In January, I wrote an article titled 2018 Emerging Trends in Cyber Risk for Retail. Many of my former colleagues reached out and asked if I would be writing something related to general retail technology trends as well. Your wish is my command: Here are some of my 2018 retail predictions.
1. We haven’t found the floor yet. Sales will continue to decrease for some time. No, retail is not dead; we are in an extreme evolution stage. I believe you will continue to see store closures, restructures, rebranding, and reduced footprint in brick-and-mortar retail. To deal with this, the traditional retailers need continue to focus on customer experience.
2. Online retailers will partner with brick-and-mortar stores. As true e-commerce retailers grow, you will continue to see sometimes strange partnerships emerging. Recently, you probably read about the Kohl’s-Amazon partnership, as well as the Kohl’s-Aldi pairing. Both partnerships are somewhat nontraditional and show the need for e-commerce, brick-and-mortar, and other stores to combine forces to manage customer demand, enhance customer experience and reduce loss.
3. The Internet of Things is here. We will see a much higher level of technology interaction in the stores. The key question here is will that lead to increased sales and a better customer experience?
4. Biometrics in retail will become more prevalent. We should see an increased use of biometrics both on the backend and customer-facing sides. Apple’s iPhone X usage of facial recognition will help the consumer population become more comfortable with the technology, thus allowing retailers to use similar technology more openly. Additionally, facial recognition, fingerprint scanners, gait analytics and advanced video analytics will become more widely used.
5. Wider adoption of RFID. This year we should see some larger penetrations of RFID usage and adoption. The technology has been proven and the costs have come down. In the omni-channel environment the need is increasing for inventory accuracy to improve customer experience.
6. The returns problem becomes front of mind. 2018 is the year were retailers will tackle the ever-rising returns problem. As data analytics and artificial intelligence become more readily available, more retailers will turn to advanced returns management to help control the loss.
7. The gap between entertainment and shopping will narrow. Destination shopping: buy a shirt, grab a bite to eat, hang out in a lounge. We will see more shared or combined spaces where restaurant, coffee shops and lounges will be peppered into traditional retail establishments. As customers look for different experiences this will be the differentiator for some.
8. More targeted marketing using technology. The use of Bluetooth beacons, facial recognition and data analytics will increase to help deliver targeted offerings to loyal shoppers.
9. The rebirth of brands. We will see some retailers come back from the dead. Brands that closed or filed for bankruptcy several years ago will resurface with a focus on smaller footprint stores and customer experience. We may also see the death of some other giants and hope one day they are reborn as well.
10. Self-service shopping. There will be an increase in self-checkout in non-traditional environments. You will see more scan-and-pay options using smartphones. A lot of these self-service shopping initiatives are tests to see how the customer reacts rather than cost-cutting experiments.
As retail continues to evolve we must remind ourselves not to fear the evolution but to embrace it. Technology is not here to eliminate us; it’s here to make our jobs and lives easier. Focus all your programs on the customer experience, and customers will shop. I hope the rest of 2018 is an outstanding year for you.
Tom’s column regularly appears on every issue of LP Magazine. To subscribe to the printed version of the magazine and enjoy other great content visit losspreventionmedia.com