Tech terms every modern retailer must know
Technology and consumer behavior in the retail industry are moving faster than ever, leaving many retailers dazed and confused. Should I get informed about the cloud? What is the difference between AR and VR? But most importantly, what technology do I need in my stores?
Artificial Intelligence (AI)
The simulation of human intelligence processes such as the ability to recognize images, text, or speech and the ability to take decisions by computer systems.
How does this affect my business? Although we shouldn’t worry about being replaced by intelligent robot-employees just yet, AI has become an important investment for retailers. Take chatbots, programs that can conduct conversations: they are one of the stronger drivers behind the spread of the 24/7 customer service. They are popular with customers, too: according to an IBM study, 65% of millennials would rather interact with bots when in need of service than talk to a live agent. AI-powered visual search (you take a picture of a product, and the software shows you similar items), and voice-based search and even shopping are also getting increasingly popular. By 2020, 50% of all searches will be carried out by voice, comSore predicts.
Smart retailers have already started reevaluating their product data and online resources to ensure they do not miss this opportunity.
Augmented reality (AR)
A technology that superimposes a computer-generated image over real-life environments. The result is a composite view that mixes the real world with digital imagery and data.
Does this matter? In the past few years, retailers across different industries have been playing with AR apps. Most experiments had the goal of either enhancing the customer experience or decreasing the risk of product returns. In the latter case, the concept of the use AR apps to let customers virtually test a product – for example, seeing if a makeup item matches their skin hue, if a dress looks flattering, or whether a new sofa fits in the living room. These are, however, early days; it is still unclear whether AP apps have an effect on diminishing product returns.
Business Intelligence (BI)
Organizations’ business data is usually dispersed, being collected and stored across different systems. Business Intelligence software collects all this data from different sources, integrates it, and analyzes it. It also transforms raw data into actionable, insightful information that can be used for better decision making.
Should I look into BI? The amount of data that companies produce has been growing at a dizzying rate. BI software can help retailers effectively mine this data for insights, so they can use it to make profitable, informed decisions. Cloud-based software, in specific, is getting increasingly popular, as it enables retailers to use great computing powers and complex datasets to crunch their data – all without having to make major investments.
Click and Collect
Also known as “BOPIS” (buy online, pick up in-store), this shopping model lets customers order or buy products from a website, and pick them up from a physical store location.
Is this for me? There are three very powerful reasons to implement click and collect in your stores.
- Click and collect is popular with customers, as it lets them select and pick up at their own pace. This is especially important to modern customers, whose busy lives mean they don’t always have the time to wait for a delivery at home.
- It helps drive traffic into the store.
- Click and collect has been shown to increase basket size. According to OnePoll research, 65% of customers using click and collect make unplanned extra purchases while they are picking up their orders in-store.
Essentially, “cloud” is another name for the internet. Cloud-based services – storage and access of data and programs, network, analytics and more – are accessed and delivered over the internet, on-demand.
How will it help my retail business? Cloud computing is currently the fastest-growing segment of IT. IHL Group reports that cloud-based software is bringing retailers lifecycle cost savings of 25-50%. How? To start, cloud-based solutions tend to require lower upfront investments than traditional on-premises software. The cloud also enables businesses to access a host of innovative services (for example, AI and machine learning) which would be way too complex and costly to implement on-prem. Consumer tastes and behaviors change faster than ever. Cloud-based software can give retailers the agility they need to keep up with changing demands.
Cloud-based POS (or online POS)
Point of sale software that can be directly accessed from the web, and is usually run on a web browser.
Is this for me? Cloud-based POS has been steadily growing in popularity. According to Hospitality Technology’s latest “POS Software Trends Report”, 61% of businesses want their next POS system to be cloud-based. Some of the reasons behind this trend are cost-effectiveness and scalability: online POS is usually available as a service, for a monthly rental fee, and does not require large upfront investments. on top of that, online POS systems can be quickly deployed (no local hardware and software installation is required), and as they run on web browsers, they are compatible with most hardware. They are especially suitable for retailers with good network connectivity, and ideal for businesses prone to seasonality.
A global standard for secure payments. EMV cards are embedded with a smart chip that ensures that the card is valid. The EMV standard applies to credit cards, debit cards, and to the payment terminals and ATMs that accept them.
Is this important? EMV helps protect retailers and consumers from fraud, removing the responsibility from merchants in case of losses deriving from the use of counterfeit. lost or stolen cards. Today, retailers in several countries are required by law to have EMV-compliant payment terminals. Retailers that don’t comply are considered liable for any fraudulent credit card charge that takes place on their premises.
Check the legislation in the countries where you operate, and make sure your software is always compliant with legal requirements.
A concept that allows customers to browse and order products that are not available in-store, and have them shipped to any store location, or to their home address.
Should I look into this? Today’s consumers expect the same large product variety and speed of search in-store and online. The endless aisles concept enables retailers to offer a much broader product assortment without the costs associated with sending stock to each store, and without the constraints of limited floor space. At the same time, the possibility to access a much larger inventory means that retailers don’t have to lose sales opportunities just because an item is out of stock in a specific store location.
Enterprise Resource Planning (ERP)
An ERP system is a business management software that is implemented to improve the flow of data and to automate and facilitate business processes in the whole organization.
Do I need an ERP? At the most basic level, an ERP system consolidates and reconciles revenue, inventory, and customer data in one place, consequently improving productivity and analytics. There are, however, many more reasons why every retail company needs an ERP. If you want to ensure business growth, this is a software platform you need to look into.
A Cloud computing environment that combines on-premises and cloud-based services and applications.
Could the hybrid cloud benefit my business? Hybrid models are becoming increasingly popular. That’s unsurprising, as a hybrid strategy enables businesses to tailor their investments and technological architecture. choosing the mix of in-house and cloud-based applications that best fits their needs. In practice, a hybrid model enables you to maintain your previous tech investments, and a the same time try out new technology, staying flexible while keeping risks at a minimum.
Internet of Things (IoT)
The Internet of Things is a network formed by all the physical devices (items, vehicles, buildings, etc.) that can connect to the internet, and to each other, and exchange data thanks to their embedded sensors and software.
Why should I care? From wearable technology, such as smartwatches, to smart home appliances such as fridges and light bulbs, to connected t-shirts that monitor the heart rate, IoT-connected items are a profitable new market. But it’s in-store that IoT has made the biggest impact in retail, helping speed up queues, optimize replenishment, and generally transform the business. Think, for example, of smart shelves, which use weight sensors and RFID tags to alert store managers when products are running low or when an item has been misplaced, optimizing inventory and reducing the risk of out-of-stocks. Amazon Go’s cashless store uses IoT technology to make shopping seamless; sensors track what customers are buying, then tally up the items and detract the costs from the app. Other retailers have been using sensors in-store to check what products customers are looking at, where shoppers walk, what items they inspect or try on – but then do not buy. If you are looking into innovative ways to optimize the shopping experience and cut inefficiencies, you might want to look at the opportunities of smart technology.
An application of artificial intelligence that allows the software to learn from its experience without having to be programmed explicitly.
Does it matter to me? Machine Learning is changing retail. From optimizing product prices (think about Amazon’s or Uber’s dynamic pricing model) to forecasting sales, its applications in retail are endless. Perhaps the most popular, and profitable, use is through personalized product recommendations, with software suggesting consumer items that they might be interested in based on their, and other shoppers, previous purchases. Amazon reported that 35% of its revenue comes from recommendations made by machine learning algorithms. Other retailers have experienced similarly remarkable returns. And it’s not only e-commerce businesses that can benefit: software solutions like LS Recommend can be deployed across your physical stores, too, to help in-store employees deliver spot-on suggestions.
Mobile Point of Sale (mPOS)
A mobile, wireless device, usually a tablet or smartphone, that performs the functions of a traditional cash register or POS system.
Do I need it? With mobile POS, retailers can bring the Point of Sale to the consumer. This means faster service, shorter queues at the cash register and the ability to serve customers, show products not available in-store, and even close sales anywhere on the shop floor. Mobile POS has revolutionized the retail industry: according to Capterra’s “Research on mobile POS software systems used in the retail industry”, 62% of retail workers say mPOS has made their jobs easier – and over 25% of retail workers say that mPOS has increased the number of products that customers buy. If you are still keeping your sales staff stuck to the register, you should start looking into the benefits mobile POS can bring.
Point of Sale (POS) System
The combination of software and hardware that is used to manage sales, close transactions and simplify day-to-day retail operations. A good POS system replaces the traditional cash register, while also bringing much-needed extra functionality that goes beyond pure sales transactions.
Do I really need it? The right POS will improve your customer service, increase your speed and accuracy of service, and make your inventory, reporting and ordering more efficient. A modern POS system is not optional for retailers. Are you looking for a new POS system but not sure what features you should look for? LS Central gives a great overview of the key functionality needed.
An approach that provides customers with a seamless experience on all sales channels. This is achieved by retailers replacing all the separate, badly integrated software solutions and databases used across their business with just one, enterprise-wide platform.
Do I need it in my business? Unified Commerce software centralizes all data on products, offers, orders. consumer habits and preferences in one place. This enables retailers to easily oversee their information and to manage it in a uniform, consistent way across all of their sales channels. With Unified Commerce software, retailers can reduce complexity and errors, which leads to simpler, more effective decision-making. At the same time, they can use their knowledge of consumers to build more engaging and personalized customer interactions. An outstanding 81% of retailers say they plan to deploy Unified Commerce software within three tears, BRP Consulting reports. Unified Commerce is, arguably, the future of retail.
Virtual Reality (VR)
A 3D, computer-generated environment that can be interacted with, usually using special equipment such as a visor with a screen, or gloves fitted with sensors.
Do I need it? A few years ago, long-distance shopping through VR goggles seemed to be around the corner. Although the time of shoppable virtual stores hasn’t come yet, virtual reality is a very flexible technology, and forward-thinking retailers have found different ways to employ VR tools in the back office. Some of the uses we have seen include store design planning, shelf assortment, and product layout setup, staff training, and even 3D mapping of store analytics, as VR cab help better visualize the customer journey in every single location. Despite the multiple uses, VR is not yet a mainstream technology in retail.
Resource Credit | LS Retail