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Author's profile photo Stephen Sparrow

Five Retail Trends to Look for in 2014

Forrester Research recently released its top 10 tech trends for 2014 and beyond, summarized in a slide show on Forbes by Peter High, an advisor to CIOs.

/wp-content/uploads/2013/12/futureretail_352331.jpgWhile it’s an intriguing look at the future of technology, it could just as easily have been titled “Top Retail Trends for 2014.” That’s because many of the eventualities the market-research firm foresees for IT apply equally to the retail industry—as evidenced by recent comments from retail experts at SAP.

Here’s a look at five of the top tech/retail trends for 2014 and beyond:

Digital convergence erodes boundaries.

According to the Forbes piece, “Physical and digital worlds are converging. As a result, consumers expect uniform service, whether they are in the physical world or if they are in the digital world.”

That’s especially true in retail, where consumers demand the same experience in every channel, whether in-store, online, mobile, or some combination. “The good news is that technology now exists to serve a market of one, to provide personalized customer service that starts with a mobile device, continues throughout the shopping experience, and ends with home delivery,” says Randy Evins, retail industry principal for SAP.

A key piece of that technology is a repository of customer activity. “It’s a single place for capturing and analyzing all information relevant to each individual customer,” Evins explains. “That includes who [the customer] is, where and when she shops, what she buys, and what else she might buy. It’s combined with data such as what’s on promotion, what’s in inventory, and what external factors could affect supply and demand.”

Digital experience delivery makes (or breaks) firms.

“A great digital experience is no longer a nice-to-have,” Forrester notes. “It’s a make-or-break point for your business as we more fully enter the digital age.” That’s increasingly the case in retail, where online shopping is surging. During the recent holiday season, Black Friday activity slid more than 11 percent, while Cyber Monday growth topped 20 percent, according to some estimates.

“[Retailers] have been challenged by proliferating channels,” says Matt Garvis, retail industry advisor for SAP. “Customers are visiting your website, and accessing and sharing product information on mobile devices, as well as coming in to your stores. The challenge is to hear each customer’s story as he or she moves across those channels.” But, Garvis says, “It’s certainly achievable.”

How? “Customers leave a trail of breadcrumbs behind them as they shop online, on their mobile devices, and in the store. You need to be able to follow those breadcrumbs,” advises Colin Haig, SAP retail program principal.

“By capturing and leveraging relevant information, retailers can tailor the experience to individual customer needs and tastes,” Haig continues. “And customers really do respond: research suggests that the upper half of your customer base will spend up to 50 percent more with you if they receive a personalized offer.”

Firms shed yesterday’s data limitations.

“Firms that embrace big data concepts, open data, and adopt new adaptive intelligence approaches are creating next-generation smart systems that overcome limitations and create disruptive business innovations,” according to Forrester. To that end, Forrester says it’s imperative to leverage “predictive apps able to sense their environment and respond in real time, anticipate user action, and meet users in their moment of need.”

Going forward, retail will be all about that kind of Big Data—and the ability to sense and respond. “Cloud computing, data analytics, and in-memory computing are crucial tools in combining and leveraging … social data with POS data, loyalty data, and syndicated data,” explains Craig Downing, director of global cloud marketing for SAP. “In fact, that’s a perfect example of Big Data in action—millions of bits of data that, with some sophisticated analysis, can reveal true insights. Once you have that, you can begin to understand how pricing, merchandizing, and couponing strategies can alter your customer experience and your margins.”

Sensors and devices draw ecosystems together.

“The Internet of Things will move from hype to reality with the ubiquity of connectivity and proliferation of devices,” the Forbes piece predicts. That will revolutionize traditional “spray-and-pray” promotional campaigns.

We think of machine-to-machine (M2M) communication as applying primarily to manufacturers or industrial companies monitoring equipment, say, or consumers connecting home systems to the Internet. But the Internet of Things holds vast promise for retail. By capturing continuous, real-time streams of data from mobile devices, online customer activity, in-store WiFi routers and video cameras, installed consumer products, and a growing array of “wearable” computers, retailers will gain unprecedented insights into customer behavior and desires.

“Wherever you touch the customer, regardless of where they are, you have opportunities to differentiate yourself from the competition and deliver a unique brand experience,” says Mark Ledbetter, global vice president of retail strategy for SAP. “These include innovations like mobile apps, real-time promotions, micro-segmenting, and geo-sensing to follow customers when they come into the store.”

To that last point, Ledbetter reports that SAP has “conducted pilots that show that if you make a real-time digital offer when customers come into the store, they’re eight times more likely to redeem the offer compared to a promotion at any other place or time.”

Firms learn from the cloud and mobile.

Traditional systems need to be optimized to take full advantage of the cloud, the Forrester report states. Similarly, mobile initiatives need to be integrated with your broader, omni-channel strategies.

Cloud computing and mobile platforms hold great promise for retail, enabling retailers to capture and analyze customer data, and to make highly relevant offers, all in real time.

“Cloud computing lets you capture and deliver customer data to and from every touch point at the moment you need it,” Garvis says. “So … you know exactly what coupon, game, app, text message, or other means of engagement to use with [each customer] specifically.”

As for mobile, the bourgeoning technology is a key enabler of retail sales associates. “Your entire business system should be available in their pocket or on their belt, wherever they happen to be,” Haig believes. “That requires mobile devices, wireless infrastructure and, most important, mobile enabling of enterprise systems.”

Haig concedes that there are capital costs associated with investments in cloud and mobile technology. But, he says, “if you see a 20 percent, 15 percent, or even 10 percent sales increase, the return on investment could come in mere months.” That’s a future any retailer would like to see.

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      Author's profile photo Former Member
      Former Member

      Hi Stephen,

      thanks for your article, great information! What do you think about the battle between local smaller stores and large chains? Do you think there's any chance for smaller boutique stores to compete against the big fish, i.e through specialization and higher quality or through provision of quicker shipment times at a local level?

      How will a small retailer survive the power of mass production and big scale discounts?



      Author's profile photo Stephen Sparrow
      Stephen Sparrow
      Blog Post Author

      Hi Jamie

      The survival of Main Street retail has multiple facets to it. Two examples below -

      Branding the shopping experience is a critical factor (competing with WalMart on price should not be a core strategy).  On January 14, Lori Mitchell-Keller (head of SAP’s Industry Business Unit)  will be on stage at NRF with Life is good® co-founder Bert Jacobs, discussing company culture and core values.  Creating and delivering a positive brand experience (across multiple channels!) is a key differentiator to any retailer – large or small. The customer’s joy and satisfaction in experiencing your brand is what brings them back.  Technology can have multiple plays in creating and enhancing the brand experience for retailers large and small, but expressing company culture and core values are key to connecting with your customer. If you get it right, life can indeed be good.

      Another key area for the survival and growth of Main Street Retail is regulations that could negatively impact retailers large and small. Unfortunately for smaller retailers, the impact of the regulations to their bottom line can hit harder than with larger retailers. The NRF spends considerable time on the Hill, lobbying congress to consider the needs of retailers in their deliberations.  Areas like sales tax fairness (internet sales tax) and healthcare reform are two areas key to the success of small retailers (read more at

      All the best


      Author's profile photo Former Member
      Former Member


      thank you very much for your reply. Looking forward to January 14th!