Technology changing the face of retailing

The ease of e-tailing means retailers need to make going into a store a rewarding experience. Picture / Herald on Sunday

Whether it's sourcing products, monitoring shoppers, processing sales or enticing customers back, retailers rely on a growing arsenal of technology to stay in business. Here are five technology trends that are changing the face of retailing.

RFID Radio frequency identification (RFID) is not a new technology - it has been around for 50 years - but it is an increasingly important tool for retailers and their suppliers. RFID tags are becoming compulsory accessories for a growing percentage of the pallets and cartons leaving manufacturing plants on their way to the store.

Mega-retailers like Wal-Mart are demanding their suppliers provide RFID-tagged products because of the huge savings that result from reduced paperwork and inventory losses as the goods make their way through the supply chain.

For all but the most expensive products, the cost of tagging each item is still prohibitive, but many retailers believe it is a question of when, not if, the proverbial can of baked beans gets its individual tag.

That in turn will lead to the development of "smart shelves" which can sense when goods are removed and send a message to store staff, perhaps via mobile phone, to alert them to the need to restack products.

Item-level tagging would also mean a quicker trip through the supermarket checkout because scanning a trolley's contents could be done instantaneously.

As well as keeping an eye on products, RFID can also be used to track customers within a retail environment.

Laxman Bhatia, an RFID specialist with global technology supplier BEA Systems, says he knows of one major Asian retailer using tags on shopping trolleys to track customer movements and work out which products are not selling as fast as anticipated. The store then uses that information to dispatch staff to the aisles to promote the products to shoppers.

Chains like McDonald's use mobile devices linked to their point-of-sale systems to cut waiting times at the till. When queues build up staff are sent to take orders down the line. Shoppers are given an order number and only have to complete payment when they get to the front of the queue.

Miles Bland, founder and technical director of retail technology company Triquestra says mobile devices used for queue busting can be designed to double as stocktaking tools. Staff can be assigned to stocktaking duty and switch to queue busting at peak times.

Mark McGeachen, sales director of AdvanceRetail, says customers' own mobile device use is also forcing retailers to lift their game. When a shopper can walk into a store and use their internet-enabled phone to compare prices with another store, it keeps sellers on their toes.

Computer manufacturer Dell builds computers for customers to order, adding a layer of complexity to its inventory management. Mike Gray, a supply chain specialist with Dell, says by implementing a comprehensive system to track components through the supply chain the company has been able to turn the shipping process into a "virtual warehouse".

"By having the visibility into the supply chain we're able to take a look at what our sales rates are and compare them to our in-bound supplies and know if we need to take action to either increase or decrease that supply."

That means inventory levels can be kept to a minimum, reducing costs, Gray says.

AdvanceRetail's Mark McGeachen says business gains can be made when retailers open up their supply chain tracking data to their suppliers, shipping companies and others who handle the goods.

"Every party that shares in that information can gain efficiencies and take time and cost out of the supply chain," McGeachen says.

The balance of power has shifted from the retailer to the consumer in a world were product and price comparisons are just a mouse click away. The ease of e-tailing means retailers need to make going into a physical store a rewarding experience.

Triquestra's Miles Bland says consumers familiar with shopping online are now also demanding a "certain continuity" of experience when they step into a store.

Stephan Spencer, founder of internet consultancy Netconcepts, says improving broadband uptake is making the online shopping experience richer because e-shoppers can view detailed displays of products.

The rise of "social media", especially blogging, has made and destroyed products. Manufacturers of niche items have found themselves propelled into the mainstream and inundated by orders as a result of a well-read blogger endorsing their product.

On the other hand large companies have suffered when blogs and websites have trashed their products.

Spencer says the best retailers are those that successfully integrate their real-world stores with their internet presence.

Dell's Mike Gray says his company is selling increasing numbers of large plasma and LCD screens to retailers who are using them as high-tech alternatives to promotional posters.

"Rather than go through the extended effort to create a sign and have it printed and shipped to the many different stores and posted, which takes a long time and a lot of effort, you can envisage a marketing organisation somewhere in a central headquarters group that pushes content out over a broadband application straight to the digital sign."

AdvanceRetail's Mark McGeachen says in-store kiosks, which can graphically demonstrate product ranges and process credit card transactions, are a technology that has promised a lot but is yet to reach its full potential. He believes that will change as consumers get comfortable with using them for tasks such as checking in for flight.

Andrew Mitchell, business director of promotional marketing consultancy Proximity Pulse, is enthusiastic about the potential of "m-coupons" - discount vouchers sent to shoppers' mobile phone when a store's technology detects that they (or their phone) are near the store.

Mitchell said: "That coupon can be in the form of a bar code that can be scanned as I go through the checkout to give me my discount.

"The ability to recognise customers as they come into a store really does add something to the environmental impact of that store."