Apr 25 2014

Beyond POS: Retail Must Invest in IT Across the Whole Store

Technology is poised to transform the brick-and-mortar stores of the future.

The so-called death of the brick-and-mortar has been proclaimed far and wide, but declaring the total demise of the in-store experience might be premature.

There’s no denying the trends: People love e-commerce. Amazon, often touted as the king of e-commerce, generated $19.7 billion in the first quarter this year, a 23 percent increase in first-quarter sales over last year, according to Yahoo Finance.

In an attempt to become part of the digital revolution, many retailers have begun to embrace tablet-based point-of-sale systems. But the POS system is only the beginning.

According to Forrester, the entire store must be rethought and rebuilt with tech in mind. J.P. Gownder, vice president and principal analyst, explained the findings from the firm’s new report, “Infrastructure Will Drive The Retail Store Experiences Of The Future,” in a blog post.

In his view, there are two key areas where the brick-and-mortar store has a leg up on e-commerce:

  • Stores as social destinations. As one interviewee told Forrester, “In-store experiences can offer a quality of 'ceremony' — that is, the act of experiencing something you wouldn't easily get online. Stores can become social gathering places, pleasurable to visit from start to finish.” Technology plays a role in making some retail stores, like the Apple Store or Burberry’s flagship store, a destination to be explored and enjoyed.

  • Stores as efficient fulfillment centers. In other cases, retailers are evolving into service centers as omnichannel commerce brings together virtual and physical worlds. Yet the same in-store technologies are critical to bolstering service experiences for fulfillment of cross-channel sales.

To meet the promise of retail’s future, technology must become more than the responsibility of the IT department. Those responsible for infrastructure and operations must also become stakeholders in a store’s technology, Gownder says.

“[I]f I&O isn’t involved in every phase of the technology decisions in the store, in the usage models and dependencies, they won’t be able to manage the network effectively,” he says. “And I&O can separate hype from fiction when evaluating emerging, new technologies as well, helping the business make innovative decisions that can perform for customers.”

The in-store experience relies on wireless, mobile and wearable technologies. Think RFID tags, NFC devices and Internet-enabled smart devices.

Already, some retailers have begun to forge ahead with bold, new in-store experiences built with IT. David Dorf, senior director of technology strategy for Oracle Retail, points out in a guest post on Forbes that “Nordstrom, Walmart, Staples, Home Depot and most recently John Lewis Partnership have all created research labs, showing an impressive commitment to new mobile apps, big data analytics and providing a first-rate customer experience.”

Many people consider connectivity more of a utility than a luxury these days, and that perspective is starting to trickle down to retailers as well.

Gownder writes that one IT leader at a luxury retailer recently confessed to him that, “The network is so critical to us that if it were to go out, it's the equivalent of the store losing power.”

It sounds like downtime is fast becoming a problem brick-and-mortar retailers will need to grapple with as much as their e-commerce counterparts do.

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