Innovation in retail is happening everywhere, from mobile in Africa to shopping walls in South Korea. Jessica Twentyman reports.

World Map

Retail tends to be at the coalface when it comes to new technology – being so exposed to consumers and their fads means the pressure is always on to keep up with the pace of change.

For many, the biggest challenge is ensuring business systems are up to scratch and as efficient as possible, but many retailers all over the world are still going above and beyond to produce exciting, innovative technologies.

In the UK, Tesco and Asda have done much to shape how other big supermarkets address mobile audiences with a range of apps and services such as Tesco’s GPS-enabled app that tells customers where in a store a certain product is. And several British retailers – including Argos and Halfords – have integrated their own internal stock management systems with Google Maps, to create tools that allow online customers to discover the location of the nearest physical store to them that has the product they want to buy in stock.

What is interesting about the latest round of technology investment is how consumer-focused much of it has become. At the annual National Retail Federation’s Big Show in New York in January, analysts from market intelligence firm IDC Retail Insights interviewed 60 attendees on their retail technology spending predictions for the year. They found much of the growth in worldwide retail technology spending – which they forecast will reach almost $85bn in 2012 – will focus on putting the customer “at the centre of an omnichannel experience”.

Retailers are recognising that the consumer is in charge, and this means a whole gamut of innovations from mobile commerce to new ways of paying – the pressure is on to try new things.

A solid base

While there are plenty of exciting advances, IT teams must deal with day-to-day requirements first. Retailers globally must concentrate on getting retail technology infrastructures in place – the internal running of a retail business is of course crucial. Everything from financial accounting to stock management syste ms need attention. In some markets, however, there are some cutting-edge projects under way, and they invariably have the customer firmly in their sights.

The problem retailers face is that today’s customers are far more tech-savvy than before. A recent report from technology provider NCR explains what retailers are up against: “Equipped with modern technology like mobile phones, smartphones and tablet computers, consumers today have almost unlimited access to information. Consumers use these technologies to gather information across different online and offline information channels.”

NCR surveyed 1,600 consumers in France, Germany, Italy and the UK and found that more than a quarter (27%) who intend to purchase an item via an online channel also visit the physical store to take a closer look at the product. And more than half (51%) of those who intend to buy in-store visit the retailer’s website to research beforehand. Much of the pressure on retailers today is coming from changing shopping patterns.

As customers get more sophisticated in their use of technology, their expectations rise too. Today’s shoppers want convenience and enjoyable retailing experiences – and preferably both. 

US

For children who can’t decide whether they would rather dress as Snow White or Cinderella, Disney is here to help. Last year, it tried out an augmented reality mirror in kidswear outlets at Disneyland, its California-based theme park. The mirror is a large, high-definition screen with a hidden camera that displays video of the user, tracks their movement and is able to overlay virtual clothing onto their body. The Disney mirror simulates cloth physics and allows the virtual outfit to move naturally with the viewer’s body. For a slightly more mature audience, department store Macy’s also debuted a 72-inch ‘magic mirror’ linked to an iPad, which allowed female shoppers to digitally try on outfits. 

UK

When it comes to customer convenience, one of the benefits of living on a relatively small island is the potential for rapid delivery of goods and services ordered online. For customers in the cities of London, Manchester, Leeds, Glasgow and Edinburgh, and more recently, Aberdeen, Belfast, Birmingham, Bristol, Cardiff and Liverpool, the window of time between order and receipt could be as little as 90 minutes if they are shopping online with Argos or with Aurora fashion brands Karen Millen, Oasis, Coast and Warehouse. These retailers use delivery service Shutl, which works by aggregating the capacity of local same-day couriers into a web-based platform integrated with retailers’ ecommerce platforms. This means the couriers deliver online orders from local stores and, because distances are shorter, the process is faster and cheaper than dispatch from a centralised warehouse, benefiting both retailer and customer.

What colour would best suit your living room walls – pebble beach or cashmere? DIY fans planning a home makeover can now visualise how the finished project will look with a new interactive virtual room planner developed by Homebase and its technology partners, Qmatic and HintTech. Customers can upload a digital photo of their living room – or any other room needing a lick of paint, fresh wallpaper or new flooring – on to a 32-inch digital interactive touchscreen in-store and personalise it with products sold at Homebase to create their dream look. The pilot was launched to coincide with the opening of the DIY retailer’s store in Aylesford, Kent. In the first month, 1,605 interactions occurred and 428 room designs were printed. The retailer has plans to roll out the system to more stores.

Nigeria

Mobile payment is just taking off in the UK but in much of Africa it has been around for years, and countries such as Nigeria and Kenya are leading the way. Many Africans are being assimilated into the formal banking sector, opening accounts and gaining access to services via mobile technology. Mobile ownership has grown much faster than direct access to bank accounts over the past decade and as a result using phones to pay bills or for everyday goods is the norm. Services similar to Barclaycard’s new UK app Pingit, which lets pre-registered users transfer money via mobile phones by linking a certain phone to their bank account, have been widely used in Africa for years.

South Korea

Tesco’s virtual store on the Seoul subway, launched in August 2011, has proved so popular with South Korean shoppers that the retailer now has plans for an extended roll-out. Instead of insisting that busy commuters drop by a Tesco Homeplus store on their way into work or on the way home again, the grocer brings the store to them, enabling them to make their purchases en route. Shoppers browse the wall-mounted screens in subway stations, which are designed to look like supermarket shelves, and select goods by scanning the QR code of any product they would like to purchase, using their smartphone. To use the virtual store, they must first download the Tesco Homeplus smartphone app – which, according to Tesco, 900,000 people have done less than a year after its launch.

Japan

At Japanese electronics retailer Yodobashi, calculating incentive payments to 5 million loyalty cardholders used to take up three days out of every month. Today, the task takes two seconds according to executives at SAP, the company that supplied the Yodobashi in-memory database technology. With in-memory analytics, data is kept in the main memory of a server, instead of across a number of storage disks on a separate machine. By keeping data closer to where it is ‘crunched’, in-memory technology solves the problem of how long it takes traditional business intelligence technology to transform raw data into meaningful information that managers can actually use to run their business. Yodobashi was among the first companies worldwide to start using SAP’s Hana following its launch in December 2010.