Big Blockers: What’s Holding Back Retail Tech?

Hello, and welcome to The Hat Shop. All the size 7¼’s are on aisle 3, where you’ll find a nice cluster of your favourite colours at the far end. Just walk out wearing your choice and we’ll debit your account. Oh, and around 11am you tend to go for a small black Americano with one sugar – here, it’s on the house.”

Sounds the perfect retail experience, doesn’t it? Identifying the customer on arrival, the store (be it physical, digital or virtual) offers a personalised service that’s so seamless and well-informed, it’s almost more difficult for the customer to turn around and walk away.

At least, that’s the utopian view.

On the other side of the debating table is a noisy rabble, shouting out nasty words like “Gen D” and reminding us that this technology has existed for some time, and yet is only slowly being deployed.

You have to admit, they have a point.

So as retailers and tech enterprises prepare for this year’s NRF 2016 in New York, where they’ll show off their very latest tech inventions and innovations, we consulted Mark Fagan, CEO of retail services firm eCommera, to look at the other side of the coin.

Why isn’t this utopian future here yet? What’s slowing us down? What are the blockers in retail tech – and, more to the point, how will they be overcome?

Why might some retailers be reluctant to adopt new tech?

This is understandable; many retailers have 20-year-old warehousing systems, POS systems and the like, and they can’t go replacing their entire stack every five years when it already does the basics very well.

But in our experience, the retailers who succeed are the ones who are prepared to take on this challenge. On the one hand we have customers who never really grow because they see only obstacles in new tech; whereas we have others who find ways to integrate it.

The good news is that software vendors and hardware manufactures work very hard to make their new technology complaint, so there are solutions out there for companies looking to optimise their trade through technology.

What’s your favourite example of a retail tech being slow to take off?

Social buy buttons – in their present forms, they simply don’t work. Major online retailers these days have at least trimmed their checkout process down to a single page; but if you click a “buy now” button on social media you typically end up being bounced around a long sequence of different web pages. Retailers don’t like this process because it disorientates the consumer and erodes their trust.

Then there’s beacon technologies. There have been successes with beacons, but some of the UK supermarkets who’ve run beacon trials have encountered stumbling blocks – for instance, the fact that they rely on Bluetooth. It’s a fairly close-range signal which depends on the consumer having it switched on on their phone. So there are issues here which are still being worked out.

Which technologies have been more successful – and why do you think they’ve succeeded?

Mobile is now really starting to pick up. It’s had a slow start, but there are use-cases where it’s really been demonstrated to solve problems for both merchants and consumers – NFC, for instance, or cases where consumers can pre-order products to avoid having to queue.

And that’s the crucial point: if your product is founded in the technology itself, you then have to find a use-case and you run into all sorts of problems. Whereas if you start with a business problem or a business opportunity and your whole design is focused on an objective, you end up with a success.

RFID is another great success story. It solves major problems for retailers, aiding not just with theft prevention but also stock tracking. If you sell something and then discover you’re lacking stock, you end up with a very unhappy customer who’ll never buy from you again.

RFID solves this problem by allowing retailers to keep a single view of their stock – so you can bring on new customers in new channels and ensure a consistently high quality of service.

What really drives the adoption of new tech? How can you ensure your product succeeds?

It obviously starts with the presence of problem: why would the retailer implement this, and what would they get out of it?

After that, it’s about ease of use. If it’s easy to use, customers will adopt it, and then it trends and builds in its own light.

And finally there’s the marketing effort – you need to clearly communication the proposition and the benefits behind it, so that the consumer really understands why they should start using your technology.

Thanks to Mark

Mark Fagan is the CEO of eCommera, a global retail technology & consultancy firm.

eCommera is part of Dentsu Aegis Network.

 

 

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