The Future of Retail: What Technologies Will Help Take On Amazon?

  • by August 27, 2014
The recent story of brick-and-mortal retail seems littered with technologies that were going to save the industry from the onslaught of e-commerce —and then didn’t quite pan out. Remember how RFID (radio frequency identification) tags embedded in products were supposed to revolutionize the supply chain? And NFC (near field communications)--a standard for secure, very short-range exchange of information supported by numerous mobile providers and credit card companies-- appears to have fizzled. 

Instead, Apple has lead the way on an alternative, beacon technology, which uses small wireless sensors equipped with Bluetooth low energy (BLE) that can detect iPhones in store.

But it’s still not clear which technology will be the winner in helping retailers combat the competitive threat to their business model.  What is clear is that consumers today have a PC in their pocket- a smartphone—and more than half of them use that device to research and compare prices while standing in a bricks-and-mortar store.



What retailers need are technologies that help them transform a retail store experience into something as convenient and seamless for the consumer as a visit to Amazon. They should allow them to receive timely offers or make quick payments for example—but also providing retailers with as much customer information as an online visit.

Any technology that is going to succeed must meet the following criteria:

  • It must be low-cost andeasy to implement. There are interesting technologies out there such as facial recognition software that aim to help retailers understand their customers’ interactions and emotions on site, or to identify loyal customers as they walk in the door. But currently the cost of installing these technologies on a large scale is prohibitive. And any technology that takes an engineer to install it is not going to succeed in the retail business.
  • It must be standardized/phone-agnostic. NFC tags were very low-cost, so why did they fail? One reason is that manufacturers could not agree on a standard protocol for the chips that are installed in most (non IOs) mobile devices, so that not all tags could communicate with each phone. (By the way, there are still advocates for this technology who point out that some 500 million devices out there are already NFC compatible.) Any technology that wants to succeed must reach all devices, whether Android or IoS. 
  • It must be seamless and convenient for the consumer. As attractive as Beacon technology is, it requires Bluetooth to be activated for it to work. Yet many consumers are switching off Bluetooth on their phones to save battery power, so it won’t reach them.  Consumers also won’t likely respond to a technology that requires them to opt in to a lot of things. That is why Amazon’s one-click payment is so powerful.

At this point, no one technology out there exists that satisfies all these requirements.  That’s why I think that for the near future, the answer is for retailers to use a mix of different technologies to achieve results.  It may not sound sexy, but one of the simplest technologies out there today, already installed, is an infrasound sensor, which is part of a store’s existing hi fi system.

If you upload a sound over this system, it will identify phones within the store that have the store app installed in them. Used alone, it’s not terribly helpful. But if you then cross this information with data collected from the store’s WiFi system and phones using Bluetooth, you can gather more specific information on unique users.

Crossing different sources of data and analyzing enables businesses to build data about consumer intentions while within the store, opening up a host of possibilities.

The physical world and the digital world are merging and retailers need to respond in kind.  It will be exciting to watch over the next few years as this unfolds.







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