Opinion: NRF 2023 - our main takeaways
By Cy Pearson, Head of Business Development
Our annual trip to New York is always a highlight for the team and reminds us that the market (and benchmark) for retail tech solutions is constantly moving forwards. It was great to see so many vendors putting on an amazing show, and I don’t just mean bright lights and great stands. The quality of capability which was demonstrated, often with live demos and without the safety net of slideware was incredible.
Amazon had a pop-up shop selling refreshments just inside the entrance. It sold out pretty much every day – and I can't help wondering if that was down to curiosity or because it was easier and quicker than the typical Javits stands (which it was).
Frictionless shopping was an almost ubiquitous topic across software and hardware vendors. Both in store and online solutions were attempting to address the key question – how do you get the shopper from A to B, or A to Pay with as little effort as possible?
There were a plethora of vendors selling frictionless shopping solutions, including several big players now offering variations of the Amazon pop-up walk-in, walk-out solution, which uses a significant number of cameras pointing down on the shop floor. The cameras track detailed digital images and the products you pick up to buy. To make the payment you simply tap your contactless card or payment app prior to entry.
Our general takeaway is that the technology is there, but the price tag and effort of change probably makes it difficult to justify mass roll-out right now. In one of the conference sessions a retailer spoke of it taking three months to refit a store with new entry and exit gates, and while this was hailed a success, it was only live in one store. But as with adopting any new piece of tech, there is always the initial upfront costs and configuration before the eventual benefits can be realised.
There were a few vendors who had used camera technology and recognition on a smaller scale, focusing on the point of payment rather than the whole store. This entails dropping a small number of items onto a weighing pad and it recognises them all together, you can then pay using contactless payment, and the total transaction takes less than 30 seconds.
One vendor had not gone for a camera and imaging approach but instead used LiDAR and shelf sensors to avoid the privacy concerns of the imaging technology. An innovative solution to be sure, and one that proves there is more the one way to skin the proverbial cat.
A different, but promising approach to frictionless shopping focused on customer interactions and the unnoticeable use of tech to bring shoppers closer to the sale. One tech vendor used multiple form factors to engage with the customer across the purchase journey. This started at self-service kiosks where items are scanned for price check and then added to a virtual basket, then to an associate looking for stock of an item in another colour, and that again being added to your virtual basket. Then to the final check out where you add those last few items. The virtual basket follows you through the store and contains items from store, items for home delivery and items for collection from another store – all of which has been possible for a while but including it within a virtual basket with the consumer around the store was new.
The divergence of POS
The POS market has been stagnant for several years with very few new entrants launching new products or attempting to enter. In the past, this has meant that when a retailer went to change POS, all POS vendors were invited to tender, and the retailer could make their choice from a wide selection.
Over the years, POS has become the place where retailers have added functionality and features. Due to the requirement for a network and some decent computer power, the till or register was the only place tech could traditionally be deployed. The advent of more powerful handheld devices, such as phones, and tablets is changing this dramatically.
Nowadays some POS vendors are creating operating system-specific options, eg just iOS or just Android. For the retailer with a preference for a particular technology stack this can narrow down the choices.
Two other factors are very noticeable with POS vendors:
SoftPOS is also on the short-term horizon. We were pleased to see at least three different payment providers and hardware providers with credible solutions that would allow retailers to take payments via a tablet or handheld without additional equipment such as PEDs.
RFID is here
In reality RFID (Radio-frequency identification) has been here for over 20 years but dogged with challenges over application use, and areas where the technology didn’t fit the business need. For example, liquids were always a no, densely stacked or folded items were hard to differentiate and everyone worried about tag costs, and whether you went to a carton or item level.
So forget all those worries, they have all be addressed and dealt with and there are a significant number of retailers making good use of the technology for stock accuracy, speedy checkout, loss prevention, and wastage in food to name a few applications.
The question now is not should you use RFID, but rather how do you use RFID. In the grocery sector, no-one is suggesting you tag a lettuce or a tomato, it’s at a carton level where age and shelf life can easily be monitored and tracked, and most importantly saved before it’s scrapped. This is a simple way to save money and protect unnecessary wastage.
For fashion it’s all about stock accuracy. When the stock file says you have one in store, you know you have one in store and can make it available to buy. At present most retailers add buffers into their stock numbers, so not all stock is available to buy. While we were in NYC we went shopping, and in one store you checked out yourself using RFID (which most people didn’t even realise was in use).
For all areas of retail the common messaging is to tag as early as you can in the supply chain, to consider the use case, the product and where the business case sits. If you talk to the vendors using RFID there are some amazing stories of returns on investment.
Last year the debates were about which Cloud provider to go with, now most people accept that it’s Cloud and don’t seem to care whether it is AWS, Google or Azure. Now we are hearing about the benefits that these platforms can really help build, such as microservices, modular solutions and unified commerce.
There were also a significant number of robots and picking and delivery automation stands – at one point a robot approached myself and my colleagues and loitered like a small child waiting for pocket money.
There are still some solutions looking for a problem to fix, but they are in the minority, overall most vendors had a great story to tell and can see a future with retail technology.
Lots of new and exciting solutions that will definitely change the retail landscape in the next year or so. RFID is worth a thorough assessment, and of course robots, robots, robots.
Frictionless shopping is here and there are so many good solutions that don’t require you to rebuild stores. Like many new solutions it’s important to consider the application of the tech and the limit or extend you want to test it.
A great show, next stop EuroShop…
Having started his working life as a Developer and then a technical lead in a Desktop Services team, Cy understands both the technical environments and the commercial challenges faced by retailers. Cy’s experience over 20 years encompasses infrastructure and disciplines, including corporate and retail networks, professional service, managed services, software as a service (SaaS), IoT, CRM, supply chain, e-commerce including last mile services, RFID, point of sale and payment services.
Cy is often the first point of contact for retailers wanting to find out more about PMC. Cy explains, “I’ve worked alongside PMC many times in the past and seen how retailers trust PMC to help define, select and build critical systems to drive their business forward."