Another year of transformation: What’s on the plate for retailers in 2018? (Part 1 of 2)
While 2017 is coming to an end and Christmas sales hopefully peak, let us look ahead to see what is coming for retailers in the field of technology in 2018. And as I am passionate about digitalization in general and RFID technology in specific, I am in constant conversation with retailers about how to utilize and adopt new technology in order to create an inspiring and profitable business.
Of course, it makes no sense to implement technology just for the sake of technology, especially in retail. This business is – more than ever before – about people. But ideally, technology can support people and contribute to an amazing shopping experience for the customer.
Here is the first part of my takes on what is happening in the retail technology field and how this relates to RFID. In this blog, I first look at two topics that have direct impact on the customer experience – the dynamic pricing of products and the mobile checkout. There will be a second part with two additional topics later this month.
Dynamic Pricing – Offering the ‘best price’ with one click
Customers are better informed than ever before. With the smartphone in our hands, we are able to compare offers anytime and anywhere and quickly find the ‘best price’. This requires dynamic pricing strategies from brick & mortar retailers, including appropriate technology.
Digital price tags combine a smart display (e.g. eInk) with wireless data transmission. Thus, store associates no longer have to print, attach and manually maintain the price of each individual item across the store. After the last years, the use of electronic shelf labels is growing continuously, especially in grocery and electronics stores. Relatively new is the application of digital price tags on the individual product. Those digital price tags can be combined with RFID technology which enables – next to instant price changes – also real-time stock visibility.
What’s is the best price today given the weather, my inventory levels and my competition?
The advantages are obvious: price changes can be handled with “just one click”, e.g. based on demand, weather or popularity or to immediately initiate seasonal pricing, happy hours or react to (online) competition. But it is not only about reducing the manual handling. With regards to omnichannel, a dynamic pricing system is able to stay up-to-date with the (volatile) price changes among different sales channels. This is especially interesting when we look into optimizing product margin, e.g. by increasing the price of a bestseller product.
As smaller pains like battery life and recycling will be solved over time, I expect that smart digital tags and Dynamic Pricing will become of growing importance. But one question remains, as consumers only used to know one way of prices in the store – the markdown, but does the shopper accept price uplifts? Time will tell.
Frictionless payment: the path to the no-line store?
One of the most talked about places in the store – in retail history, but especially right now – is the check-out. How can retailers solve the problem of queuing, eliminate abandoned baskets and really match the convenience of online payments? It does sound tempting to simply do away with all traditional check-outs and let shoppers benefit from a mobile payment – either with their own smartphone or on a retailer’s mobile device. No lines and more floor space, which also offers new possibilities for the in-store routing and frees up your store staff to interact with customers. Sounds great! So why not?
While mobile payment apps that turn mobile devices into a mobile POS (mPOS) look like the Holy Grail, retailers need to make sure that their shrinkage levels do not explode. Otherwise, the mPOS advantages can come at a very high price.
RFID enables secure mobile POS solutions
At first sight, there is a major conflict between mPOS solutions and any loss prevention measures a retailer has implemented to prevent shrinkage. Especially the traditional anti-theft tags to secure products are an important limiting factor in the deployment of mPOS solutions due to the required detaching or deactivation step. However, this is not the case with RFID as the technology offers a straightforward, easy-to-implement solution to combine the best of both worlds.
By adding an RFID label with a GS1 Datamatrix to their products, retailers can track which items have been paid for and any item that has not been sold causes an alarm at the store exit. This enables retailers to have a scalable and customer-friendly mPOS solution that does not conflict with the retailer’s loss prevention policies. In this case, technology (mPOS applications in combination with RFID) truly creates a great (and frictionless) shopping experience.