NRF 2013 certainly lived up to its “The BIG Show” billing and delivered an extremely well attended tradeshow by both retail technology vendors and investors. From mobile payments and POS innovation to retail analytics and concierge programs, one key theme throughout NRF was the desire by retailers to replicate – if not improve – the interactive experience enabled through online channels. The growing threat of trends like show-rooming and from e-tail powerhouse Amazon.com and continued inability of traditional retailers to more effective integrate their online and in-store experiences are leaving retailers predictably nervous.
The recent holiday retail sales figures published by NRF are proof positive as sales through ‘stores’ rose by 3% – down from 5.6% in 2011 – while online sales grew by 11.1%. While these channel patterns are not expected to change dramatically, what we are beginning to see – as evidenced by a number of innovative releases at NRF – is that solutions to deliver a true integrated omni-channel solution for retailers are increasingly viable and that retailers are serious about delivering this experience. To that effect, some of the key themes and unique announcements observed during NRF 2013 include:
• The power of the associate. Retail associates represent one of – if not THE – key competitive advantage of traditional retailers. Yet they frequently not treated as such. Clearly high turnover of associates contributes to retailers challenges. However, retail associates need to be better leveraged – and trained – to support the increasingly educated consumer. This means equipping retail associates with solutions to enable real time access to critical product and inventory data and communications and collaboration capabilities within the retail setting. Innovative solutions such as Motorola’s SB1 smart badge are a cost effective example of how retailers can empower and support their associates.
• The integrated retail experience. The industry has been discussing omni-channel retailing for several years. However, the reality never quite lived up to the promise. What we are starting to witness, however, is that for select items – such as apparel or DIY products – fulfillment from store locations is gaining a lot of attention by retailers. Moreover, the seamless integration of the online store-front with the in-store retail solutions is delivering the capability where, for example, Home Depot can fulfill an order it received within 20 minutes by an in-store associate.
• More actionable analytics. For an industry with such slim margins it is incredible how little retail decision makers really know about their operations. Ask how long it takes to run a price mark-up/down and a blank stare will be a common response. Workforce management analytics and the dashboards that make the data readily accessible are the often overlooked, yet exceedingly important tools for retailers in today’s hyper-competitive climate where decisions need to be made spontaneously, often in a highly distributed manner. Solution providers such as Kronos and their recently introduced Workforce Tablet Analytics will assist retailers in deriving real value from Big Data.
• Store format changes. One of the biggest changes we are in the midst of witnessing is the dramatic shift in POS infrastructure. While traditional ‘fixed’ POS stations remain the defacto solution, the rate at which retail organizations are investing in mobile POS and payment solutions and, equally importantly, the rate at which they are NOT upgrading legacy POS solutions. Unique solutions from established payment vendors such as Verifone and Ingenico that enable secure payment across a variety of mobile devices – such as tablets and smartphones – and the integration of new payment types with existing retail infrastructure (thing PayPal and NCR) is driving massive change. While mobile POS offers some clear benefits in the form of improved service quality, speed of sales process and personalization of shopping experience it is not until this year when we expect a fundamental shift towards mobile payment. One major question, however, is whether mobile can sufficiently withstand the rush of a seasonal shopping season such as end of year holiday season.
• Store format changes, part II. One of the other developments and trends we discussed and are tracking is related to the fluidity of the retail operation and the ability for retailers to more rapidly respond to quick shifts in the market. An impact of this is the shift to smaller footprint store formats and larger warehouses or more warehouse space. Technologies that allow retailers to be more responsive to rapid changes in demand or product mix and do so on a individual store basis are increasingly critical.
• Microsoft’s Windows 8 Embedded Handheld. While there has been much anticipation and debate leading up to Microsoft’s official release of their next generation OS for enterprise/ruggedized mobile devices, the cat is finally out of the bag. Among other developments, Microsoft is delivering UI upgrades to bring this platform on par with modern mobile platforms and some of the prototypes we previewed were truly transformational. As expected, there is a clean break from the existing Windows Embedded Handheld 6.5 – which Microsoft will continue to support through 2020. What was perhaps not expected was that the launch will be coordinated with a select group of OEM partners, unlike the broad availability of existing solutions. Microsoft is clearly taking a page out of the Windows 8 launch program. While the volume hit will be negligible – launch partners account for approximately 60% of rugged handheld shipments – in the case of the niche-oriented and still fragmented market, this may backfire.
