Huw Thomas, Managing Director at PMC talks about the challenges retailers faced with technology in 2013 and looks at the trends, opportunities and challenges that lie ahead as we enter 2014.
In terms of the retail sector and its use of technology, how would you summarise 2013?
2013 has been another year of lots of potential but not much delivery in terms of volume deployment of new technology in the retail space.
Lots of hype about NFC but in reality I don't think that will ever achieve mass deployment. This technology has some great applications but is not for commerce as long as the spend limits for tap and pay are well below the expected basket size of many retailers.
Payments is an area that continues to drive change and there are some really exciting developments that have driven too much choice for retailers and the prospect of growing complexity of adoption. This is a market that needs some serious consolidation in order to really get traction for consumers and retailers alike.
Mobile is the winner in terms of adoption and usage. Nothing really new from a technology point of view but a technology that is being adopted vigorously by consumers and is destined for even greater growth in 2014.
What for you were the key retail technology-related issues and trends during 2013?
2013 has seen an improvement in the economic landscape and a slow return to retailers planning for growth and assessing how improvements in their core retail systems can assist. We have been engaged in more system selection activities in the last two quarters that the previous two years and I am aware of many more similar activities in the market. This is a trend that I hope will continue and increase into 2014.
In terms of how these investments relate to technology there are a number of retailers who simply need to refresh aging legacy hardware and software systems. Most of these will use the opportunity to capitalise on this and start resolving the multiple-channel architecture and drive to actually put the customer in the centre of everything they do. The key to this is in the management and simplification of data and system integration.
One of the major challenges for most retailers has been how to enable their IT systems to support activities such as; assisted selling, click and collect, cross channel promotions, cross channel sales and returns, loyalty, q-busting and secure payment. The retailers who address these challenges hold the key to really improving the retail customer experience and stealing a march on their competitors.
What are your thoughts on what lies ahead in 2014 (key challenges, trends etc)
2014 will hopefully be a return to retail systems development and we will start to see some real growth in innovation.
Mobile adoption has been increasing rapidly in the consumer space and I think next year will see the UK catching up on the US in terms of adopting mobile technologies in store. This in itself comes with some major challenges to ensure the output is a greatly enhanced customer experience and real cross channel integration.
One thing that retailers have to get to grips with quickly is PCI. There are sound reasons for continual enhancement of the PCI standards. However, retail IT departments are not best placed to effectively keep up with these enhancements and the time and cost spent addressing these would be better spent on making their technology investments in things that drive sales, improve efficiency or increase margin. I am a strong believer that management of secure payments should be outsourced to a specialist bureau provider that can share the knowledge and cost of these activities across multiple retailers.
Taking payment out of the loop will allow retailers to focus their IT teams on things that add value to the business. Short term focus should be on unifying the channels and putting the customer at the centre of them. Customers need to buy and return between the channels and the retailers need to share data gathered in one channel across the others to drive unified promotion and targeting. Consumers are quickly adopting all the new technologies and want to use them to enhance their shopping experience. Retailers need to meet that challenge and also adopt the same technologies to ensure their customers feel comfortable and are treated the same whether in-store or on-line.