Barring some unforeseen event, retailers have lots of reasons to feel positive as we head into the new year. The economy is good, consumer confidence is high and retail is stronger than might be expected, considering the often-repeated predictions of a retail apocalypse.
While the reality is some legacy giant retailers, including the iconic Sears, are struggling, others are flourishing. Successful newcomers typically are low-cost alternatives – the Family Dollar and General Dollar types of stores – that have found their niche in a changing market.
There’s no question online sales have disrupted the traditional retail space, but brick-and-mortar stores will remain viable well into the future. One reason for that is the wealth of technologies now available to retailers large and small, which makes them better able to compete in a tough marketplace.
The IHL Group projected a 4.4 to 4.6% increase in sales for 2018 in brick and mortar with, c-stores and mass merchants leading the charge. With Omnichannel retailing, customers expect a fast check out with items in stock where the option is given to pick up or return items in stores. Retailers who choose to view the store as a local warehouse in operation and policy stand to gain revenue and market share. Looking into 2019, here are some technology trends retailers should be tracking:
mPOS systems connected to tablets are becoming more and more popular. You’ll notice that when stores and restaurants pop up in your neighborhood, many are using tablet-based POS systems. These systems are lightweight, affordable and easy to deploy, which makes them attractive to businesses. Mobile devices in brick and mortar are often used to cut down on queues, check inventory and increase shopper loyalty. Tablets free up valuable counter space and can increase employee productivity by bringing the checkout to the point of customer decision.
Cash management systems have been gaining traction in retail. As the labor pool tightens and the hourly pay rate increases, retailers are looking for productivity improvements and operational alternatives. Rather than spending hours daily counting and reconciling cash, store managers and employees can focus on other tasks including improved customer service. Let the technology handle cash management at both the front end and the back office. Systems like our SMARTtill® Solution also have an impact in the area of loss prevention by helping reduce cash losses through the accurate tracking of cash in the till in real time. At industry events, we’ve noticed a lot of interest in our SMARTtill® Cash Management Solution, which tells us there is a serious need for this technology.
Back-office cash management and exception reporting applications continue to evolve. When the back end is connected to systems such as the SMARTtill® Solution, metrics and analytics are provided based on actual transaction data helping retailers improve their businesses by streamlining their cash management processes.
Mobile Wallets and Electronic Payments
Mobile wallets haven’t had anywhere near the impact that was expected. One problem is there are too many of them – close to 200 at last count. The other issue is maybe they aren’t as convenient as originally thought. For instance, if your smartphone loses its charge, you can’t use electronic payments. The cost associated with PCI certification can also be prohibitive. Retailers that wish to support a wide range of mobile wallet platforms can pay up to $10,000 per platform, which would be prohibitive. We think the jury is still out on whether electronic wallets will succeed.
The threat of cybersecurity breaches is as real as ever, but lately we haven’t seen as many high-profile breaches as in years past. While large corporations may have gotten better at protecting their data, small breaches occur all the time but they aren’t spectacular enough to make headlines. Small retailers need to stay alert to ensure they have the cyber protection they need.
EMV deployments have taken up a lot of software developers’ time, perhaps to the detriment of the opportunity to evaluate and deploy other technologies. Even so, EMV hasn’t been fully embraced because retailers find it too costly and see it primarily as benefitting the banks. Many retailers have made a calculated risk to forgo EMV, but U.S. automated fuel merchants have until October 2020 or risk being liable for unsecure POS hardware and software. While the expense and logistics of upgrading card readers is high, it’s estimated that fraud in gas stations total $400 million annually. Upgraded chip readers on petroleum pumps will be a likely technology initiative for many c-store and gas stations in the coming year.
In 2019, the impact of technologies on retail such as the Internet of Things (IoT) and artificial intelligence (AI) will grow visibly. As businesses become more digitized, they will introduce new services and initiatives to enhance the customer experience through the effective use of AI and IoT. Robots will start showing up – both at physical stores and online in the form of chatbots – to help customers place and pay for orders. Other technologies, such as digital signage and intelligent price labeling, will become more common.
Retailers have a lot to look forward to in 2019. If the economy holds up, it should be a positive year. Keep an eye out for technologies that could add value to your business and boost your bottom line. Happy New Year!