmentally friendly nature of the project alongside further innovative drone technology advances will likely see the increased use of drone delivery services.

Car Boot Delivery ServicesSimilarly to drone parcel delivery services, innovative technology may soon allow retailers to deliver parcels to your car’s boot whilst parked at work or elsewhere. In Barcelona at the 2014 Mobile World Congress, Volvo trialled such a programme. Users of Volvo’s ‘Volvo on Call’ app were given the option of choosing their car as a delivery option when ordering online. The approximate location of the car was then passed to the delivery company along with a digital key that would give the delivery driver temporary access to the vehicle’s boot. Of the 100 people involved in the pilot, 86% agreed the service saved them time and would use it again. A similar scheme is currently being trialled by Amazon, DHL and Audi for Amazon Prime customers in certain locations around Munich. Amazon are also working on a similar system to allow goods to be returned via car boots. However, customers’ security concerns still need to be addressed. By providing alternative delivery services that suit customer’s personal needs, retailers may attract increased sales, generate larger revenues and encourage customer loyalty.

RFID TaggingRFID technology may not be an innovative technology, having been invented in 1973 and widely used in retail since 2003. However, the changing role of RFID tagging in current

Car Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and moneyCar Boot Deliveries may also be a feature of the near future, saving customers time and money

years and the potential effect it can have on retailers in the future is why it is included on this list.

RFID is an ID system that uses small radio frequency devices for identification and tracking purposes. The tracking system includes RFID tags, a read/write device and a host system application for data collection, processing and transmission. Originally RFID technology was to be used for supply chain management. In 2003, Walmart proposed a project by which all supplier pallets and crates were RFID tagged in order to create a more efficient supply chain, with the aim of optimizing product deliveries to the right place at the right time. However, due to high costs and concerns as to the benefits, the project was scrapped in 2007.

However, RFID still has much potential in helping retailers become more competitive with online sellers through omni-channel sales. It can be used to close sales, on buyer’s terms, in store, on the web, on social media or a combination of these. It can be used to ensure customers that products advertised on the web are available in store with frequent inventory counting providing greater stock accuracy. It also allows store associates to check the inventory of an entire rack of clothes by simply walking around the display with a handheld reader. Software then displays a list of sizes or styles that need to be replenished, and the associate can focus on the required items in the stockroom. It provides a quick, automated, cost efficient and accurate way to track inventory through the supply chain and in the retail environment. The ability to keep a fully stocked floor will free up time for staff, increase labor savings and reduce clearance items due to incorrect inventory and excess ordering. This can have a major profitability impact. As a result, at present inventory counts could be done up to 24 times a year using RFID, enabling retailers to keep inventory percentage accuracy in the high 90s. However, with further innovative advances, retailers may be able to track products around their store and keep a live inventory count.

Bill Connell, Macy’s’ senior VP of logistics and operations stated that “You can’t be good at omni-channel, without having high confidence at store level, at size and color level.” Macy’s piloted the scheme with RFID tags being built into item tags. Due to the pilot’s success, in 2014 Macy’s rolled out RFID infrastructure in all 850 US stores and with the

RFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracyRFID Tagging will enable quicker inventory counts, and greater inventory accuracy

aim of having half of all replenishment vendors sending RFID tagged products by September 2014. Zara, one of the major UK retailers to embrace this technology estimate that 2 assistants can take a store’s inventory in half an hour, whereas previously it would have taken 10 staff members 5 hours. RFID technology has also been used to enhance customer experience. Burberry is using RFID clothes tags that activate changing room mirrors, with video’s about the making of the piece and showing it on the catwalk. Such technology is ideal for apparel and consumer goods retailers as it is most effective with thousands of stock taking units and high volume sales. Ultimately, the technology allows faster optimal reorder cycles, reduced cycle stock, reduced out-of-stocks and a multi-channel capacity that generates lower costs and therefore greater sales revenues. Given the advantages of such a technology, it is likely to be increasingly used by retailers in the future.

The Internet of ThingsThe Internet of Things, or The Internet of (Nearly) Everything as it is otherwise known, is a network of physical objects or "things" embedded with electronics, software, sensors, and connectivity to enable objects to exchange data with the manufacturer, operator and/or other connected devices based on the infrastructure of International Telecommunication Union's Global Standards Initiative. The Internet of Things allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computer-based systems, and resulting in improved efficiency, accuracy and economic benefit.

Consider this situation: You walk past a store for which you have a pair of shoes in your online basket on your mobile application. A Bluetooth low energy beacon detects your presence and pushes a notification to your Apple Watch telling you the shoes are in stock and giving you a coupon to redeem if you purchase them today. You go in to the changing room to try them on and the ‘Magic Mirror’, detecting the RFID tag in the label, shows a video of their production & recommends a pair of trousers to match. You take a picture with your phone to upload to social media and gain positive reactions. Google

The Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we thinkThe Internet of Things may sound like science fiction but it is probably nearer than we think

Glass notifies you that the trousers are cheaper online. You pay for the shoes by swiping at a designated point of sale with your Apple Watch and get them delivered to your car boot while you continue shopping. You also order the trousers using Google Glass,

selecting drone-to-door delivery so they are there when you arrive home.

Sensors provide both consumers and retailers information in order to make decisions, and by using the data provided and seamless integration between various technological innovations, both the retailer’s and consumer’s aims (greater sales numbers, and more personal shopping experience respectively) are realized. The Internet of Things essentially draws together all available innovative technologies to deliver the best experience possible. While a scenario like this may seem quite distant, all the technology needed is readily available, so it is possible that retailers may operate in such a way in the next 15-25 years.

Smart AppliancesSmart Appliances are home appliances that have been connected to the Internet (as popularized by the Internet of Things) and often are connected to each other. Samsung, the leading supplier of smart appliances at this time, has vowed to ensure that all its new products will be able to be interconnected. IHS Inc. expect strong growth in smart appliances for 2015-2020 with a compound annual growth rate of 134%, estimating that there will be over 700 million smart connected home appliances by 2020. Appliances such as Samsung’s RF28HMELB four door refrigerator include barcode scanners on the door in order to monitor fridge contents, and can automatically add food to users’ online shopping account. Alternatively this can be done by measuring the weight of fridge shelves. They can even suggest recipes with leftover food, switch the oven on at the required temperature and set a timer via wireless connection while showing the cook a recipe on the screen. Such technology may extend to other devices, with dishwashers able to order tablets and cleaning products and bins ordering bin bags. They have the potential to have a large effect on how the retail industry operates with smart appliances ordering products for delivery before consumers realise they have ran out. As a result, such smart appliances may cause large changes to

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

Smart Fridges will be equipped with LCD screens, with the ability to suggest recipes & order deliveries before consumers realise they are needed

supermarket retailers, forcing them to operate with a greater focus on delivery services and less so on the checkout zone.

3D Printing3D Printing has been around since 1984, and is commonly used in industry to produce bespoke parts. 3D printers work by depositing material, layer-by-layer to create a solid object, from the ground up, a process known as additive manufacturing. Plastic is currently the most common ‘ink’, but others in use include ceramics, metal, sand, sugar and chocolate. The process is environmentally friendly as it eliminates unneeded material from the design process and many of the ‘inks’ can be recycled or are biodegradable. Indeed Boeing want to print an entire plane by 2050, due to the ability to save on material and labour costs.

3D Printers have historically been highly technical and costly to buy. However with recent patent expiration, there has been a flood of new 3D printers into the market making them more consumer friendly and dropping average prices from the tens-of-thousands to the hundreds. With the expiration of key patents set to continue over the next couple of years, Credit Suisse predict an increase of up to 30% in 3D printer sales which will have significant effects on retailers. We are likely to see an increase in 3D printers in stores and in homes due to their ability to provide immediacy and customization.

3D printing means that retailers could hypothetically offer vast product ranges without need to consider stocking or replenishment concerns. Customers could bring blueprints or replacement parts for example, into stores for 3D printing, in which the customer acts as a producer and the retailer as the service provider. Indeed several large retailers are already experimenting with 3D printing. Amazon recently launched its 3D printing store that allows users to print and design products from 3rd party sellers for delivery. But 3D printing has the ability to go even further. If prices continue to fall, we could imagine a world where there is a 3D printer in every home. This has the potential to render delivery firms useless and have massive risk to retail and department stores. Consumers would be able to print out a product at home instead of buying from a store, using a centralised open source blueprint directory for the object’s design but would be limited by printer size. In such a scenario, retailers would have to adapt and alter their omni-channel approaches,

3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores3D Printers have the potential to render delivery firms useless and place huge pressure on retail and department stores

most likely into selling printers and requisite materials and/or developing 3D printing designs or design platforms. While this sort of scenario is probably a way off, retailers should at least consider what impact 3D printing will have on both the current and future retail markets.

BitcoinBitcoin is a payment system invented in 2008 that is widely accepted as the first decentralized digital currency. Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into the

public ledger or can be obtained in exchange for different currencies, products, and services. Bitcoin as a form of payment for products and services has grown, and merchants have an incentive to accept it because fees are lower than the 2–3% typically imposed by credit card processors. As a result, Bitcoin banks such as

Coinbase have grown rapidly, and have estimated values of $400 million. Despite not being as innovative as some of today’s technologies, many experts believe that bitcoin or a similar virtual currency may be used in the future. Indeed, the US stock exchange NASDAQ is experimenting with incorporating the underlying technology of bitcoin cryptocurrency into its pre-IPO trading arm and NASDAQ private markets. Bitcoin point of sales solutions are readily available for retailers and in some cases have been widely adopted such as in the Dutch city of Arnhem where over 40 retailers accept Bitcoin as a form of payment. US online retailer Overstock.com received over 830 orders, worth over £80,000, on the very first day it started accepting bitcoin. This raises the question of why hasn’t it been more widely adopted? Concerns remain over Bitcoin’s security and legality and scandals such as, ‘The Mt. Gox Arrest’ have hindered its popularity. However, if the currency can prove itself secure, in the increasingly digital world we live, Bitcoin or an equivalent currency, may become a staple currency of the future, and be accepted by retailers for online, mobile and in-store payments.

IT Infrastructure & SoftwareSo far, much of the innovative technologies mentioned are aimed directly at the customer and rely on direct customer interaction. However, in order for retailers to be able to run such technology to aid both their customers and themselves, they must have the relevant IT infrastructure in place. Original IT systems, which have had modules

Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.Signs, such as the one above, may become increasingly common in shop windows, if digital currencies can prove their security.

added on to them over the years in order to make them compatible with current standards, are not suitable and will not be able to deal with the new innovations and their technological demands as we enter the era of ‘Big Data’. As a result new IT infrastructure technology and software will have to be introduced in order to ensure an omni-channel approach for retailers, and to ensure they do not lose ground to competitors.

Many of the leading IT systems providers offer choice and flexibility with the most comprehensive, modern and secure portfolios of products and services to fit business needs. By enabling consolidation onto database clouds and engineering systems, these systems can be used to empower employees with access to data, applications and features they need to do their jobs effectively (e.g. running price trials to test price psychology and price architectures as is being done at ShopDirect by TPC) while simultaneously lowering IT costs and delivering higher quality of service. The speed, reliability, security and ease of use of many of the systems means they are suited for all types of database workloads, including enterprise applications, data warehouses and big data analysis. They can also reduce the complexity of IT infrastructures whilst increasing productivity and performance. Such systems allow retailers to create a hyper-connected solution delivering seamless communications across fixed and mobile users with high performance, scalability and reliability. This enables retailers to help engage customers with rich multimedia interactions and automate business processes to increase productivity, efficiency and rates of interest. However, there remain concerns over the privacy of what such technology may allow and how retailers should ensure they comply with data privacy standards and clearly communicate to shoppers what they are doing and why. It may be that offering something in return to customers (e.g. a voucher to spend in store) will help ease any privacy doubts.

There are several areas in which retailers need key computing infrastructure in order to maintain a true omni-channel programme. Retailers should ensure they have customer relationship management systems that provide cross-channel, consistent customer experiences using pre-built business processes; integrate customer relationship

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

There will be no point investing in innovative technology, both as a consumer and a retailer, if companies do not have the IT capabilities to support such technologies.

management with enterprise applications, providing connections throughout the buyer's journey and making operations more efficient; and leverage industry-specific best practices for competitive advantage and lower the total cost of ownership. This must run alongside merchandising management systems that help retailers efficiently manage their operations through seamless execution of processes such as purchasing, distribution, order fulfillment & financial close. Merchandise management systems must manage key foundation data: hierarchies, suppliers, locations, and items; provide proven Commerce Anywhere solutions to supporting the customer journey; enable visibility of retail, franchise & wholesale transactions; be flexible, and include extendable fields for easy process extensions; support multiple financial books in a single instance; and manage evolving business processes, models and expansion. Retailers must also ensure they have advanced Order Management systems in place. These software packages must enable sale agents to have access to accurate and complete information via a single repository housing all relevant sales transactions; empower customers through self-service status tracking functionality, accessible on the Internet, in order to improve customer satisfaction; and expedite sales cycles, so blanket sales agreements associate customer orders (releases) with pre-negotiated terms and volume commitments. All these systems will provide retailers with large amounts of data but without software to analyse this data, they remain pointless. Therefore retailers need analytical systems as well. These must enable them to leverage a wide range of information to operate more efficiently, offer new services and discover new ways to strategize, plan, optimise business operations and capture new market opportunities, whether it be promotions or optimum delivery schedules. This will allow retailers gain insight into every aspect of their business, plan ahead, and act with confidence.

This is a fairly lengthy checklist for what retailer’s IT and software packages need to be able to provide and there are some areas that have not been included. In reality though, no software firm is yet to integrate all software packages effectively so as to provide a whole IT systems programme for retailers who are looking to embrace the omni-channel revolution to the maximum.

Despite this, many retailers have already begun to update their systems to cope with the demands of the ‘Big Data’ era. Arcadia is currently undergoing a complete IT systems overhaul, with the help of TPC Consulting, from their original Legacy system to Oracle’s Retail Merchandising Warehouse Management System and Global Supply chain system, as part of the Horizon programme. In doing so, Arcadia will gain real time supply chain visibility alongside the ability to perform cost modelling for merchandise orders. The system acts as a backbone to enable Arcadia’s international expansion and omni-channel revolution. French retailer Carrefour chose Acxiom’s Audience Operating System (AOS) to increase the effectiveness of its marketing campaigns. With AOS, the

retailer can connect online and offline data sources and thus provide a more personalised brand experience in store or online. It also enables marketers to run analytics to segment audiences and provides a comprehensive view of the audience across channels, devices and media sources. This can be enriched by demographic, contextual, behavioural and social profiles. To address privacy concerns, Axciom has launched aboutthedata.com, a website giving consumers access to the data Acxiom has collected, along with options to opt out or correct it. Macy’s have begun using Google’s proximity marketing platform called ‘Nearby’ to tempt customers in a shopping mood into stores when using their smartphones to search for items via Google. Browsing shoppers are informed if they can find their desired product at a nearby Macy’s, and are shown outlet directions and a direct link to the item at macys.com alongside product images, details, prices, sizes and colour.

Retailers IT infrastructure technology and software systems will play a crucial role in the future of retail. If retailers have systems that cannot cope and adapt to the demands they will not be able to embrace the next step in the digital revolution.

To Conclude…A lot depends on the rate of uptake of such technologies. Some technologies are relatively new and need to be refined (Google Glass, 3D printing and drone-to-door deliveries). Others are more advanced having been around for longer, (RFID tagging and the culmination of wearable wristwear technology with the Apple Watch). As a result the timescales in which these innovative technologies are likely to impact will vary. Innovations such as Digital Wallet & Mobile Payment Services, Bluetooth Low Energy Beacons, Apple Watch, and RFID tagging will take preference in the short term over alternative delivery services, alternative currencies, smart appliances and 3D printing. Adoption also relies on whether retailers are willing to install the infrastructure needed for such technologies in their stores. If retailers do not have the management systems and store hardware in place then they will not reap the benefits of such innovations. Until these adaptations are achieved and the correct level of infrastructure obtained, the Internet of Things and complete integration of all sensors and devices seems to be a distant ideal.

The rate at which technological advances progress, will quicken in coming years as our knowledge continues to grow and develop. Predicting which technologies will play a large part in the short and long term future of retail, and how to implement them to the benefit of both the consumer and the retailer, will be critical for retailers to achieve success. Retailers should thoroughly assess which innovations will bring the most benefit as this will vary with each retailer. The retail experience for the consumer will be increasingly personalized and localized giving higher customer satisfaction figures. The retailer will generate more data on customers which can be used to optimize both consumer experience and sales revenues.

One thing is clear though; the shopping model of the future is poised to look radically different from that of a decade ago, and even today. Retailers that fail to take advantage of such innovations and do not keep pace with changing technological attitudes will not be successful.