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Market Views
Retail
Market Views

## Highlights

- Old school loyalty programs are on their way out
- Social is growing as part of the omni- channel mix
- Retail is now borderless
- IoT will have a significant economic impact on retail
- 2.5 billion new users will come online in next 5 years
- 84% of smartphone owners use phones instore
- Ecommerce will account for 8.8% of all retail by 2018
- 26% of purchases are impacted by social

## Digital Journey

CUSTOMER EXPERIENCE
  Whether online or instore, customers expect a rich, personalized and accessible shopping experience that is a seamless experience across physical and virtual stores. Furthermore, retailers need to adapt to the increasingly rapid change in customer preferences and context.
BUSINESS REINVENTION
  As well as reinventing their brand identity, retailers are also reinventing their high street stores, transforming them to provide a real experience of their products and brand. While only a small part of the product range is physically present, virtual stores, meanwhile, show it all.
OPERATIONAL EXCELLENCE
  To help them succeed in today’s increasingly diverse and competitive environment, retailers are looking for new ways to improve efficiency and reduce cost. Both instore and online, they’re looking for more efficient ways to engage with customers and provide self-service access to information.
TRUST AND COMPLIANCE
  Retailers need to build trusted relationships with their customers to encourage them to share personal information. Without it they will struggle to understand and target individual’s needs and desires. All customers, however, expect retailers to safeguard that data.

#### Annick Lemaylleux

Vice President Head of Global Retail Market

> To help them succeed in today’s increasingly diverse and competitive environment, retailers are looking for new ways to improve efficiency and reduce costs. They also need to provide their customers with a consistent high quality experience both instore and online, engaging with them in a more personalized and meaningful way.

Technologies in the Digital Journey
Technology | x | y | x (phone) | y (phone) | Impact | Range | Section | Keys | Description
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Geo-location technologies | 95 | 14 | 90 | 29 | Mainstream | 2016 | Low | experience | ESLs also provide a very precise global product positioning system since each product in the store is individually labeled. If a customer is looking for something they can’t find, a product search on the store map will find easily the product thanks to the geo-located ESL enabled by geo-location technologies. A NFC tap on any nearby ESL will identify their exact location in store and direct them toward the product they’re looking for.
5G systems | 49 | 55 | 70 | 51 | Emerging | 2019+ | Medium | experience,excellence | The next step in wireless communications technologies, 5G systems will allow retailers to enhance the mobile customer experience with high bandwidth videos and other media formats that are more engaging. With more bandwidth available they can deliver a true omni-channel experience wherever the customer is: at home, out and about or in store.
Advanced data visualization | 59 | 51 | 63 | 68 | Adolescent | 2018 | Medium | experience | Data can be quickly turned into a real-time immersive virtual 3D layout of store thanks to 3D visualization technologies. A library of product images builds a digital replica of the store, paving the way for dynamic merchandising and compliance analysis for every store. Workers can rapidly identify where shelves are getting low or even empty. Around the store digital signage is also leveraging 3D visualization technologies, to showcase products not physically located within the store and also turn the shopping experience into the entertainment experience that is intriguing customers and increasing footfall. Fans of sports brands, for example, move around the virtual stadium as they watch their favorite athletes compete.
Augmented reality | 65 | 40 | 70 | 54 | Adolescent | 2018 | Medium | experience | In stores, augmented reality lets the customer try items on in a virtual changing room. As well as allowing the customer to see how it will fit, the technology offers the customer additional information about the product. At home, augmented reality allows the customer can see how the product fits in his own environment or access additional information on a product from a paper catalog. Pre-checking that an article of clothing fits the shopper well, for example, reduces the volume of returns. It also provides additional marketing opportunities and increased consumer interaction. New mobile point of sale solutions are simplifying and speeding up the payment process while reducing cost and risk. In the store these include mobile wallets, cloud mobile and mobile card payment.
Beacons | 91 | 19 | 80 | 64 | Mainstream | 2016 | Low | experience | Indoor positioning systems (IPS) such as beacons help to locate items and people in the warehouse and in store using radio waves, magnetic fields, acoustic signals, or other sensory information collected by mobile devices. Instore they enhance customer experience by providing personalized videos, offers and more on the nearest screen to the customer. Furthermore, they enhance the shopping experience for the disabled customer by providing all these directly to their own accessible mobile device.
Biometric technologies | 76 | 24 | 76 | 32 | Early Adoption | 2017 | Medium | trust | Biometric technologies – including contactless credit cards with built-in fingerprint scanners and selfies that the store checks against a stored photo of the customers – are making the payment authentication process stronger and easier. Companies are experimenting with other forms of biometrics such as iris scan technology, but there are concerns about customer acceptance with this and other forms of biometrics.
Cloud Service Integration | 59 | 21 | 35 | 46 | Adolescent | 2017 | High | excellence | As retailers move their point-of-sale, inventory management, supply chain, customer relationship management and other key systems into the cloud, Cloud Service Integration ensures tight integration between all these various cloud services. Cloud-based federated identity provides secure federated access to both operational systems and customer information across systems. Trusted information brokers are poised to act as the future central verification service, eliminating the need for individual registration and authentication of each service.
Context-rich systems | 66 | 19 | 50 | 42 | Early Adoption | 2017 | High | experience,excellence | Working in tandem with advanced analytics, context-rich systems bring together insight on the wider context to help retailers proactively align content with the consumer’s needs. These systems may, for example, adjust content sent to an individual customer or digital signage based on anything from the weather outside to current events, device-type, network capabilities and more.
Distributed analytics | 69 | 38 | 85 | 22 | Early Adoption | 2018 | Medium | experience,business,excellence | To engage on a personal level with their customer, retailers need a single up-to-date 360° view of the customer, their purchasing history, needs, desires and their behaviors. Distributed analytics provides a comprehensive view of the customer by analyzing data in situ across heterogeneous data sources. This single source of the truth helps stores ensure every interaction – whether digital or with a human store assistant or customer service representative on the phone – is consistent, relevant and meaningful.
Edge computing | 52 | 30 | 65 | 33 | Adolescent | 2018 | High | excellence | In the future companies may leverage edge computing to both process relevant data more quickly and ensure scalability within the smart connected retail environment. Indexing data close to the point of capture, for examples, lightens the load of centralized servers while making it highly accessible to the systems that need it soon after capture.
3D Printing | 40 | 10 | 54 | 15 | Adolescent | 2018 | Transformational | trust | Some personalized products can be created in store thanks to 3D printing: a bespoke toy, item of footwear or ornament, for example. The customer might design it at home and then collect the finished product from the store an hour later.
Hybrid cloud | 83 | 17 | 52 | 62 | Adolescent | 2016 | Medium | experience,excellence | Retailers are looking to enhance that customer experience further; to encourage ad-hoc purchases based on the current context. Hybrid cloud allows companies to augment customer data stored within their own private clouds with third-party information – such as news on trends, hints and tips or even weather forecasts – so they can offer the customer timely, relevant suggestions.
Internet of Things | 62 | 8 | 37 | 14 | Early Adoption | 2017 | Transformational | business,excellence | Embedded sensors in shelves, packaging and more together form the growing Internet of Things (IoT). Connected systems, processes, workers, customers, stock and shelving transforms the store into a smart connected retail environment equipped to respond in real time to changes in customer demand and behavior. In the future it will also enable automatic purchasing, for example. With products and customers located in real time, the merchandising becomes dynamic. Electronic shelf labels (ESLs), for example, allow retailers to display and update prices remotely across the store, without the need for staff intervention at the shelf edge – generating significant and recurrent operating cost savings. The ESLs not only allow dynamic pricing, varying price by time of day, but can also enable interaction with customers’ smart phones to access product information or enable personalized offers.
Mobile and social media apps | 79 | 12 | 70 | 29 | Mainstream | 2016 | High | experience,business | The cloud is a key enabler for business transformation in the retail industry. It allows retailers to offer customers a truly omni-channel experience across all channels and locations. Whether the customer engages with the retailer in a physical, on the PC or through mobile and social media apps, the systems they interact with and the data these systems use will be the same.
Near field communication | 88 | 16 | 75 | 42 | Mainstream | 2016 | Medium | experience | Stores’ use of near field communication (NFC) is expanding rapidly from its initial adoption as a means of secure contactless payment. Customers tap an NFC tag on a table, shelf – or anywhere else it can be embedded – with their NFC enabled smartphone or smartcard to receive advertising, offers, coupons, loyalty points or even information on a specific product.
Pattern-matching technologies | 74 | 42 | 81 | 37 | Adolescent | 2018 | Medium | business,trust | Pattern-matching technologies help companies leverage the vast volumes of data available today to identify hidden customer habits, identify untapped marketing opportunities and better understand their customers – as well identify and then address potentially fraudulent behavior patterns, including potentially fraudulent behaviors.
Prescriptive analytics | 62 | 38 | 67 | 49 | Adolescent | 2018 | Medium | experience,business,excellence | By analyzing a comprehensive up-to-the- minute picture of the customer and their context combined with well-understood customer habits, expectations and buying behaviors, prescriptive analytics suggest which promotions the retailer should offer a customer to maximize their shopping basket. Prescriptive analytics also has a role in helping retailers gauge the expected future profitability of each customer relationship. Online it helps with optimizing checkout-funnels and maximizing conversion rates.
Privacy-enhancing technologies | 55 | 45 | 55 | 59 | Adolescent | 2018 | Medium | trust | As customers share more information with retailers privacy-enhancing technologies (PET) control disclosure of data, helping establishments to manage privacy risk by ensuring compliance with data protection legislation and regulation.
Robotics | 85 | 15 | 59 | 57 | Early Adoption | 2016 | Medium | experience,excellence | In the warehouse, robotics helps with laborious manual tasks such as order picking. Instore, always abreast of the real-time location and current stock levels of all of a shop’s wares, robots become a useful source of information and can be used in customer service to engage with customers and help them find items.
Self-adaptive security | 72 | 44 | 77 | 39 | Adolescent | 2018 | Medium | trust | With retailers managing and sharing more and more of their data and services securely through their private clouds, the dynamic access control enabled by self-adaptive security ensures staff, partners and customers have access to the information and systems they need to access, but only when they need it.
Sentiment analytics | 93 | 21 | 90 | 71 | Mainstream | 2016 | Low | experience,excellence | Social media provides customers, retailers and brands with more than just an opportunity to express needs, desires and concerns; social is also becoming a new peer-to-peer shopping platform. Sentiment analytics allows retailers to obtain valuable feedback on consumer satisfaction and ideas for innovation.
Virtual assistants | 83 | 49 | 89 | 48 | Adolescent | 2018 | Low | experience | Customers are greeted by a virtual assistants as they enter the store. The avatar provides the customer voice- or text-based information on their mobile. It not only responds to customer queries, but advices the customer about the length of the queues, where to pay and more, creating a novel interaction that draws the customer in. For the retailer it helps to minimize overcrowding in specific regions of the store.
Wearable computing | 86 | 31 | 88 | 41 | Early Adoption | 2017 | Low | experience,excellence | Warehouse employees can track a product hands-free through modern wearable devices. These wearables infuse insights with the real-world, blurring the lines between digital and physical. They provide the same detailed information on stock levels and location that the robots have available to them.

Radar View

BUSINESS IMPACT
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Adolescent
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Click on the radar points to see technologies details
Click on the radar points to see technologies details
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