Software Changing The Future Of Retail: Trends To Watch

Some retailers innovate in-house; elsewhere, startups are bringing modular improvements to the in-store experience. Online sellers are making advances in logistics while growing their marketplaces to include wide varieties of new and used goods sources from a network big and small businesses. Here we’re tracking the latest developments.

Software Changing The Future Of Retail: Trends To Watch

The Way We Buy Is Changing

While retail commerce is still overwhelmingly in-store, the very notion that “in-store” and “e-commerce” are discrete has begun to dissolve. Big stores are trying to figure out how to engage customers on smartphones while web-native retailers like Amazon and eBay are extending their services into in-store territory with same-day fulfillment options. As the nature of the store changes, store operators are hunting for new technologies and partners who can help them figure out loyalty, in-store behavior, comparison shopping and what to do with social networking.


What This Story Is Tracking

Some retailers innovate in-house; elsewhere, startups are bringing modular improvements to the in-store experience. Online sellers are making advances in logistics while growing their marketplaces to include wide varieties of new and used goods sources from a network big and small businesses. Here we’re tracking the latest developments–should they spark any bright ideas, scratch out a few wireframes and a functional spec of your app, and submit it to our Retail Accelerator.



Here are eight things you should do regarding QR codes and four things you shouldn’t. Perhaps the most overlooked: educating everyone in the store, customers and employees alike. One major pratfall of integrating QR codes into your merchandising strategy is that iOS devices don’t come pre-loaded with a QR code reading app. So while iPhone-owning customers might be aware you can access information via an in-store code, they may be discouraged from interacting with it because they don’t know QR-reader apps are out there, or are baffled by the variety on the App Store. While some Android devices do come with QR code readers, many users may not know the apps are even there. Via The Mobilists:

First educate your employees. They need to be able to help your customers if they are having any problems understanding what to do. This may take a little up front time but the end result will increase the efficiency of your store. Second, educate your customers. I would put up signs explaining the QR codes and how to use them. Your employees should be ready to help if they run into any questions. Macy’s used a video explaining the codes in their “Backstage Pass” campaign.

As of January 2013, at least four brands have passed one million Instagram followers and more than 30 have over 100,000 followers there. For small companies especially, Instagram is an idea content marketing platform because it’s so low-overhead to produce compelling content. For big companies, it’s your best shot at seeming natural and organic, because there’s no real necessity for copy writing. Here’s are the companies on the list who have retail stores. Via SocialFresh:

Victoria’s Secret 1,363,468 followers
Nike 838,177 followers
Forever21 673,560 followers
Burberry 651,199 followers
Top Shop 518,466 followers
asos 468,706 followers
H&M 456,614 followers
Adidas (Adidas Originals) 393,282 followers
Tiffany 347,071 followers
Gucci 341,935 followers
Coach 121,568 followers
Ralph Lauren 112,374 followers
Adidas 109,793 followers
Gap 77,683 followers
Armani 73,874 followers
The North Face 63,932
Puma 47,738 followers
Levi’s 43,284 followers

Walmart makes an interesting acquisition in March 2013. A company called socialcalendar, built on the Facebook platform, calls itself “the place for birthdays and holidays” and claims to have 100 million special dates belonging to 15 million users. Apparently Walmart is after is social gifting. Via AllFacebook.


But what does the retail giant want with a calendar app? One possibility is tracking birthdays, anniversaries, and other occasions to suggest gifts — especially if users can then purchase the suggested items with just a few additional clicks. That could easily happen by tying the calendar into Walmart’s ShopyCat commerce app.

Here are 20 areas of frustration for big retailers surveyed in the UK according to an interview-based study by the consulting arm of electronics-maker Hitachi. Here are the pain points which might be the most feasible to address with a startup software product. (Note that in the context below, BI stands for business intelligence.) Via Hitachi:

Hitachi Consulting conducted qualitative interviews with 20 of the UK’s leading retailers, including Debenhams, Waitrose, River Island, Halfords, Shop Direct Group, Thorntons Plc, TK Maxx, BHS, Argos, Signet Trading and ATS Euromaster among others. The report identified 20 areas of IT focus (and frustration) for UK retailers in 2011:
2. Managing business expansion into new markets, including through joint ventures and franchises
3. Tailoring brands, ranges and promotions to multiple or new channels and markets
5. Reporting capabilities not keeping pace with business demands
7. Customer data locked in source systems and not available in corporate information systems
8. Difficulty in extracting and manipulating meaningful data from corporate information systems
10. Almost every job function is less than very satisfied with their BI provision
11. Those in online are significantly more satisfied with their BI services than those in multichannel
12. BI is not closely enough integrated to the business process
13. There’s a strong appetite to get closer to real time information
14. Information requires significant rework before it can be presented
15. ‘Spreadsheet Spaghetti’ is still prevalent
16. Desire to improve data reporting capabilities, including dashboards and complex analysis
17. Mobile is still not central to BI plans

A vision of in-store app use that we just can’t take seriously. Granted, the source in this article is a representative for a commercial WiFi provider, so it’s no surprise that he’s shilling. But this kind of image of the “wired store” has been perpetuated for years without any real evidence that consumers want it (or that it would actually improve their experience or loyalty.) In this piece, the idea being advocated is in-store Wifi, which customers can use as a speedy pipe for merchandising. But the scenarios depicted here-checking in-store inventory–seem less and less sensible because of advancements in fulfillment. Few retailers hide items in inventory if they’re hoping to sell them. And what on earth would you do with an augmented reality app in the sports section of a big box store, or the lingerie aisle of a boutique? Something tells us something like Kate Spade’s in-store experience is a little more realistic. Via LuxuryDaily:

Having this [Wifi] connection can help retailers expand their aisles in-store by showing products that may not be out on the shelves. Consumers could also use the in-store Wi-Fi to find a specific product at another nearby store or online, if the product is not currently available at the store they are in. “[Wi-Fi] can expand what consumers are seeing in-store and it makes for an endless aisle,” Mr. DeStasio said. “Consumers can see if it is in a different size or color, or go to a different store where they can actually go buy it.” Customer service can be greatly increased by making sure a customer can locate what they want to purchase. This is especially important to luxury marketers since superior customer service is what distinguishes luxury retailers from mainstream retailers. “Embracing Wi-Fi in store allows the retailer to show customers more information than they would normally have about products,” Dave Rodgerson, senior management consultant of retail strategy and change at IBM Canada, Toronto. “In any luxury store, the customer experience is one of the most important differentiators,” he said. These experiences can also be further enhanced by other technologies such as augmented reality. “Augmented reality mobile applications can create a bridge between the physical world of the store and a digital customer experience,” Mr. Rodgerson said.

Here are two standalone apps making a dent in consumer retail behavior. The first is TikTok, which lets retailers push offers to shoppers at opportune times. The other, Social Impact, is a store search tool that only looks in a curated list of stores.


Via Retail-Digital

Based in Vancouver, TikTok is the next generation in Social Couponing operating on the concept of free. Businesses are now able to set up free and time sensitive offers, in-store and in minutes. Interested users receive the limited time freebies through geo-targeting on their iPhone or Android devices, and opt to visit the retailer and redeem the offer. TikTok offers a free platform to control and drive in-store traffic for when business is slow – or there is a premium to use the advanced targeting interface.

Via Good:

“Social Impact” is a free app that utilizes the iPhone’s GPS system to display the closest retail social enterprises—including restaurants, coffee shops, and craft stores. The developers, Rolfe Larson Associates, have added nearly 700 businesses to the app’s database so far—each include serving the common good as part of their mission. The developers are eager for users to suggest more socially progressive businesses to grow the network.

A white paper by PSFK suggests that retailers push shoppers to begin their in-store shopping experience before they get there. And while a high-touch shopping experience is conceivably the outcome, it’s also a great opportunity for stores to push you certain incentives (perhaps targeted coupons from competing brands) based on your intent to buy or your interest in certain manufacturers or product categories. Via PSFK:


By submitting your information prior to a visit, you can help the customer representatives help you find exactly what you want, and get recommendations tailored just for you. Although online-only, Modcloth is a service that give customers one-on-one fashion advice based on past purchases and preferences. Physical retailers could easily adopt a similar model where via app or social login users submit their preferences and details, so when they arrive a tailored experience is ready and waiting for them, as if they were a regular. Imagine being greeted in your favorite store by name, with a selection of items just for you to browse (likely with a special discount) just for volunteering some information!

Stay Tuned As Coverage Continues!

Image by Hospi-table on Flickr


About the author

I've written about innovation, design, and technology for Fast Company since 2007. I was the co-founding editor of FastCoLabs