With a new year getting under way, it’s a good time to consider the major trends affecting our industry. 2018 promises to be another action-packed year, especially in the retail space, where much disruption is taking place thanks to the adoption of new technologies and the ongoing battle between online and brick-and-mortar players.
Here are the major trends to watch in 2018:
1. Retail Convergence
Many industries are being affected by new technologies emerging within the retail space, which is in the midst of convergence between online and brick and mortar. As retail stalwarts such as Target and Walmart work to strengthen their online presence, web-based players such as Amazon are expanding into the physical store space. Amazon’s purchase of Whole Foods is sure to bring innovation to physical retail as the company experiments with new in-store camera technology, being utilized in Amazon Go, that allows shoppers to pick items from shelves and walk out without having to stand in cashier lines. Purchases are recorded and processed electronically.
Industry-wide, Internet of Things (IoT) implementations will facilitate more changes such as automated inventory management, augmented reality (AR) dressing rooms and omnichannel marketing campaigns that leverage technologies such as WiFi and mobile apps to deliver personalized experiences to a consumer.
2. Cash vs. Electronic Payments
Electronic forms of payment such as mobile wallets receive a lot of press, but the reality is that cash remains — and will remain — a preferred method of payment, especially for small-ticket items. Resistance to going cashless will continue from merchants who won’t want to pay the associated credit card fees and from shoppers who prefer cash. Cash confers a level of anonymity that is virtually impossible with electronic payments. It’s likely that in 2018 we will see a stabilization of native cash usage, as consumers make their decisions on which forms of payment they’ll stick with.
3. Data Security
Data security will continue to cause headaches in all industries, especially for companies that handle credit cardholder data and in some case personal data in general. A new data privacy and breach disclosure law known as GDRP will go into effect in May across the European Union that imposes stringent controls and fines companies for non-compliance.
Credit card security is a big challenge — insecure remote access is, by far, the most common method of card breaches. And though it continues to be dangerous, it’s a critical part of the customer-support process. Learning how to properly secure and maintain remote access is crucial to both resellers and merchants. But smaller merchants will always lean on, and trust, the reseller to take care of it.
Efforts to also secure credit card transactions through EMV implementations in the U.S. cost the industry some $50 billion, but the primary beneficiaries are the banks. It’s too expensive for smaller merchants, and many simply take the calculated risk of forgoing the technology because they don’t see the benefit. In the U.S., automated fuel merchants have until October 2020 to update POS hardware and software. As the EMV petroleum liability shift looms on the horizon, we will have to wait to see how this impacts POS upgrades in the future.
4. Shifting Business Models and Routes to Market
As-a-service models continue to gain traction, and in the retail space different approaches are being tested. The upfront costs associated with purchasing new POS technology can be a burden. Retailers could opt to lease a cash drawer in conjunction with printers, touchscreens and other POS components, but the model is still being refined. As IoT technology makes its way to the market, it is likely to drive new innovations and business models that will change how POS equipment is delivered and financed.
Payment Processors are continuing to enter the ecosystem in a big way whether it’s through the acquisition of ISVs or the reselling of hardware at little to no cost to the end user. Lending institutions are now offering Point of Sale solutions to their SMB customers. On-line re-distribution of product through the office stores continues to expand as does the on-line direct marketing channel
5. Loss Prevention
Retailers and other cash-handling businesses will continue to look for efficient, affordable ways to manage their cash. Our SMARTtill® Intelligent Cash Management Solution has been gaining traction, helping our customers to get a handle on cash management by removing a lot of the associated manual tasks, including multiple daily cash counts. The SMARTtill® Solution connects easily into IoT networks and we are working on integrations with technologies such as Bottom of Basket (BOB) systems that scan shopping carts to prevent theft, security cameras, smart safes and other back office systems.
6. Work Environment
With unemployment rates down, it gets harder to attract good employees in retail and other industries. Companies need to create positive work environments if they are to succeed in retaining valuable, experienced people. Compensation helps, but there’s more to it. Employee communication, advancement opportunities and work/life balance also matter, so employers need to take all of that into account.
2018 should be an interesting year. We hope it’s productive and profitable for all of you. To see our 2017 predictions and what came to fruition, click here.
We would love the opportunity to meet with you at NRF 2018. Schedule a meeting today to learn more about the cash management solutions that can increase your operational efficiency, reduce cash loss and reallocate labor to provide a better customer experience overall.