While there are many consumers who feel as if they are being enabled by technology and are eager to try the latest app or gizmo, others are far less positive and find themselves being led by some technology in ways that makes them feel uncomfortable.
There is a similar disparity among retailers, which like consumers, have their own personal DNA which creates the shape of the business and, consequently, its attitude towards technology.
However, depending on their 'genes', retail businesses generally fall into two broad categories: early adopters or followers. For the tech savvy consumer, there is often frustration that their favourite retailer is not as technology advanced as they are. With many younger consumers now digital natives, if retailers want their custom they will have to meet them on their terms.
Deciding on which of the myriad items of technology within the retail eco-system to choose is a daunting task and the differences in adoption rates really depends on the type of technology involved, whether it is going to solve a functional issue or whether it is something that will add to the customer experience.
Take, for example, the issue of payment. Most retailers understand that the first battle ground in the fight to win more customers' loyalty is in the retail basics i.e. getting the hygiene factors right, like ease of shop and payment processing.
Therefore, one would assume that every retailer would be investing in ways to make checkout easier whether online or in-store. But we know from research in the shopping mecca that is Oxford Street, that only a tiny proportion of retailers, just 3%, are offering self-scan checkouts or mobile point of sale.
The reason we are seeing such poor adoption rates in this type of functionality which most consumers now treat as wallpaper, maybe because it does not pass the old litmus test: ROI.
Most retailers will still want to see the business case before making a decision about rolling out new technology. It is still all about: how much is it going to cost and how much benefit (typically sales and profit) will it deliver? So that's probably why we can see higher adoption rates within speciality branded retailers such as Apple, Nike and Burberry, as it's much cheaper for these retailers to deliver a new technology-based customer experience when they are operating from a limited number of stores; it's much more difficult for a mass market retailer like New Look, Topshop or Sainsbury's, which all have hundreds of stores up and down the country. These retailers must be convinced of the merits of the technology because the risks of getting it wrong are much more significant.
Where we are seeing good levels of adoption of easier payment technology there is a clear business case. Take for example contactless payments i.e. 'tap and go' technology. Adoption has been highest in retailers with a large estate such as Marks & Spencer Simply Food or Pret a Manger. In these cases the frequency of purchase of their customers is significantly high (often four or five times per week) and, of course, the technology is relatively cheap, proven and crucially it allows these retailers to process more customers within a shorter period of time: a strong business case.
Another issue that may be impacting on adoption rates is complexity. Retailers have to consider the impact on their current operation and the capability of their employees to use the new technology. Consider the impact that contactless payment or self-scan would have on many of the clothing retailers on Oxford Street. Most have tags on their products for security reasons which would have to be removed to support self-scan.
How does a retailer then provide the security required to prevent significant stock loss? Further, what training would staff need to be given to support this and how might their job profiles change?
Not every fashion retailer is going to introduce technology that allows customers to compare the feel of different fabrics (linen, or silk) through vibrations on a mobile phone; yet they need to be aware of what is happening and consider each of the different opportunities and decide what's hot, what's not, and what should be mothballed for future use.
So while the reason for limited adoption rates across the retail landscape are complex and varied, it's also clear that more and more consumers are becoming comfortable with technology in their lives. So to help decide which technology to invest in, retailers need to ask themselves the following questions, in this order:
- How do I provide the basics/hygiene factors, i.e. quality of product, cleanliness, online security etc more efficiently…?
- How do I make the customer experience more convenient, i.e. ease of shop, home delivery, ease of payment etc…?
- How do I make the customer experience more compelling, engaging or entertaining?
Matching the answers to these questions, against the overall business strategy, should more easily highlight the technology that will be most relevant to their customers/market, as well as the competitive landscape and how cutting edge they want to be.