Retail solutions 2007: technology update

Courtesy: www.talkingretail.com

A visit to Retail Solutions 2007 revealed retailers are moving away from cost-cutting solutions, as today's technologies are all about satisfying the multi-channel consumer. Anna Cureton takes a look at some of the latest technology solutions.

“It’s all about the customer,” declared Sarah Kellett, retail industry consultant, Fujitsu Services, reporting on the 2007 retail technology market. And Kellett is not alone in her verdict. It is now generally agreed that we have entered the retail technology era of ‘customer centricity’, and shoppers are driving a technology surge with demands for greater control and more interaction. Retailers are responding positively, by moving away from cost-cutting solutions and adopting technologies that drive costs.

According to Dr Mark Dorgan, European retail partner at Fujitsu Service, these modern, multi-channel consumers are more demanding than ever and retailers need to adopt multi-channel technologies to meet their expectations. “Multi-channel technologies, both inside and outside the store, are available and consumers are willing and eager to explore their benefits,” states Dorgan. “Retailers know they need to catch up in this rapidly evolving area – the time to act is now, because consumers demand it.”

However, if retailers can’t satisfy this multi-channel requirement, or they get it wrong, then they risks seriously damaging their brand identity. “A third of multi-channel shoppers have said that once they have had a problem in one channel they will not shop in any of that retailer’s channels again,” warns John Davison, MVP retail industries advisory at Gartner. As Davison looks forward a decade to 2017, when retailers will be selling to ‘digital natives’ who have always lived with technologies, he asks: “Are retailers ready for this transition?”

Shelf-edge – digital media and labeling

At the ‘Store of the Future’ exhibit in Retail Solutions 2007, Fujitsu Services was exhibiting the latest in shelf-edge technology. This included digital media network screens, which are positioned at eye-level on the shelf-edge. Bill Waterson, head of retail, Fujitsu Services, explained: “The nearer to the purchase the ad is, the more successful it is, so on the shelf-edge is the most powerful influence.” The moving picture screens have a much stronger impact, and can be used to cross-sell, provide additional product information and highlight promotions, or give a taster of what will be coming next.

This technology also has cost benefits says Waterson: “Previously the costs of this kind of technology have been much higher, for example with plasma screens. With shelf-edge screens the costs are decreased whilst the immediacy is increased.” This system is currently being trialled with United Co-operatives. Other shelf-edge screens were also exhibited but this time with non-moving pictures, as a means of labelling with more detailed product information. These screens are separately controlled but one central computer changes the display. The specialised batteries need to be replaced just once every five years, as they are only activated when the message needs to be changed.

The specialised batteries need to be replaced just once every five years, as they are only activated when the message needs to be changed.

Kiosks – personal assisted shopping

Also at the ‘Store of the Future’, Bill Waterson, Fujitsu Services, said the kiosks being exhibited were indicative of the “individualisation of the shopping experience”.

Waterson demonstrated a ‘loyalty kiosk’, which can be activated by fingerprint or palm biometric triggers, which allows consumers to view general store promotions, and more personalised promotions based on their shopping history. Coupons can then be printed to be redeemed in-store that day.

Waterson also revealed a ‘personal assisted shopping kiosk’ which customers can use to receive promotions via their mobile phones.

“There is 100% mobile phone penetration in the UK according to 2005 stats,” said Sarah Kellett, retail industry consultant, Fujitsu Services. Mobile phone technology has been around a while but, according to Kellett; “it is getting some traction now.”

“It is instant, cheap, personalised and ethical,” she continued. Customers can search or browse the store’s on-line catalogue and find out information on ingredients, dietary information or manufacturer. Barcodes for particular products and promotions can then be sent straight to their mobile phone, and this is then taken for redemption at point of sale. According to Fujitsu, this technology has the benefit of being both a ‘pull’ and a ‘push’ mechanism: retailers can text customers with promotions, and customers can also text to receive special offers.

PCMS’s ‘BeanStore’ POS solution

Marks & SpencER will be taking 15,000 of PCMS’s BeanStore POS terminals by the end of 2008, revealed Paul Kaye, head of architecture & design at PCMS. This Java-based software offers a complete POS solution, informing the user about stock control and linking in with back office controls. Kaye also explained how this solution is truly “chameleonic” and “runs in grocery, general merchandising and catering.” As Kaye pointed out, this is a good match for M&S’s varied product offering, particularly with some stores now launching with in-store restaurants. Kaye also highlighted the benefits of Beanstore’s centralising server facility: “All transactions are central; the barcode on the receipt creates a higher level for checking refunds.”

There is also the possibility of installing two screens at the paypoint. “The customers can see the products they are buying and marketing can also be placed here. Of course the costs of implementation need to be justified,” said Kaye.

There are benefits for forecourt retailers where space is more limited: PCMS’s pay points can take payment for both store goods and petrol.

Hand Held Products – 2D image scanners

Tackling the demands of time-poor shoppers, Alasdair Chambers, enterprise account manager for Hand Held Products, described how the 4600r 2D imager makes scanning so much more efficient. “A scanner needs to work every time but poor light or a broken barcode can effect a laser scanner. The 4600r does not use a laser, which can be broken, but captures an image,” said Chambers.

The image scanner will work for 11 years, according to Chambers, and so requires significantly less remedial work than a laser scanner, which needs maintenance roughly every 18 months. Chambers said the engine inside the scanner has no moving parts and so it is much more robust and will still work even if dropped. The POS technology also collects data on the readability of barcodes, allowing retailers to penalise suppliers whose barcodes are consistently malfunctioning, and are consequently impairing the speed of service to the customer.

BT and Retalix’s one-stop-shop solution

BT has recently teamed up with leading retail technology supplier Retalix, and at the beginning of last month (June) they launched a one-stop-shop technology solution created specifically for the grocery sector.

BT Expedite’s chief executive Helen Slaven told Checkout BT sees itself as a “specialist solutions integrator”, meaning it chooses and integrates best of breed solutions and so cuts out the demands of managing multiple supplier relationships. “We care about the risk and price point on behalf of the retailer,” said Slaven.

Retalix’s suite of products includes POS, back office, loyalty, self-checkout, wireless mobile solutions and in-store kiosks, and clients include Tesco and Sainsbury’s. Simon Jones, sales director of Retalix UK, explained that using such a complete solution has cross-promotional advantages, and creates more consistent service, creating cost savings, including staff training reductions.

“With one manager of the software (Retalix) and one manager of the hardware (BT) working in partnership, the customer has one vendor. This reduces risk, confusion and complexity,” added Jones.
Another advantage of this offering is its scalability. “This will scale down for convenience too. We can deal with the biggest hypermarket retailers to convenience store businesses with just two stores,” said Jones.

Gift card centre solutions: a turnkey service

“Our gift card centre offering is very different as it involves a wide range of retailer’s gift cards (third party retailers), being sold side by side within another retail outlet such as Sainsbury’s (the destination retailer),” said Les Lowin, managing director of inComm Europe, the world’s leading supplier of gift card centre solutions.

InComm has worked with technology enabler The Logic Group to provide a complete turnkey service. It supplies the free-standing fixture and the cards, and the fully integrated ‘Vanilla’ solution manages the integration process and enables cards to be redeemed through a variety of locations and technologies.

The system tracks and monitors sales, and will log where and when a card is redeemed. “This gives us and the retailers valuable insights into purchasing patterns and demographics,” said Lowin.

Those who have concerns about directing purchases away from their business need not worry. “Shoppers buying gift cards will make other purchases too and, if gift buying is easy, it will encourage regular visits. In addition, gift card schemes are proven to increase value of customer spend by up to 20%,” revealed Lowen.
And the future of gift carding looks rosy. “UK gift cards are set to account for 2.1bn in 2007,“ reported Lowen.

Contactless payment – Visa payWave

Contactless is the new Chip and PIN, and from autumn 2007 around 200,000 consumers and 2,000 retailers will be using Visa’s payWave in some of the busiest commuter areas in London.

Contactless payment uses short range wireless technology to allow customers to pay for transactions of less than 10 by simply waving their enabled credit card in front of a reader.

“This technology offers speedy convenience for people with busy lives, such as commuters who want to buy a quick coffee and newspaper. PayWave significantly speeds up payment as consumers don’t have to fumble around for coins,” said Sandra Alzetta, head of innovation and acceptance for Visa Europe.

It is also the perfect fit for convenience stores, according to Alzetta. “For some retailers speed of payment really matters, for example convenience stores. If they can take payment more quickly, footfall increases, which in turn increases revenue. This system also gets cash out of the till,” said Alzetta.

Other retailer benefits include an increase in spend, as Visa’s research in the US suggests consumers using this type of payment will spend an average of 22% more than those using cash. The reader is added to existing chip and pin terminals, or an integrated reader and chip and pin terminal is also available.

“Security is always at the top of our minds,” said Alzetta. “This uses Chip and PIN and all the standard technology already in place, but it is next generation which includes next generation security.” Issuing banks will set up a pin number prompt as a safety net, which will mean periodically customers will be required to enter their pin. Visa plans to roll out payWave across the whole of London at the end of 2007 or the beginning of 2008 and then the technology will be widened out across the UK.

Motorola’s portable shopping systems

“Self-scanning has gone from being a niche technology to being much more widely deployed. Consumers have come to expect this, and the new MC17 mobile computer will accelerate this,” said Alex Price, retail director of Motorola’s Enterprise Mobility Business, commenting on the latest portable shopping system from Motorola. With this technology, just launched at the beginning of last month (June), customers swipe their loyalty cards and can then scan as they shop, bagging at the same time and leaving only the payment to be made before leaving the store. This new model has a 2.8 inch colour screen and allows targeted marketing messages to be sent directly to the consumer as they shop. Shoppers will also be able to locate items, check pricing and source complementary products. The system also services store employees who can access applications for inventory management, price verification and line busting. Price states this is perfect for grocery shopping and will really improve customer loyalty through empowering the customer. “Retailers will be able to use the information to speak to me as a customer, taking my personal tastes into consideration,” said Price.

‘Remember markdown’ says Oracle

“Don’t just focus on the end life-cycle of a product, remember markdown,” advised Sarah Taylor, retail industry director at Oracle. Oracle’s most recent markdown launch is its Retail Promotion Planning and Optimisation application. Based on powerful data mining technology this ensures retailers are making the most out of the high level of investment poured into marketing and promotion.

According to Oracle, it is the “first retail application that combines planning, forecasting and analytics to provide promotional intelligence for driving higher returns on advertising and inventory investments”.
“This solution helps in the planning stage, allowing retailers to think what markdowns will look like throughout the life-cycle, so they will hit on the percentage markdown they want to achieve, reduce less and improve clearance,” explained Taylor.

The application creates a centralised process and features a graphical user interface to simplify planning and a centralised calendar view which can support product images for promotional use.

Supply chain – a change in focus

“Some retailers have set high ethical targets but have no idea how to back these up. Previously the pressure was on the costs of getting produce to the store, now the pressure is on being ethical,” said Mark Croxton, managing director of Aldata Solution UK, which provides supply chain management and in-store solutions to retail goliaths such as Carrefour. Croxton reported that current consumer appetite for fresher products has only increased this pressure. “As retailers are getting a fresher offering, transport demands are becoming greater, they need to make fewer journeys and ensure every truck goes out full,” explained Croxton. “Supply chains need to be developed around optimizing replenishment, cutting waste, controlling packaging and assets through track and trace and transport optimisation.”

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Courtesy: www.talkingretail.com