What was 2017 the year of in retail?
Justin Zeigler, Director of Product Strategy, Datacap Systems: “2017 was the year of Omnichannel and frictionless payments. As more SMBs add ecommerce functionality to their web presence, the need for a consistent payment experience across brick and mortar and online channels becomes increasingly important. In this case, traction fosters traction, so as consumers adopt and then begin to expect or even demand this functionality; SMBs will in turn push their payments providers for a solution to accommodate their customers.”
Bill Lodes, EVP, Business Development & Strategy, First American Payment Systems: “2017 was the year of evolution. Technology has evolved significantly when it comes to retail. There have been many advancements this year as well as threats to technology, such as data breaches, that have caused ISVs and technology providers to really analyze and evaluate their infrastructure to determine what changes are needed to keep up with their competitors. Retailers are particularly sensitive to security and have pushed for continued innovation from providers to prevent breaches. Beyond security issues, retailers have also realized that they must adapt to accommodate the changing ways that customers prefer to purchase goods and services. Options such as ordering ahead as well as in-aisle and tableside offerings have expanded the ways customers spend their money.”
Brenda McCurry, vice president of merchandising, ScanSource POS and Barcode: “2017 was the year of online and mobile shopping. This was caused by the increased focus on retailers creating a better online experience and the ease of which apps make purchasing from mobile devices.”
Ravi Kanniganti, Director, Vertical Market Strategy – Retail & Hospitality, Zebra Technologies: “2017 was the year of digitization and mobile. Both have become the most effective platform for retail operations.
Retail is undergoing a massive transformation led by digital commerce, customer expectations, and convenience. Retailers are trying to remove friction from the buying process. The role of traditional stores has changed drastically. Now stores are a:
- Experience center
- Instant gratification center
- Fulfillment center
- Product knowledge and discovery center
- Entertainment and engagement center
- Place to get advice on products and get help in making right choices
- Store as service center
The sales associate role is transforming. Associates aren’t solely responsible for back-end work and replenishing aisles at the lowest cost possible. Today, they are business development personnel who enable successful business both at the store and offline. They are product experts and can advise customers by narrowing down their choices and help with sales conversion. Associates help customers facilitate and complete deliveries for out-of-stock orders to their home. They fulfill online orders and enable click-and-collect models. They are the first line of interaction customers see and interact with.
Stores need to empower associates with the right tools to do their job. Enterprise mobile devices play a critical role due to their multi-faceted capabilities.
Technology also plays a critical role in the transformation. Inventory control and visibility is the foundation for retail operations and using stores as fulfillment centers and offering click and collect. In our 2017 vision study, we found that out-of-stock or not being able to locate an item in the store is one of the largest factors for customer dissatisfaction. Retailers are aware of this and we are finding that investments flowing into RFID and other technologies, help manage accurate inventory. Retailers are also investing in self-checkout technologies, personal shopper solutions and frictionless shopping.”
How are these trends changing the retail market?
Justin Zeigler: “More and more consumers are now expecting a universal payments experience both in-store and online, so savvy SMBs will be looking for a payments partner that can provide a comprehensive omnichannel payments solution that’s both functional and secure.”
Bill Lodes: “This year has really pushed many technology companies to innovate and bring new products to market. Because of threats to data safety, retailers can no longer afford to be reactive when it comes to payment data safety. They must be proactive to be able to earn the trust of consumers. Customers today are looking for the latest technology that is secure and safe. The varying ways customers want to interact with and be served by technology, including payments, has changed dramatically from the prior years. This is why customer loyalty and rewards programs have proven so successful for retailers. Those retailers who are very in tune with their customer base and will continue to demand new and innovative technology, such as AI and cloud-based solutions, to best serve their customers whether it’s in payments, inventory management, marketing, customer service, etc.”
Brenda McCurry: “From large big box stores to local boutiques, all retailers now need an online and in-store strategy.”
Ravi Kanniganti: “This is a positive for the IT ecosystem. Digitization and moving to mobile isn’t just an option, but a must-do for meeting ever-changing customer expectations. Retailers are investing in technology, training and empowering their sales associates for success. They are also changing their internal HR processes to compensate sales associates for online business, enabled from the store.”
How do you think this will affect 2018?
Justin Zeigler: “Successful SMBs will embrace online consumer engagement and will push for the payments integration tools to cover that need. Payments providers will have to offer a full suite of EMV-enabled payments for in-store use and cross-platform tokenization options to connect the in-store and online experience in order to satisfy emerging merchant requirements.”
Bill Lodes: “Next year will bring more change and evolution in this market.There will be no rest for the weary as the market continues to progress quickly with new technology offerings and services. ISVs need to keep up with this rapidly changing environment an ensure their software meets the needs of the market. They must have an established roadmap with software releases that keep up with the pace of technology in retail today.”
Brenda McCurry: “Online and mobile shopping are going to continue taking their share of retail revenues, marketing strategies for retailers are going to have to shift focus from a group to an individual.”
Ravi Kanniganti: “In 2017, tier-one, forward-looking retailers made big moves and in 2018, this trend will continue, we will see a much wider adoption across most retail formats.”
What is the most significant technology trend in this market that ISVs should be aware of heading into 2018?
Justin Zeigler: “Consumer demand for mobility, specifically mobile POS extensions, will continue to increase as more solutions become certified and available and associated hardware pricing becomes more competitive. ISVs should be aware of their current and future mobility options for payments and incentivize their sales channel to recommend mobile options for merchants that could benefit.”
Bill Lodes: “We will continue to see the proliferation of omnichannel marketing and retail where consumers will require various ways to shop and pay across devices, technology, and in-store. ISV software must provide flexibility for customers that want to order online and pick up in store, order from the store and have a product shipped to their house or simply by telling “Alexa” to order for them via their connected device. The list could go on and on listing the types of buying situations that customers today are expecting. Technology needs to be frictionless to the consumer and needs to adapt to the various ways customer’s shop and pay for their purchase. Because of this, retailers need to be more flexible than ever when it comes to outside the box approaches to their own positioning amongst competitors as well the way that their customers prefer to shop and pay for goods and services.”
Brenda McCurry: “It’s no longer just about the cash register or even having mobile associates, it’s about tailoring a shopping experience that gives consumers a reason to return to the store.”
Ravi Kanniganti: “There are four key technology retail trends that ISVs should be aware of for next year. They include: enterprise mobile, wider adoption of Android OS for front-end and back-end applications, video analytics and customer engagement technologies such as beacons, AR and VR.”
What is the biggest threat to retail and to the technology providers within it in 2018?
Justin Zeigler: “As more merchant services providers descend on the channel, the race to the bottom as it relates to processing rates has led to collapsing margins which in turn negatively impact the payment processing residuals that many dealers have come to rely on. Technology providers that rely on recurring revenue from payment processors would be prudent to bolster that income with supplemental value-added services via an as-a-service sales model. Of course, ISVs are also being threatened by the influx of processor-proprietary Point of Sale, which makes the additional value-added services offered by the dealer channel that much more important.”
Bill Lodes: “With retail, the biggest threat is still the security of their data and systems. Today more than ever, hackers are finding new ways to get into retailer’s data and steal names, social security numbers, and credit card information. Fraud and Identity theft are on the rise. Retailers will need to be laser-focused next year on ensuring the security of all of their systems, software, and technology is the best it can be preventing fraudsters from hacking in and stealing valuable customer information. When it comes to payments, working with a payment partner to ensure that payment data is safe will be critical.”
Brenda McCurry: “Online shopping and ecommerce. There is also a shift with millennials in that they prefer experience over materialism.”
Ravi Kanniganti: “We do not see any threat to this market, just opportunity. Retailers are going through massive transformations from technology, business models, process, people, M&A activity, etc. Technology providers must act as trusted advisors and help ensure the transformation is a seamless one. Having clear business outcomes, scoping and phasing the project implementation, good project management practices, pre-built APIs and integration with OMS, WMS and retail systems will help generate value from technology implementations. The right hardware needs to be selected along with security, longer battery life and the OS platform that comes with pre-built development tools. Selecting the right partner who can provide enterprise support and MDM is critical for success.”
What is the biggest opportunity in this market that ISVs should capitalize on in 2018?
Justin Zeigler: “ISVs should take advantage of their channel presence to perform on-site needs assessments to proactively deliver value-added services that will provide immediate and measurable benefits for the merchant. These value-added services might include omnichannel, mobility, gift/loyalty, CRM, etc., and will not only help to foster a long-term working relationship with the merchant, but will also serve to validate the need for an on-site POS provider.”
Bill Lodes: “Retail ISVs need to look at their software and the functionality it provides from the end user view. It’s all about the customer experience and their interaction with the technology. If it’s easy, seamless and allows them to shop in a number of ways, they will continue to come back to that retail store. If the technology makes shopping or purchasing more difficult, the customer will likely not come back. It’s on the ISV to understand how to enhance and improve this experience in order to keep growing in this competitive market. This means that retailers will have to put themselves in the shoes of their customer’s and take an honest look at how intuitive their current system truly is. As always, retailers also need to keep their eyes on the competition and consider how they match up to them when it comes to payment options and overall payment experience in store, online or via a mobile device.”
Brenda McCurry: “Really targeting the individual. If I walk in the store and technology alerts an associate of my past purchases and my size and preferences, they can bring me product suggestions based on data. Stores will need a lot of new technology, including cameras and video, facial recognition, and intelligence.”
Ravi Kanniganti: “Digitization. Use cases that can reduce or eliminate friction in the buying process and applications that can do the same. The checkout process is still one of the biggest friction points in brick and mortar stores and an area to focus on is customer engagement and self-help.”
What can ISVs expect to see from your company in 2018?
Justin Zeigler: “ISVs can expect ongoing feature development and product enhancement, including new EMV hardware certifications, more mobility options, and the move to frictionless installation and support of payments solutions.”
Bill Lodes: “As we work with more and more retail ISVs, we have identified a number of products and solutions that will be upgraded or rolled out in 2018 to meet their evolving needs. Expect additional payment options including biometrics and mobile wallets as well as additional payment security products.”
Brenda McCurry: “Opportunities for partnership. As ScanSource continues its focus on delivering solutions to our reseller partners, there will be an increased focus on the entire solution, software, hardware, and services.”
Ravi Kanniganti: “ISVs can expect to see a wider selection of purpose-built enterprise mobile computers with different features and price points. They can also count on Zebra to deliver enhanced tools for mobile app development, after the sales support and extended OS support, so customers get ROI from their IT investments.”