BrainTrust Query: 2011 Predictions for Retail Technology

Jan 03, 2011

Commentary by David Dorf, Director of Technology Strategy, Oracle Retail

a special arrangement, presented here for discussion is an excerpt from a current
article from Insight-Driven Retailing Blog.

I don’t have any bold predictions
for 2011 as I believe the new year will be marked by the maturation of several
technologies instead of brand new things we’ve not seen before.

Here are six
areas to watch in 2011:

1. Alternate Payments: We’ve seen several alternate payment schemes
emerge over the last two years and 2011 may be the year one of them takes hold.
Any competition that can drive down fees will be good for everyone. I’m betting
that Apple will add NFC chips to their next version of the iPhone, then enable
payments in stores using iTunes accounts on the backend. PayPal will continue
to make inroads, and Isis will announce a pilot.

2. Engineered Systems: The industry is moving toward purpose-built
appliances that are optimized across the entire stack. Oracle calls these “engineered
systems” and the first two examples are Exadata and Exalogic, but there
are other examples from other vendors. These are particularly important to
the retail industry because of the volume of data that must be processed. There
should be continued adoption in 2011.

3. Social Analytics: There are lots of tools that provide insight into
how a brand is perceived across popular internet sites, but as far as I know,
these tools are not industry specific. The next step needs to mine the data
and determine how it should influence retail operations. The data needs to
help retailers determine how they create promotions, which products to stock,
and how to keep consumers engaged. Social data alone does not provide the answers,
but it’s one more data point that will help retailers make better decisions.
Look for some vendor consolidation to help make this happen.

4. 2-D Barcodes: Look for more QRCodes on shelf-tags, in newspaper
circulars, and on billboards. It’s a great portal from the physical world into
the digital one that buys us time until augmented reality matures further.
Nobody wants to type “www”, backslash, and “.com” on their

5. In the words of Microsoft, “To the Cloud!”: My favorite “cloud
application” is Evernote. If you take notes on your work laptop, you will
inevitably need those notes on your home PC. And if you manage to solve that
problem, you’ll need to access them from your mobile phone. Evernote stores
your notes in the cloud and provides easy ways to access them. Being able to
access a service from anywhere and not having to worry about backups, upgrades,
etc. is great. Retailers will start to rely on cloud services, both public
and private, in the coming year.

6. F-Commerce: Move over “E” and “M” so we can introduce “F-Commerce,” which
should go mainstream in 2011. Already several retailers have created small
stores on Facebook, and it won’t be long before Facebook becomes a full-fledged
channel in the omni-channel world of retail. The battle between Facebook and
Google will heat up over retail, where both stand to make lots of money.

Discussion Questions: Which of the retail technology predictions mentioned
in the article will gain momentum in 2011? Which seem to be a few years off?
Are there others you would add?

Please practice The RetailWire Golden Rule when submitting your comments.

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20 Comments on "BrainTrust Query: 2011 Predictions for Retail Technology"

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Ian Percy
11 years 4 months ago

And if you have any time left over from installing and learning all this remarkable technology, I’ve got another idea for 2011: Get out on the floor, meet the nice customers and SELL SOMETHING!

Paula Rosenblum
11 years 4 months ago

It’s pretty close to a dead heat between social analytics and Fcommerce, but knowing retailers as I do, they’ll drown in the detail data generated by social networks for a while, and prioritize “FCommerce” first.

At the end of the day, retailers live to sell. Brand-building is important, and “divining demand” is a Holy Grail…but the first rule seems to be “sell something.”

As an aside, I was helping a friend set up a Facebook fan page and was really shocked to see all the shopping cart apps already out there. This may give independent local retailers a leg up on the competition. No muss, no fuss…local fans, local selling.

Joel Rubinson
11 years 4 months ago

These are all good points. In general, mobile will be the big thing and QR codes, mobile payment apps, etc. all fall under that tent.

The point about cloud computing is that it is huge but also transparent to most. For example, many or all of the analytics and data intensive behavioral targeting advertising networks use cloud computing and could not offer their services without it. The same is probably true for location aware services, but I’m not as familiar with their architectures.

Peter Fader
11 years 4 months ago

Most of these technologies fall into the “nice to have but not necessary” category. Some consumers might explore them once or twice but most will wait for years before jumping on the bandwagon (if at all). But the big one that can really change the retail shopping experience is mobile payment. It is easier to reach for the phone instead of fumbling around for a credit card, and it can simultaneously cover other related behaviors as well (e.g., getting loyalty program points).

I’m still pretty conservative about the actual diffusion of this technology–it won’t exactly be an explosion in 2011. But we will see greater and more meaningful penetration of mobile payments than we will for the other retail technologies that folks are speculating about.

Max Goldberg
11 years 4 months ago

I look for the continued growth of smart phones to have the greatest impact on retailing in 2011. Whether it’s instant price comparisons, alternative payments, or social shopping, all rely on consumers using smart phones. With a smart phone and a data plan, consumers can better control the shopping experience, causing retailers to fall back on an evergreen practice called customer service to differentiate themselves from the competition.

Mark Johnson
Mark Johnson
11 years 4 months ago

The “rapid” adoption of mobile and other technologies will be slow to come into fruition. We will see more analytic based applications first. Mobile is still much slower to adopt than the providers would like. It is also challenged in proving the sustainable ROI.

The key in 2011 will be to offer the communication in the form, factor, and to the interest of the respective audience.

Bernice Hurst
11 years 4 months ago

On the other hand, one British paper looked at technology that was forecast last year to take off this year but may not actually live up to those predictions – The much-hyped tech trends that won’t take place in 2011….

Doug Fleener
11 years 4 months ago

Thanks for some great insight David. I think we’ll also see more in-store technology to improve the customer and staff experience.

I hope more retailers will see how technology can enable the staff rather than thinking we should replace them. As an example, the iPad offers an incredible opportunity to put more information and tools directly into the employee’s hands.

Paul R. Schottmiller
Paul R. Schottmiller
11 years 4 months ago

Continued channel convergence with heavy emphasis on the virtual impacting the physical. The amount of pure eCommerce will continue to grow at low double digit rates but its real span of influence in the shopping process will be much greater. Lots more innovation in front of us (than behind) at the intersection of social networks and their mobile technologies.

Innovation–pace and investment–will continue to challenge the economics of the traditional bricks and clicks.

Ryan Mathews
11 years 4 months ago

Put me in the camp that doesn’t expect to be buried under a retail technology tsunami in 2011.

I do agree with Peter and Max that if anything will move rapidly it will be in the area of payment (to paraphrase Willie Sutton — that’s where the money is).

I also think Max is right about telephony. Consumer use of “apps” is likely to advance faster than retailers’ use of technology this year.

Bob Phibbs
11 years 4 months ago

The more the ‘net is brought into bricks and mortar, the more the store will be a showroom for others’ products.

Chuck Palmer
11 years 4 months ago

One of the key principles of consumer centricity is knowing the customers’ story–that is, being where they are when they are. In this case, I think Social Analytics and Facebook is going to see a great deal of activity.

As mentioned above, Facebook is a great equalizer, and perhaps even more effective for the savvy local retailer. The independents aren’t doing as much F-Commerce yet, but they will. The big brands are studying what the independents are doing and learning how to localize and find their best customers without the tyranny of geography or even retailers.

New channels indeed.

Bill Hanifin
11 years 4 months ago

A convergence of the alternate payment and F-Commerce trend might be the one that has greatest impact. The emergence of FB credits as a vehicle for commerce has promise as long as FB properly manages its version of a transaction fee.

Overall, I have a sense that retailers need to give attention to the basics more than ever, so while lots of technology offer promise, they may be viewed as distractions that can wait until business gets going with more strength and momentum.

Liz Crawford
11 years 4 months ago

I agree with Max–smartphones will revolutionize shopper marketing in 2011. The ubiquity, mobility and increasingly useful apps are paving the way for a real transformation. What will shoppers do with their mobiles? Seek reviews, pricing information, inventory availability in store, and shipping information. They will also seek input from their social network on higher-ticket, higher-involvement items.

John Lofstock
John Lofstock
11 years 4 months ago

We are just seeing the tip of the iceberg regarding the reach of social media and social analytics. With so many people dependent on smartphones and PDAs, retailers have the ability to reach consumers in real time to drive business.

It’s a powerful sales tool that is influencing where consumers shop. For example, multiple convenience store companies were tweeting (and emailing) that they were offering free coffee on Christmas Eve and New Year’s Eve, and they did it throughout the evening. This not only diverted customers to the store, but got them to fill-up, buy a sandwich, a soda and a bag of chips.

Ten years ago this opportunity did not exist. Nowadays, they are emailing coupons where the bar code can be scanned right off the smartphone. It’s not only good business it’s what their customers want.

Michael L. Howatt
Michael L. Howatt
11 years 4 months ago

The only technologies that will take off in 2011 will be those that make it easier for the shopper to get what they want hassle free. Smart phones will lead the way. Technology for retailers will find the usual barriers to success–they won’t want to pay for them.

Mark Burr
11 years 4 months ago

Predictions are usually just that–predictions. Maybe they are dreams. Maybe they are fantasy. Some but few have any basis in fact or connection to reality. It’s sort of like the budgeting process. You have to have one, but it never turns out as it was expected or exactly as hoped. Does it?

Retailing will remain retailing. Lazy executives will continue to seek a technological silver bullet from their cronies known as ‘consultants’. They’ll continue to hope that some ‘application’ will magically begin to drive customers to their doors regardless of experience or products provided.

One of the best ones yet to be developed, of course, would be an electric shock treatment that induces retail management to get out on the floor to greet, sell, and thank their customers. It would be one of the greatest technological breakthroughs since–hmmm, maybe sliced bread? It might even surpass the automatic door.

George Whalin
George Whalin
11 years 4 months ago

I wonder what a retailer thinks when customers walk into their stores and scan the QR code on an item and walk out of the store to buy the item from another store or online merchant.

This technology may be good for shoppers who only care about price. And it may be good for manufacturers but is it good for most retailers? It may be good for Walmart, Costco and retailers that exclusively sell their own branded merchandise. But what about the many retailers that don’t fit into these categories? This may be one of those technologies that could very well mean that many retailers will lose sales and possibly go out of business as margins fall by trying to compete on price!

Are retailers ready to embrace this technology?

Herb Sorensen, Ph.D.
11 years 4 months ago

I am favoring the Facebook technology as having the greatest impact on retail this year, primarily because it spans (participates) in the Convergence-of-Online, Mobile and Bricks-and-mortar (COMB) retailing.

Of course electronic payment with SmartPhones similarly spans all channels where personal identity linked to payment or passage is important. Many of us already use our phones as boarding passes at the airlines. Why not all the other places where scanners are or can be readily deployed?

I expect their to be a torrent of change this year, not just creep, creep, creep evolution.

Cathy Hotka
11 years 4 months ago

CIOs are talking about several things:
* social media strategy;
* item-level RFID; and
* mobile everything.

The IT department doesn’t get enough respect in the retail industry, but don’t yet count out the CIO as the person who can establish IT strategy.


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