What Is Retail Technology

Point of Sale (POS) systems

Retail point of sale (POS) used to be simple: A cash register. Now the POS game is more focused on the complete journey of tracking and understanding the touchpoints from online through in-store, to identify where key moments that influence a decision to purchase are OR where a potential unseen roadblock might be, causing a missed sale or service opportunity.

Associates armed with handheld devices can meander about the store, interact with customers, look up items, and complete sales on the spot. 

These innovations include:

• Untethered POS systems: Handheld devices, such as a phone or tablet, mean associates can interact with customers anywhere inside or even outside the store. Further, these are less costly implementations vs installing new autonomous check-out devices.
• Mobile POS systems: These can take orders in store, curbside or at off-site locations and sync with your main store.
• Omnichannel POS: These allow customers to start a basket online and complete their order in store and vice versa (Square POS & Shopify POS).
• Digital/mobile wallet payments: Examples include Apple Pay, Google Wallet, Venmo, PayPal, CashApp, etc.
• Scan & Go/saved payment source: Whether it’s the “Amazon Go” model or retailers that allow customers to connect an app to a saved payment source, innovation means removing friction – even check out. These make it seamless for customers who shop via your e-Commerce platform and in-store.
• Alternative payment methods: These include “Buy Now Pickup Later” (BNPL) & Installment options.
• Delivery personalization: POS data helps optimize the shopping experience for repeat customers and loyalty programs, and not only for how or where they want deliveries. Data collection during delivery interactions – at home or in-person – provide more opportunities for personalization and recommendations.

Adoption of these various path-to-purchase methods was built upon knowing your customers and providing the most frictionless experience possible wherever they were completing the purchase. Now, these systems can provide touchpoints for retailer/employee “intervention” to answer questions or act as a knowledgeable consultant to enhance the customer’s experience – anywhere they interact.

Inventory management systems

Inventory management systems should lead to a seamless connection between products and the customers that need them. Using automated tools to manage inventory help with reduced shrink, make it easy for customers and employees to find what they are looking for, and can even assist employees keeping products on the shelves via reporting and notifications. Ultimately, managing inventory with digital tools and services gives time back to both employees and customers while providing the retailers with a more accurate view of the products in their portfolio, at any level.

Integrated warehouse management, point of sale and inventory management systems should deliver the connected, seamless experience customers expect no matter where they make their purchase.

In-store, inventory management systems have many different forms, depending on where a retailer might be in their digital maturity. These systems can be powered by digital shelves and/or camera technology that can send real-time alerts to store associates to pull inventory from overstock locations and replenish the shelves. There are also location-based, RFID or QR code systems that identify specific locations where those products are overstocked and give notifications when there’s an opportunity to restock.

Such reporting features allow greater visibility for the upkeep of the department’s inventory levels, as well as the management and reporting on the productivity of the store’s staff. It is also key to understanding and correlating to appropriate staffing levels at key points throughout the day where restock trends peak, meaning customer activity is also high.

Many retailers also are embracing AI inventory predictive systems that use unstructured data to recognize patterns and interdependencies to predict consumer behavior. This helps in initiating order fulfillment before the order happens.

This journey to improve the inventory management process begins at distribution centers long before products are shipped to the stores.   AI is being used to help warehouse robots in these centers learn to safely, securely, and efficiently improve their movements to better handle merchandise from one point to the next.

Not all retailers or stores need real-time inventory management systems. For example, experiential retailers with concept stores that chiefly serve as celebrations and expressions of a specific brand. They seek in-store brand connection while presenting products that can be ordered and delivered.

Customer relationship management (CRM)

Recent innovations in CRM can lead to better customer experiences and connections with your brand, leading to increased loyalty and retention. It’s simple: A tool that improves customer relations will improve your bottom line.

These tools include:

• Artificial intelligence (AI): AI and machine learning can be used to store, read and analyze customer data in one location. This data shows how customers engage your business and products and how ensuing communication and purchases – or not – transpired. This provides information that can power personalized messaging, product recommendations, reduce cycle time to next purchase, incent loyalty and decrease cart abandonment, which leads to increased sales and average order value as well as repeat business.
  
  
• Chat & email bots, Internet of Things (IoT): Utilizing Chatbots to engage customers and resolve challenges during the purchase process reduces labor cost and increases customer satisfaction. These tools allow for a greater connection between the customer and brand by quickly providing resolution leading to increased loyalty and repeat purchase. The data gathered during these customer interactions should be mined to identify ways to improve the customer experience and purchase path. Integrating IoT and CRM data allows for better management of the customer journey across all digital touchpoints/devices.
  
  
• Conversational/Voice platforms: Tapping into the data that is collected by voice search assistants such as Siri, Alexa and Google Voice allow your business to identify trends in your customer buying journey and how easy or hard you are to purchase from. Understanding how to weaponize trends in voice search can improve your inventory assortment/management, delivery methods, purchase paths and customer loyalty.
  
  
• Social Media CRM integration: Customers want to communicate with brands, and often the outreach – good or bad – is through social media. Having a robust social media strategy that utilizes the data captured by your CRM offers an opportunity to optimize the shopping experience for your customers across social platforms with the ability to tie it to the in-store experience and to your website shopping experience. Customers expect a seamless integration of their data across all their purchase opportunities and social is often the place they start.
  
  
• Business process automation: CRM systems can seamlessly connect various business interactions and processes without associate intervention ensuring sales, customer and inventory data are properly routed and organized.
  
  
• Self service via CRM: Your CRM systems should offer customers easy routes to find information, get questions answered and problem solve without needing interaction with a live associate. This can be online, through an app or in-store.
  
  

While some customers – and retailers – feel reluctance or even skepticism about the intersection of CRM and privacy/data collection, know that it’s a rapidly growing source or revenue for all kinds of businesses. In fact, CRM is the fastest growing enterprise application software category, with spending expected to reach “$163.16 billion by 2030 with a significant CAGR of 13.9% from 2023 to 2030,” according to Grand View Research. 

It's part of the game now, and those who don’t invest will get left behind.

Marketing automation

Marketing automation technology represents a step forward in CRM, one that optimizes marketing campaigns across all your channels, targeting customers with automated messages from email, web, app, text and social.

Consumers willingly provide their personal information if the value exchange makes sense. PWC recently reported that 82% of consumers are willing to share some of their personal information to receive better and more personalized customer experiences. 

Key innovations with marketing automation include:

• Zero-party data collection: This is data that a customer intentionally provides to brands in order to improve the brand/customer engagement, improve personalization and the customer experience. It is imperative for retail marketers to improve zero-party data collection in the age of GDPR, CCPA and no third-party tracking because of consumer privacy concerns.
• Video: Video is the medium of choice for most customers, whether it reaches them through live streams of product drops or demonstrations or YouTube. According to Statista, as of June 2022, more than 500 hours of video were uploaded to YouTube every minute. This equates to approximately 30,000 hours of newly uploaded content per hour. The amount of content on YouTube has increased dramatically as consumer’s appetites for online video has grown. Marketing video outreach that is targeted, personalized and engages customers strategically is fundamental to the retail ecosystem.
• Influencers: Social media influencers attract eyeballs, particularly younger ones, often through values-based marketing. Influencers celebrating your products and customer experience help brands connect and engage customers. Influencers also provide a sense of belonging, social intimacy, familiarity and brand loyalty to consumers.
• Behavioral Analytics: Behavioral analytics provide data and insight into the behavior of consumers not only in stores and on eCommerce platforms but also with online games, web and mobile applications and IoT use. Leveraging behavioral analytics can drive hyper personalization and help brands gain a deeper understanding of customers’ interests, pain points and motivations for future actions.
• AI & ML: AI and ML can be used to optimize segmentation, personalization, customer interaction (chatbots) and content marketing (strategy, content creation & research) providing relevant engagement for your customers.
• Content development: Content that inspires consumption and engagement can become a path to purchase on non-traditional platforms, such as the Metaverse, Roblox, TikTok, etc., particularly to attract a younger generation of consumers.

Ecommerce platforms

Your ecommerce platforms are more than your online stores. They are the new brand storefront, just online, covering all merchant and customer touchpoints. As innovation continues ecommerce platforms are incorporating AI and machine learning to provide more robust, relevant consumer experiences.

Retailers need a cohesive, connected strategy to meet consumers wherever they begin their purchase journey. Whether that’s mobile-first commerce or purchases that begin via voice search on at-home speakers or phone assistants. It may be social media activities that are driving ecommerce retail behavior, such as TikTok as a brand discovery vehicle and purchase driver.

Some brands are rethinking their positions on third-party sites, such as Amazon, and going for direct-to-consumer models that allow them to customize their brand’s online experience, driving better value and customer loyalty.

Livestream shopping has exploded as an engagement and conversion vehicle for many ecommerce retailers. Connecting in real time and having authentic exchanges with consumers has been steadily gaining steam in the U.S. on Facebook Live, YouTube and Instagram Live and brands DTC sites. It combines a social aspect with product promotion and instant purchasing for a participating live audience. It also can boost brand excitement with exclusive live offerings of limited quantity specialty products or new launches.

Augmented reality can enhance shopping experiences both in-store and online, offering unique immersive experiences, such as digital try-on mirrors or virtual experiences in which consumers can see a product in their home environments. A person could go from a shoppable video ad to - with one click - getting measured for or trying on a new outfit or seeing how a new sofa looks in their living room.

Finally, location-based marketing allows brands to zero in on their target audiences within a proximity of their physical stores and send them personalized offers. Brands are using geotargeting, geofencing, beaconing and mobile targeting for customers who might find it easier to visit a store for a special deal when it’s just around the corner.

The future of Retail Technology

Retailers will continue to increase their use of cutting-edge retail technology, both in terms of full adoption and experimentation. The key is being purposeful and strategic throughout the process and collecting customer data at every point. Analysis of the data is the key to unlocking the experience that your customers demand.

AI and machine learning can be used to collect, store and analyze customer data in one location. The data can then be analyzed to demonstrate customer touchpoints and engagement with your business and products. The data will also reveal the path to purchase or where the customer abandoned the process. This provides valuable, actionable information to brands to adjust the purchase journey, personalize messaging, add recommendations and reengage customers, which leads to increased sales and average order value as well as repeat business.

Augmented reality (AR) and virtual reality (VR) can enhance the shopping experience and make it more immersive while allowing customers to visualize products in different settings or try them on virtually, such as clothing or seeing how furniture would look in their homes before they buy.

Virtual fitting rooms using RFID technology can scan products in hand, while the livestream camera overlays it onto a shopper’s body. No changing clothes necessary. These AR interactions have a 94% higher conversion rate than standard rates.

The Metaverse, while still in its early stages of revenue-generating development, provides a new opportunity for branding and connecting with customers, particularly younger ones. Brands will collaborate in the Metaverse, too, creating mutually beneficial partnerships.

Twinning – buying something for your avatar in the metaverse and buying the same item for yourself in the physical world – is increasing in popularity. More brands will offer NFTs, such as Macy’s did during a virtual Thanksgiving parade. This is another opportunity to authentically connect with customers virtually and engage them in content.

The Internet of Things (IoT) offers a diversity of possibilities, from smart window displays to in-store queuing and notification of special offers – all using QR codes. Digital price tags and RFID systems connect inventory management systems that enable flexible pricing based on inventory levels. Customers can skip checkout, as a RFID scanner feeds back through to a payment system for a shopper to pay upon exit. All of this made possible through retail technology.

AI and machine learning can support AR, VR, IoT and the Metaverse, reading and analyzing customer data and measuring engagement while also revealing new and perhaps unexpected friction and pain points. And, of course, all this data provides routes to improved personalization as customers’ habits evolve in relation to new technology.

Predictions for the future of Retail Technology

Retailers – or any brand with a physical environment – need to proceed thoughtfully into evolving and expanding retail technologies – from CRM systems to the Metaverse.

Consider the Metaverse. Everything in real life - IRL - will eventually be recreated in the Metaverse. And it won’t be an exact replica since these virtual worlds aren’t bound by permits, queues, parking and other inconveniences from the physical world. To succeed, brands should use this opportunity to create something new with a tailored, virtual experience. Brands will continue to explore and push boundaries in the Metaverse.

NFTs will provide an opportunity to own something unique from a brand virtually while also twinning that unique product in the physical world. Brands with loyal consumers will recognize additional revenue opportunities and brand expansion through these virtual channels. NFTs represent another channel for visual storytelling and brand connection, not just transaction.

While NFTs create digital scarcity they also create deeper brand connection. Virtual goods will continue to expand particularly as it relates to in-game experiences for younger audiences. These audiences will also want an exclusive physical representation of the product.

Less mind bending: Smart checkout will continue to advance as consumers will not tolerate long queues. Being able to simply place items in the checkout tray in the touchless checkout system and have everything ring up instantly via the use of cameras and AI is one trend of smart checkout that is likely to grow. Scan and go with your mobile device is another, while fully tech-enabled smart stores that allow you to select your items and leave is another.

Retail tech will continue to push store operations toward greater efficiency, better employee management, increased inventory management and connected systems that better serve those operating the store.

Preparing for the future of Retail Technology

Savvy retailers will outshine their competition when they purposefully integrate technology into their store design, incorporating new paths to purchase and customer touchpoints and personalization with improved convenience and customer experience.

It’s also valuable to understand that tech-enabled immersive experiences also can bolster quicker purchase decisioning, such as using AR to make a virtual sofa appear in your living room. The experience delights the customer while providing a convenient shopping experience and product options not available in store – red sofa instead of black – as well as delivery options.

Ultimately, retail technology represents the competitive reality of retail – it’s constantly evolving, though sometimes not in predictable ways. Customers don’t adopt. And then they do. BOPIS is an afterthought... then a pandemic arrives. New systems are challenging for associates... until, a week later, they find their job easier and more fulfilling.

For Miller Zell, retail technology is not much different from what we’ve provided clients for nearly 60 years: purposeful and focused solutions. It’s about helping our clients to develop the best possible customer experience in their branded environments.