Magazine Article | March 22, 2012

2012 Trends In Retail

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By Mike Monocello, editor in chief, Business Solutions magazine

Solutions providers thinking beyond the point of sale stand to reap huge rewards in this dynamic and rapidly evolving market.

Few verticals have been as historically rewarding to VARs as retail. Business Solutions has been writing about capitalizing on trends in this space for years. However, in the past few years, technological advances have shaken up the traditional business model and opened the door for forward-thinking solutions providers not content to offer only POS (point of sale) hardware and software.

The NRF (National Retail Federation) recently produced a report with KPMG LLP that is a great barometer for how retailers are feeling today. One overarching result from this report worth noting: 52% of their respondents (i.e. retailers) plan to increase their IT budgets in 2012. “Retailers are poised to enter 2012 with a renewed focus on building up and building out many of their most important operations, hoping to establish a new sense of brand loyalty with their customers,” says NRF President and CEO Matthew Shay. “Though customers are always a company’s top priority, customer satisfaction will get a huge facelift this year. From increasing their brand visibility through cross-channel initiatives to providing unique, personalized shopping experiences through every channel, retailers have indicated 2012 is all about the customer.”

Not only do we have the NRF’s recent finding to look at, but Business Solutions’ sister publication, Integrated Solutions For Retailers (ISR), recently conducted a survey of its retailer audience. The results of that survey can be applied to your own customers.

Here is one interesting statistic from the ISR survey that should boost your confidence: according to the survey, two out of every three retailers directly correlate their technology to store success. Knowing that should empower you to create solutions aimed at increasing your customer’s success — whether that means helping them reduce expenses, minimize shrink/loss from theft (internal and external), or increase profits. If you’re considering technologies in addition to a cash register, receipt printer, cash drawer, and software, you stand a greater chance of fulfilling this important customer need.

Additionally, for the one out of three customers who doesn’t link technology to their own success, it’s critical that you, as a trusted advisor, educate those customers on the value you can provide. The survey results indicated that lack of tech funding, inadequate integration of systems, and poor associate- level execution are among the biggest obstacles for these retailers. All three items are areas where you can help. You can work with vendors and distributors to get your customers financing. If you can’t secure financing for your customers, it’s imperative that you show how new technologies can have a positive financial impact, so make sure your sales team is speaking ROI loud and clear during customer interactions. And, correct me if I’m wrong, but systems integration is kind of what you do. You should have no problem overcoming that obstacle. Finally, you definitely should be able to help train and install systems to get store associates maximizing your retailer’s tech investment. In short, two out of three retailers see the value in the solutions you provide. That third retailer who doesn’t should be able to be converted by a savvy solutions provider.

So, with everything going on in the world of retail, what are some tech areas you should be keeping an eye on? While the following list doesn’t encompass every opportunity in the retail vertical today, there are four areas that retailers listed as very important.

1 — Mobile POS Demand Is High
The NRF and KPMG report shows that 33% of retailers plan mobile POS investments over the next 18 months. For instance, due to the trend of smartphone- equipped shoppers, retailers are looking to adopt handheld technologies — both for store associates and customers. “Compared to the past few years, retailers have turned their attention to growth acceleration, with an emphasis on improved customer engagement strategies and tactics,” says Mark Larson, KPMG’s global head of retail. “Harnessing the vast amounts of customer data they have at their disposal to create unique consumer interactions will be critical, especially as digital sales grow. Clearly, the retailers who master the one-to-one customer approach, and who also leverage the full potential of e-and-mobile commerce platforms, will be in a much stronger position to gain wallet share.”

2 — Is The Cloud A Threat To Your Way Of Life?
I’ve talked to enough VARs to know that, from an in-store systems perspective, there’s a lot of worry around new cloud-based mobile POS solutions. If you’re one who’s worrying, I can’t tell you not to. So much is happening right now that you’d be foolish not to keep both eyes on this trend. However, Cisco’s Summer 2011 CloudWatch report revealed that 60% of United Kingdom retailers (who have a reputation for being a step ahead of their U.S. counterparts in terms of technology) have no plans to move applications to the cloud. That said, cloudbased solutions shouldn’t be discounted for two reasons. First, they typically give cash-strapped retailers the opportunity to turn their tech investment from a capital expense to a monthly operational expense. Second, as a monthly expense, it turns your customer’s IT purchase from a one-time event to a monthly recurring revenue stream for you.

3 — Everyone Needs Receipt Printers
In a recent special report, Matt Pillar, editor-in-chief of ISR, said that printer adoption is being driven by two factors — the first and most important is an upgrade cycle that’s been prolonged by the economy. “Had we returned to pre-recession consumer confidence and retail IT budgets recovered accordingly, we suspect printers would have dropped to second place for 2012, falling behind POS for in-store hardware investments,” he says. “The second factor contributing to the printer priority is the now ubiquitous functionality they afford in terms of color, graphics, and messaging capabilities. Many retailers are trying to speed up their printer upgrade schedules in an effort to add marketing and promotions to basic hardware life cycle justification as their rationale for adoption.”

4 — Video Surveillance Opportunities Abound
We’re in the midst of incredible advances in video surveillance technology, which is why video surveillance investments lead the pack of planned loss prevention and security expenditures for the third straight year of ISR’s survey. “Heading in to 2010, 51.4% of retailers planned to invest in video surveillance solutions, a figure that declined to 43.2% last year but climbed back above 47% for 2012,” says Pillar. “Reduced cost of megapixel technology, the pace of migration to IP cameras, and seemingly unlimited integration with POS and operations initiatives are driving home the value of video.”

Therein lies your opportunity. If you’re interested in giving your customers a total solution, you hold the keys to be able to combine video cameras, analytics, POS data, marketing info, and more. Traditional security dealers who focus only on cameras for surveillance can’t compete with the solutions you can create.

As you can see, there are a lot of interesting things going on in the world of retail.

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