Techno Know How
Get up to speed with all that today’s retail technology has to offer.
Often, we don’t know what we need to make our lives more convenient, until some new technology arrives to show us. People got by without the Internet fairly well in the pre-digital era, but can you imagine life without it now? If so, good for you! You’re a more resourceful sort than the rest of us over-connected Web crawlers. But the point here is that the same general principle applies to retailing. Once you’ve integrated or upgraded to some of the technologies described below, you’ll never know how you got by without them.
You likely already have some type of digital ordering and inventory management system in place in your store. But there may be some things that are new to you, including the latest capabilities these systems offer.
“Inventory management today is all about flexibility and automation,” say Burt Aycock, director of design, and Pete Catoe, president and CEO of ECR Software Corp. (ECRS), Boone, NC. Though there are no “one size fits all” solutions, the name of the game is making workflow more efficient. “Automating inventory processes can eliminate hours in manual work, enabling store buyers to spend more time in areas such as loss prevention, new product research, special orders and customer service,” says ECRS.
Features in current point-of-sale (POS) systems such as scientific or suggested ordering now allow retailers to drum up orders based on products sold in a specific time period, according to Autumn Schweitzer, marketing representative for Auto-Star Compusystems, Inc., Medicine Hat, AB, Canada. “Suggested ordering can calculate a trend based on historical data while looking at a variety of factors such as seasonality of products, lead time from suppliers, next order date and more to accurately project the best possible order for the store,” she says.
ECRS explains that the benefits of suggested ordering can come specifically from reduced out-of-stocks, overstocking and manual data-entry error. This all helps with the critical task of ensuring that the right products are on the shelf at the right time, a feat that Schweitzer says will lead to greater cash flow.
Aligning your ordering system, whatever it may be, with POS data is crucial, says Geoffrey Robinson, president of Digital Earth Network, Sarasota, FL. “Suppliers are beginning to gain direct access to POS data, and retailers are increasingly using the auto-order capabilities of their POS systems. Once tweaked, there is much better inventory control and fewer out-of-stocks,” Robinson says.
These supplier integration services can offer a
set of features that make life easier for your suppliers. Suppliers can now monitor order activity on a Web-based dashboard, according to ECRS. They say functionality including direct order transfers, order confirmations, shipping notices, price/cost change updates, new item insertions and invoice receipts can all be made available to suppliers.
Like everything else these days, these inventory management systems are also making the leap to mobile devices. ECRS says that it has introduced an intuitive mobile app that works on Apple devices. “Authorized buyers can perform inventory management tasks from anywhere in the store,” says ECRS, adding that orders can be created and electronically transferred, all within the app. There is also additional functionality that allows for on-the-fly price changes, price spot-checks and inventory counts.
“While automation can provide many great benefits, simply put, it has to work,” says ECRS. Referring to the flexibility of their company’s software, they say that configuring inventory replenishment to suit an individual retailer’s needs and preferences is the way to make automation work.
Even fancier than all of this is the prospect of using radio-frequency identification (RFID) technology to manage inventory, according to Schweitzer. Through the use of miniscule RFID tags and radio-frequency scanners, hundreds of shelf items can be accounted for at a time, as opposed to the labor-intensive practice of physical inventory or the comparatively slower reliance on barcode technology.
Though this technology requires adjustments on the part of a store’s vendors (they have to put the RFID tags on products), large-scale retailers like Walmart have already implemented RFID systems to great success, and Schweitzer feels they will eventually become more mainstream in POS systems. She adds that RFID can also be used in customer identification, promotions and payment processing applications.
Mobile Store Monitoring
Retail information monitoring has recently become possible away from the store, via the power of the Internet. “Being able to view key business data on remote devices is just starting to happen,” says Robinson. In addition to the mobile apps for inventory management and Web-based platforms geared toward suppliers we’ve already described, he says, “We are also seeing mobile monitoring of stores and transaction data from the POS and DVR systems from anywhere you can access Internet.” With DVR technology, imagine checking in on how the checkout lines in your store are moving, right from the beach!
“Real-time, on-demand reporting capabilities allow retailers to analyze and quickly respond to sales and customer trends, even if away from the store through the use of their mobile device,” says Schweitzer. Her company’s Web-based reporting software, she says, “combines traditional reporting with the power of business intelligence tools to offer instant access to real-time store information from any location.”
One feature that Schweitzer says has recently been added is the ability to send store vital signs, like net sales or a daily cash report, in an e-mail or text message formatted for mobile devices.
Customer Education and Convenience Kiosks
A variety of in-store customer interface tools are available, often in the form of electronic kiosks that can either help customers make purchase decisions and educate them about natural products, or provide them with shopping information that they’d otherwise have to engage an employee for.
But broader, electronics-based customer education programs can be utilized on the Web and on customers’ smart phones, as well as on in-store fixtures. “Decision tools and education materials, particularly for the vitamin category, are very common,” says Bill Schneider, director of marketing and client services for Aisle7, Portland, OR. He points to leading retailers like GNC, Vitamin Shoppe and Vitamin World that effectively use education materials on their Web sites, in stores and on mobile programs in some cases. Even conventional retail giants like Walmart and Costco have invested in such platforms, he says.
These programs are designed to help answer shopper questions before they shop, often through the use of high-quality educational content provided on a rotating basis by third-party companies. In the natural channel, the reasons for such platforms are clear. “The natural category has seen brisk growth over the last several years, particularly when compared to conventional products, as more mainstream shoppers enter the category for health and environmental reasons,” Schneider says. This influx of consumers, combined with new science, media reports and outlets like Dr. Oz, creates a need for objective information to support decision making.
The types of questions Schneider says his company sees routinely are:
• What should I take in addition to my multivitamin?
• Are supplements safe?
• Do they interact with my medications?
• How much should I take?
• Is there scientific support for a specific health goal?
Questions like these, left unanswered, lead to stalled decisions, Schneider believes. “Retailers that make it easy for customers to answer their questions have an advantage over those that don’t. Now that consumers have access to the Internet anywhere at any time, retailers that employ an omni-channel education program are able to begin a relationship with the consumer at the point they have a question,” he says. Companies like his can help facilitate this process, he says, with programs that can be implemented in-store on iPads for staff to use while helping customers or for customer self-service, as well as on other Web-based platforms.
Other types of kiosks, in addition to promoting products, can provide customers with a convenient means of finding product information, Schweitzer says. She explains that her company’s kiosk solution allows customers to check prices on specific products, identify products taking part in promotions, and even check loyalty points and status levels.
ECRS, meanwhile, in addition to some of these features, mentions that kiosks can also allow consumers to update their store account, including contact information, and to opt in for electronic receipts. “This kiosk ‘robot’ is a great assistant to store staff, especially during high traffic hours,” says ECRS. Robinson believes that to get a worthwhile return-on-investment with these tools, staff must consistently educate customers on the service and promote it to them, or they may go underused. “Kiosks can be a great tool, but they require constant maintenance and monitoring for optimal experience,” he says.
Your Point of Sale
Today, technology allows quite a lot to take place at the cash register, beyond just the exchange of money for goods. For one, Schweitzer says that digital advertising can be integrated at the POS, including the ability to change advertising content depending on the quantity of product on hand or to tie in with specific promotions, including coupons tailored to customer purchases.
Then, there is the widespread integration of loyalty program features at the POS. “Retailers are using customer loyalty programs to track customer spending, and keep customers coming back with rewards such as gift certificates, entry forms, discounts, points and free gifts,” Schweitzer says. She also describes an interesting feature that ties in with the “buy local” trend, where software identifies items that are produced locally and indicates this on the customer’s receipt.
Using a self-hosted loyalty program integrated with one’s POS system may save on costs associated with third-party programs, ECRS says, and it provides more flexibility. “Point-based programs are effective, transparent and easy for customers and employees to use,” they say, adding that later this year their company plans to roll out an additional loyalty program service to complement its current loyalty points-based system. As opposed to the “pull” that loyalty points have in bringing customers to the store, the new service will integrate social media, and will “push” promotions out via e-mail on a custom schedule set by the retailer.
Self-checkout. Speaking more broadly about the potential of POS technology, ECRS says, “It is important that natural grocery stores cater to the needs and shopping preferences of their customers, whether it’s with traditional checkout lanes, self checkout, mobile POS or new, high-technology innovations,” such as their company’s 360-degree product scan tunnel for self checkout.
Many customers today, ECRS says, are growing used to technology that allows for self checkout. “Autonomous self checkout is great option to absorb traffic during peak hours, cater to lunch crowds or to improve direct customer interaction on the sales floor,” they say, adding, “For example, a self-checkout kiosk placed in a deli department would allow faster service for customers who simply want to pick up a quick lunch and get back to work; a convenience that could actually result in higher sales.”
Key points to consider in selecting a self-checkout system, according to ECRS, include reliability, minimal need for employee interaction and intuitiveness for customers. They believe that the commonly implemented practice of having multiple self-checkout lanes overseen by a dedicated attendant with a workstation is not ideal for many natural grocery stores. Instead, self checkout should serve as a true stand-alone “robot” or “assistant.”
Mobile payments. Technologies that allow customers to use nontraditional forms of payment at checkout, from cloud payments to proximity payments, are coming into their own. Some of these solutions use PayPal, while others use Near Field Communication (NFC) from mobile phones to conduct transactions. One forecast has the percentage of payments made under the heading of “mobile” rising to 13% by 2018 (1).
“Mobile POS solutions have become more popular as retailers look for innovative and cost-effective ways to increase efficiency and improve customer service. Mobile solutions allow retailers to complete transactions while away from the store and also reduce hardware costs,” says Schweitzer. There may, however, be slight security concerns with some of these payment options, and there are infrastructure obstacles to their widespread adoption.
Of the future of mobile payments, Schweitzer says, “While we do not expect this to replace traditional POS systems, we see it working in conjunction with the store’s existing solution.” ECRS agrees with that assessment, stating, “A combination of traditional and non-traditional POS options should provide a competitive edge to natural retailers and provide benefits for both the customer and retailer.”
Marketing to Mobile
You’ve certainly seen them, and may even know that those black dot matrix things that you scan with your smartphone (which then typically links you to a company Web site or marketing platform) are called quick-response (QR) codes. But those in the retail technology industry seem to think that QR codes and other means of marketing directly to customers’ mobile phones are either fading or still developing. “QR codes are losing their momentum, and in large part due to vendors placing links to a site not optimized for mobile viewing,” says Robinson. The poor consumer experience that results makes people less inclined to try QR codes in the future.
Robinson believes that since new technologies like this develop and change so rapidly, it’s usually wise to wait and see what sticks, and if any industry standards develop. “The jury is still out for many of these technologies. There are very few successful QR or near field communication (NFC) programs in production. We recommend testing these programs to see how their consumer base will respond,” Schneider advises. He says that since these technologies are relatively inexpensive to test, they may be effectively rolled out on small scales to get customer feedback before diving in further.
Unfortunately, showrooming is not something that technology can do for retail, but something it has done to it. It’s the all-too-familiar practice of consumers using brick-and-mortar stores as places to get a visual on products, only to turn around and buy them online elsewhere for cheaper prices. The question is how to combat it.
Schweitzer suggests Buy One, Get One sale opportunities, which can be filtered through modern electronic POS systems, as a way to provide value that Internet retailers can’t easily replicate. “In addition, real-time coupons or subtotal discounts available only in the store help to drive traffic to the store location,” she says.
A word of caution when it comes to showrooming is offered by Robinson: “If you have an online presence and promote it to your walk-in customers, you are training them to first check your online presence and they will very shortly start shopping online by price alone.” There is hope, however. Robinson says that there will always be a place for physical store locations, and you can help ensure yours by focusing on what you do best. He says, “A large portion of consumers will always be willing to pay for direct access to products at their convenience, personal attention and other aspects that online vendors cannot reproduce.” WF
Published in WholeFoods Magazine, August 2013