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National Retail Federation, 2011: Retail Technologies

Retail technologies at forefront of NRF convention

By By Michelle Hammond
Thursday, 20 January 2011

Small retailers are set to be the major beneficiaries of a range of technologies highlighted at the National Retail Federation’s annual convention, held recently in New York.


Michael Baker, former director of research at the International Council of Shopping Centre, says some of the technologies are designed to manage costs and drive top-line growth, thereby “transforming the way we market, sell and shop”.


“Some, such as technologies that help customise store merchandise for the local market, are being implemented by large chains so they can behave more like local independent retailers at the store level,” Baker says.


“Others, such as mobile marketing programs, are more likely to be useful for small retailers themselves. Many of the technologies relate to online shopping.”


Baker identifies seven different technologies featured at the show that small retailers should be aware of:


Location-aware technologies

These link smartphones to physical stores. One of the prominent technologies is called Shopkick, a location-aware application downloaded by a consumer to his or her smartphone. A participating retailer can then detect when the consumer is in or near the store and promote a special offer via text.


Next generation mobile marketing

Consumers opt into a retailer mobile marketing program by providing information about themselves and their product preferences. They are subsequently notified by the retailer when a promotion is occurring on a relevant product.


Group discounting

Bricks-and-mortar retailers are beginning to test their own versions of the online model made popular by group buying site Groupon, in which individual consumers obtain a significant discount on an item after a threshold number of participants have “opted in” to the purchase.


Localisation and store customisation technologies

This includes so-called “size optimisation” technologies for apparel retailers that determine the appropriate mix of sizes to order for any given item.


Cross-channel integration

One approach is to employ in-store kiosks with terminals that enable shoppers to go online to order items that are out of stock in the shop and have them delivered.


Another approach is the exact opposite – the consumer orders online and picks up at the store, in some cases at a drive-through pickup window.


Workforce optimisation technologies

Technologies that enable retailers to better match in-store staffing to actual demand.


Next generation of pricing optimisation technologies

Technologies to determine the appropriate level, timing and depth of markdowns. The newest technologies are faster, more flexible and can forecast demand for individual products at the individual store.


According to Sam Yip, senior research manager at technology analyst firm Telsyte, small retailers should focus on group discounting.


“That’s one of the most pressing technologies and new ways that consumers can engage with businesses, especially SMEs, today,” Yip says.


“A lot of the small to medium businesses are used to using little coupons but this is their chance to get into group buying, members’ only sites [and] deal of the day sites in Australia.”


“Especially with group shopping, there’s around seven sites out there at the moment and some are claiming to do around $2 million per month in terms of deals.”


“The great thing there is that pretty much all of them are focused on small and medium businesses, so it’s the little spa shop down the road, it’s the Indian restaurant, etc.”


“[Small retailers should also focus on] the technologies around group shopping, so increased smartphone usage. We’re looking at 50% penetration of smartphones by the end of the year.”


“With smartphones come all the great applications and there are emerging applications around group buying on smartphones... Those are the technologies which SMBs need to focus on.”


Yip advises small retailers to steer clear of technologies around mobile marketing, localisation and customisation, stating, “That’s really expensive stuff. It’s high maintenance as well.”

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