RETAIL TECHSmart retailers need a smart IT approach to survive and thrive in 2018. By Mike Lowey

To say that the swell of online shopping has brought brick-and-mortar retailers face-to-face with a sea of change may qualify as a major understatement. Amazon’s acquisition of Whole Foods is shaking up the eGrocery market, which is predicted to grow into a $24 billion industry by 2017. The popularity of the buy online and pick up in store – aka BOPIS or “click and collect” – option continues to soar, with 87 percent of millennials in a recent IRT survey indicating they prefer this model.

Shoppers Still Like Stores

Foot traffic has been dropping in U.S. retail stores by more than 9 percent annually, according to VDC research. So it’s not surprising that 46 percent of retailers currently provide BOPIS services, and an additional 31 percent intend to introduce it. The good news is that despite their willingness to order just about anything from food to clothes to electronics online, most consumers are still fans of physical stores because they like to touch, try on and see products firsthand.

But changing customer expectations are reshaping the retail world – and driving retailers to reimagine the buying experience. Apple is rebranding its largest stores “town squares,” envisioning gathering places that also offer classes on topics such as coding, music or photography. Nordstrom is opening a concept store that offers spa services, tailoring, stylists and a bar – but no fashion lines. And Starbucks plans to open more roasteries to immerse customers in an interactive environment.

To survive – let alone thrive – in this brave, new, competitive environment, retailers from big box chains to department stores to grocery and specialty stores need to optimize technology in order to deliver a positive experience that keeps shoppers coming back for more.

Technology Investment Pays

As an organization, we’re boots on the ground, and here are five ways we see retailers integrating digital technologies into their businesses:

1. Use mobile technology to accelerate the success of omnichannel initiatives such as BOPIS. Contemporary enterprise software platforms that enhance customer service and offer popular click-and-collect options raise the shopping experience to new levels. Increasing investment in various in-store mobile technologies – including a robust online presence, industry-specific application software, handheld hardware and mobile printers – helps ensure the BOPIS experience is seamless and pleasant every step of the way, from online ordering through efficient, frictionless fulfillment.

A number of strategies are proving successful at supporting this goal. Mobile apps encourage shoppers to check in with staff members as they arrive at the store, pre-picking streamlines fulfillment and mobile printers help sales associates quickly print barcoded labels that ensure product accuracy. Providing designating parking and dedicated staff runners to load customer vehicles also help to meet elevated customer expectations.

2. Improve warehouse inventory management practices by taking advantage of mobile technologies. Streamlining warehouse inventory management practices that support e-commerce is essential, with mobile technologies playing a key role in delivering time-sensitive instructions to employees regarding merchandise handling, storage and routing. Mobile printers are ideal for labeling and re-labeling storage racks, bin locations and physical assets such as forklifts.And, of course, accurate labeling and re-labeling of merchandise from receiving to put-away to picking to re-shipping supports efficient routing, loading and unloading.

3. Put technology at the fingertips of sales associates. Employees equipped with networked smartphones and tablets can quickly and easily help shoppers find the right items or order online if the desired items, colors or sizes aren’t immediately available, as well as recommend additional purchases. And associates with mobile handhelds and printers connected to mobile POS systems can issue sales and return receipts on the spot, creating a customer-pleasing experience.

4. Capitalize on the cloud to boost staff productivity. Cloud-based applications, in tandem with the IoT, have powerful potential to enable smarter business analytics and decision support. This helps to make employees more efficient and productive in the store and back office. When used with mobile printers, for example, cloud solutions enable sales associates to react to immediate pricing decisions by quickly producing on-demand shelf edge and item price labeling for real-time pricing and inventory management.

5. Embrace the IoT revolution. The Internet of Things is transforming industries from healthcare to energy, and retail is no exception. Take advantage of an IoT platform to install beacons that allow you to send alerts, content and coupons to customers’ smartphones as they stroll your aisles or even engage them post-visit. Or, use IoT to support cloud-based management of all peripheral devices that connect to your POS system.

Keep Your Customers Satisfied

We understand that it’s tough out there. The stakes are high, margins are tight and keeping overhead expenses in check is challenging, as is effectively managing inventory mix, location and turns. But we also see that customer-centric retailers intent on delivering a positive, highly satisfying experience that makes shopping with them as easy, convenient and engaging as possible are making the worthwhile investments in technology to stay relevant and competitive, despite – or maybe because of – the onward march of digital adoption.

Mike Lowey is the director of retail sales, and a retail market specialist at Brother Mobile Solutions.


 RETAIL SOLUTIONSArtifical intelligence enabled solutions, powered by machine learning, are poised to deliver unprecedented insights and create a new retail paradigm. By Sy Fahimi and Ryan Powell

The rise of e-commerce and the corresponding explosion of digital shopper data redefined retailers’ customer intelligence limitations, revolutionized shopper engagement practices, and changed customer expectations. Over time, as omni-channel retailing became pervasive, shoppers’ online behavior data became the catalyst for sweeping improvements to customer engagement across physical and digital touchpoints.

Yet the limitations of applying digital data in-store traditionally meant that online retail maintained an intelligence and personalization advantage. However, that paradigm is quickly shifting.

Breaking the Rules

Modern store systems are now capable of aggregating massive data sets from nearly every consumer touchpoint – digital or physical – and have emerged as powerful competitive assets. AI-enabled customer intelligence applications, built on machine learning, can evaluate trillions of data combinations – far more than any human or traditional enterprise system ever could – to deliver highly targeted recommendations to retailers, CPG manufacturers and customers alike. By removing human biases and limitations, physical retailers can do as Amazon does: optimize their strategy in real-time, based on complete data, to improve the shopper experience and deepen relationships with their customers.

Personalized Marketing

The greatest benefit of AI-enabled applications is that they can identify trends or anomalies among those trillions of data points to predict future behavior faster and more accurately than any human operator. They’re able to project outcomes and guide marketing decisions based on any combination of potential inputs, such as a targeted discount for a certain product or the introduction of a private label alternative to a low-margin supplier item.

At the consumer level, rule-based algorithms are limited by their understanding and segmentation of historical data. While marketing campaigns using this foundation are today considered ‘personalized,’ they are not comprehensive and often result in plateaued redemption and incremental growth rates.

In contrast, AI-enabled personalized marketing solutions can anticipate consumer needs by analyzing trillions of combinations per household and identifying signals in historical data that predict future behavior. By giving the system the freedom to choose from an unrestricted range of offers that humans may not think to send, the system is able to ‘learn’ the best mix of offers for increasing redemption rates and supporting marketing goals.

No matter how intelligent the targeting, marketers need to ensure their messages are reaching consumers at exactly the right time and place. An AI-enabled system will know a customer is likely running low on pet food, and a new brand with healthier ingredients will deliver higher margins in the long run.

By sending a targeted offer through a mobile app, triggered by a geofence, marketers can engage with shoppers in-store, where they are much more likely to respond favorably than receiving a coupon in the mail or at the point of sale.

AI-Enabled Merchandising

As one might imagine, the variability in a consumer’s willingness to redeem an offer is not just about the depth of the discount; it’s about the relationship of the customer to the product or brand in question. But that doesn’t mean the customer has to be brand loyal or have even bought the product before. In fact, they don’t even need to have ever considered a purchase from the category.

In a standard merchandising model, no one could predict when a customer who has never bought a sports drink, or any drink, would be willing to enter the category. But AI-enabled category management solutions assigned the outcome goal of increasing sports-drink sales can identify trends in behaviors for sports-drink consumers in other categories that make it clearer who to target and what it would take to convert them.

Today, physical retailing is all about creating a store environment built on rewarding, data-driven customer engagement strategies that lead to long-term loyalty. No longer are personalized marketing or curated assortments the exclusive domain of digital, nor is it any longer acceptable to create offers that supports business goals only to force feed them to unwilling shoppers.

There is now a fundamental mandate for stores to have a 360-degree understanding of their consumer and to know precisely how to act upon that information. Fortunately, with the arrival of AI, synthesizing and acting upon the insights customers share at every touchpoint becomes easy. And doing so will create a new relevancy and strength for physical stores in a data-driven digital economy.

As Senior Vice President of Product Strategy for Symphony Retail Ai’s customer intelligence division, Sy Fahimi is responsible for product strategy, direction and execution. Ryan Powell is vice president of merchandising and category management within the retail solutions division at Symphony Retail Ai. Powell is responsible for the product management, innovation, R&D and go-to-market strategy for game-changing solutions.

 RETAIL LABORIndustries are moving past the millennials and preparing to recruit generation Z. By Kellie Murphy and Ben Hutterer

When it comes to generational gaps, many human resource departments are like cashiers at a busy deli: “Next!” Many have dealt with the baby boomers, a generation that loved change, and then in the 1980s decided they were done changing. The boomers were followed by generation X, also known as the “latchkey” generation because their boomer parents often weren’t home when gen X kids returned from school. Gen X became well known for their independence and resourcefulness, being self-managing and seeking a work-life balance.

The most recent generation, the millennials, began to join the workforce around the year 2000 and through the recession. Millennials are a group that has strong communal ties and their ideologies of teamwork turned the corporate world on its head. Open cubes and campuses were introduced and companies had to adapt to this new way of life. The shift continues, as the first wave of millennials are nearing 40, with many of them partners and c-suite executives. Now is the time to begin preparing for the next generation of young adults who will be entering the workforce: generation Z.

Generation Z is expected to be more inclined to forego traditional higher education. This isn’t to suggest that Gen Z will not be educated, but they are expected to opt for a more independent alternative to finishing their degrees (e.g., online) or work-study options where they can be certified in a specific expertise while working. For many of us this may be seen as an advantage, as Gen Z may be more inclined to enter a skilled workforce and learn the ins and outs of operations as they are also completing business, science and art degrees. In many ways, this could be the generation that bridges the gap between the working class and upper management.

However, there is one problem for those looking to recruit talent: Generation Z is expected to be the most entrepreneurial generation yet. Projections from a recent study by Millennial Branding and states that some 72 percent of high school students want to start their own business someday, with 61 percent of them expecting to start that business right out of college.

Independent and Entrepreneurial

Gen Z is shaping up to be a crop of fresh, independent, entrepreneurial-spirited high school students. They appear to be willing to enter the workforce early while simultaneously earning degrees through either traditional or alternative methods, and they don’t care to work for anybody but themselves. So how, as an industry, might we put ourselves in an advantageous position to recruit the best of Generation Z?

1) Identify as “cool.” What was cool for millennials is not necessarily cool for gen Z. Millennials mostly came into the workforce around the time of the great recession and generally believed that cool companies were focused on stability and teamwork. They cared about their employees, and developed programs that created synergies among people. Gen Z is a group of individuals who identify themselves as entrepreneurs and want to make a difference. When appealing to gen Z, think about how your company would be a dream job, not just a stable job. Think about how your company can appeal to the individualist who wants to build something on their own and communicate that message.

2) Technology alone won’t impress. Many companies pride themselves on their interconnectivity. We brag to clients and customers about our cutting-edge portals and our awesome file-sharing capabilities. We gleam with pride about our latest video conferencing capabilities or the instant messaging system we use to communicate. They aren’t special. Gen Z will expect this and will roll their eyes if this is the pitch they receive during their interview process. This is a generation that grew up with Wi-Fi and on Facebook, Facetime, Twitter and Instagram, so our tech game probably won’t impress them much.

3) Appeal to their entrepreneurial spirit. With so many members of this generation wanting to be entrepreneurs – approximately three out of every four – businesses will need to figure out how to tap into that desire. This might be as simple as developing “thought groups” where they can use their creativity in a positive way. It might also be of value to push down certain responsibilities that will allow them to work independently and take ownership. Things like this will encourage creativity and recognition and create a sense of ownership and pride.

4) Be a thought leader/influencer. Ensure that your message is being broadcast to the right audience. Let that audience know what your company is trying to do, and how they are differentiating themselves. Communicate your ethical and social goals, and the difference that you are making, and make sure that you are utilizing the proper vehicles to have that message delivered.

As we all prepare to welcome the next group of young professionals entering the workforce, it is important for all of us to be thinking of how we are going to recruit the best and brightest. To do this, it is important that we start acknowledging the differences between the millennials and gen Z, and it is important that we start implementing a plan to do so now. With only four years to go, now is the time.

Kellie Murphy is a senior audit manager at Mazars USA LLP, specializing in the energy industries, including oil and gas, alternative energies and power generation. Ben Hutterer is a manager with Mazars USA’s energy and utility group in New Jersey.

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 RETAIL TRENDSThe economy strengthened throughout 2017, and the increasingly business-friendly environment will help produce a stronger retail sector in 2018. By Scott Grossfeld

Alot has happened in a year. At this time last year, the Dow was on the verge of 20,000 points for the first time in history. As of this writing, the Dow is now over 26,000. It is unlikely that there has ever been such a dramatic increase in the stock market over such a short period of time.

Other core fundamentals necessary for retail growth have also continued to remain strong. Unemployment is low. The cost of capital remains low. Consumer confidence is high. Inflation remains in check. Fuel costs are relatively low. And, consumers appear to be spending.

Another factor that may assist growth is the recent passage of the Republican Tax Cuts and Job Act (the “Act”). Generally, the Act will significantly cut corporate tax rates and provide tax relief to many. If the Act works as intended, companies should invest more in their businesses. In addition, taxpayers should have more discretionary income available (from tax savings) to spend.

Holiday Sales and Other Indicators of Growth

Recent prior performance of the economy and holiday sales are often good indicators of retail performance in the ensuing year. According to reports in Chain Store Age and Commercial Property Executive, retail sales in October rose over September last year between 1 percent and 5 percent.

In addition, year-over-year retail sales were up for November between 4.3 percent and 5.8 percent. In addition, holiday sales did not disappoint. According to a recent article, “MasterCard reported that holiday sales increased 4.9 percent this year, setting a new record for dollars spent by shoppers, the largest year-over-year increase since 2011.” This increase was more than predicted by many.

Consumer Confidence

Virtually all of the well-known consumer confidence gauges for the U.S. economy are currently at their highest levels in recent history. According to a recent Commercial Property Executive article, “… the University of Michigan … index of consumer confidence … average for all of 2017 was the highest since 2000, and only during the long expansions of the 1960s and 1990s was confidence significantly higher.”

Similarly, in a recent ABC News article, it was reported that “[c]onsumer confidence [was at a] 17-year high … [and that] consumers’ expectations remain at historically strong levels, suggesting economic growth will continue well into 2018.”

Consumer confidence is fundamental in any economic forecast. With high levels of consumer confidence, coupled with low unemployment and other positive economic factors, the indicators look good for the near future in retail.

Trends and Concerns

Although the metrics indicate that 2017 was good and productive for retail and that 2018 is poised to grow that success, there were some counter trends in 2017 for developers and retailers to manage. Last year continued to see significant store closings and retail bankruptcies.

Of particular significance, the year saw a lot of department store closings, causing great difficulties for mall owners. Owners have had to be creative to replace these tenants. In most cases, department store buildings have had to be re-tenanted with multiple tenants or their buildings have had to be entirely re-purposed.

However, it should also be noted that according to a recent National Retail Federation report, there was a “net increase of 4,000 store openings projected for 2017. For every closing, there are 2.7 openings. What is different today is that the stores that are flourishing are the ones which are willing to shed the old skin of traditional retail and embrace a newer model.”

Retailers are adapting to changes in the retail landscape. Many of these changes are caused by e-commerce and the fact that many consumers either shop at home or shop on the Internet. Therefore, what we have found is that many new stores require smaller footprints and are more highly targeted to specific demographics. These stores are able to sell both from their brick-and-mortar locations and from websites (they offer “omnichannel” services). Omnichannel service appears to be something that most modernized retailers are striving to perfect.

On the flip side, we are also seeing some traditionally online retailers starting to get into brick-and-mortar business. With Amazon’s recent purchase of Whole Foods and its openings of Amazon bookstores, it appears that even the largest online retailer sees the benefit of in-person shopping. We see this trend continuing to develop.

Another trend that we see continuing is the growth of experiential operators in retail projects. These operators provide experiences that cannot be duplicated online. Thus, as has been the case in the last few years, we expect to see leases in 2018 to more restaurants, theatres, fitness clubs, and other types of uses that involve a customer’s presence. As retail centers become more dependent on these types of retailers, the uses become more creative and unique.

The core fundamentals for continuing a strong retail recovery into 2018 appear good. The overall economy appears strong, the stock markets are at all-time highs, unemployment and interest rates continue to remain low and consumer confidence is high. So long as we do not experience the unexpected, retail should be in for a good year.

Scott Grossfeld, a partner at Cox, Castle & Nicholson, specializes in retail development and commercial leasing.

RETAIL TRENDSThe future of retail is not only a single-technology solution, it is an “all-the-technologies solution.” By Justin Patton 

Everyone knows how a point-of-sale system works. Stand in line, unpack items to the counter, and scan them for checkout. The process is tied together by that magic technology, the barcode scanner. With one tiny laser light, hundreds of items an hour can be accurately tallied and sold. In reality, the barcode scan is only one of an array of sensors all working together, with weight sensors in the hands, item identifiers in the eyes, and learning algorithms in the brain of the cashier that recognizes when pricing patterns don’t fit the items.

Bringing Sensors Together

This is why self-checkout kiosks usually include weight sensors, which often include human monitors nearby, and are rarely used for high value items. The barcode scanner appears as the star of the show, but it’s one of a whole suite of sensors for fast, efficient checkout, and one of the reasons human cashiers may not be going away as quickly as technology news headlines would have us believe.

This is sensor fusion at its most simplistic: bringing several sensors together on an item simultaneously, and using input from each in parallel, or even asymmetrically, to arrive at correct answers quickly, accurately, and with backup verification.

While the barcode scanner has reigned as the apex of store technology since the late 1970s, sensor technology has been progressing for 40 years in other fields of manufacturing, logistics and entertainment. Bluetooth in our phones can accurately locate exactly where we are. The Xbox Kinect can identify your child’s dance moves and match them with onscreen characters. RFID sensors quickly inventory mass quantities of packages.

We use these sensors to take family selfies with animated dog-ears imposed on them, or make race cars appear to zoom across photos through smartphone cameras. So why is it that your local grocery store’s most advanced piece of technology is the barcode scanner that’s been making the rounds of retail stores since Huey Lewis and the News were still new?

Sensor Fusion Elevates Retail

This won’t stand. Online retailers have been picking off consumers for years with tailored product offerings based on thousands of hours of browsing data and complete product purchase histories. Billions of dollars are being poured into virtual reality systems to make online experiences even closer to reality.

Meanwhile, brick-and-mortar retailers have the ultimate VR showroom, with reality minus the virtual, but little of the consumer tracking visibility of the online stores. Behind it all, we have truckloads, trainloads, and shiploads of product flowing all over the world, feeding both retail networks, and tethered by a tenuous web of paper manifests, complex email interactions, self-evolved data exchanges, and good old institutional knowledge.

This is where sensor fusion finally comes to retail, and things are changing quickly. Amazon’s Go store was a leader, with a whole bevy of sensors revamping the shopping experience. The Go store was the starting line, with almost every major U.S. retailer implementing advanced store concepts.

Sensor Fusion’s Benefits

The ways sensor fusion systems are benefiting retail include:

• Using multiple in-store sensors to gather and analyze data about shoppers’ habits, patterns and preferences.

• Understanding store traffic, from the number of people that enter the store to the way that shoppers navigate around the space.

• Measuring key customer habits to determine new versus repeat customers, customers’ visit frequency and duration, the routes they take throughout the store, what they buy, how much they spend, etc.

• Gaining unprecedented insights into shopper behavior and patterns, which can impact every part of the shopping experience, including store set-up and merchandising, marketing, customer service, improving conversion rates, identifying trends, determining staffing needs and more. Weight sensing devices on merchandising shelves can even provide real-time information about product sell rates.

• Using data about the precise location of merchandise within the store (e.g., shelves, racks, POS displays, etc.) to test the effectiveness of different merchandizing strategies to boost sales.

• Keeping accurate, real-time count of inventory coming into the store (including instantly tracking pallets of product), as well as tracking every product bought.

• Tracking products through the entire supply chain process, identifying in real-time where products are traveling throughout the system, identifying quantities and shortages, determining inventory in warehouses and throughout the sales network and pinpointing problems or backlogs in the supply chain.

• Preventing and tracking theft, using RFID tags for anti-theft and security that are removed or deactivated when the items are bought, and that sounds an alarm when active tags are removed from the store (indicating theft).

A Comprehensive, Holistic Solution

The future of retail isn’t a single-technology solution. It’s an all-the-technologies solution. Savvy operations, marketing, and innovation teams are learning how to galvanize all their sensors at once, with the fastest, most successful using it to view the big picture. The retail industry is now a data industry, and the amount of data that retailers need to understand and consider has become massive.

Sensor fusion is an efficient, holistic, comprehensive and accurate way to collect, review and analyze it all, allowing retailers to make more informed decisions that will determine whether they become the stores of the future or nostalgia of the past.

Justin Patton serves as director of the Auburn University RFID Lab, which specializes in the business case and technical implementation of radio frequency identification tech in retail, supply chain and manufacturing settings.

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