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While the holiday shopping season doesn't kick off till the fall, the behind-the-scenes tech preparations for the season are already heating up this summer — and those technology deployments should be even bigger and better this year.
So that retailers can be focused on selling during the frantic holiday season, they have to start now to make sure their technology deployments, from digital signage to mobile payments to self-service and kiosks, are set and ready to go.
And a recent study suggests that retailers will be spending even more on high-tech this year in an effort to steal a march on competitors and surf the bleeding edge of customer engagement technologies.
From basic POS system repairs to digital signage installations, retailers are tackling a variety of tech projects now in order to prepare for the holiday rush in Q4, according to tech service company OnForce. Because when the rush starts, these repairs and upgrades will mean downtime they can't afford, especially at the register. And their deadline isn't Black Friday — it's Halloween, which generated almost $7 billion in retail revenue last year.
And according to new research from the Computing Technology Industry Association, 63 percent of retailers expect to increase their spending on technology solutions in the coming year.
OnForce is an online platform that connects businesses with a nationwide network of independent field technicians to fulfill work orders across a broad spectrum of tech deployments, with a heavy dose of retail tech.
"Retail is a big part of our business, because retailers have so much technology in distributed locations that you can't just have an IT department and have them handle it all, unless you're going to fly them all over the country and that's just not cost effective," said OnForce COO Bill Lucchini in a recent interview.
OnForce is "getting very busy" right now, Lucchini said. Retail service calls started trending upward in late May, he said, and the company saw a 30 percent jump in the last few weeks. And in July and August "it'll be on fire," he said, with a peak in August.
"It's always a very interesting time of year for us. In retail, certainly by Thanksgiving, nobody is messing with their technology unless it's a repair. They are locked down and focused on selling, and really quite often that happens before Halloween, so in mid-October or something retailers start to lock down," Lucchini said.
The season moved late last year, with projects going up into November, perhaps because of the uncertain economy, he said. "But really in the summer, before you get back to 'Back-to-School' time, while shopping is a little slower, there is a huge focus on 'What is my technology plan for the holiday shopping season?' and 'How am I going to get that installed and set up?' so what we see is a big burst of work where retailers are going in and adding more and more flat panels; we see that as a growing segment of the work that they're doing."
That dovetails with the new study from CompTIA, the recently-released "Retail Sector Technology Adoption Trends Study." According to the report, 72 percent of the 500 U.S. retailers surveyed rated technology as important to their business
Thirty-three percent of respondents say that they use digital signage, and another 20 percent intend to do so in the coming year. Responses to the survey indicate that digital signage is used to share sales and promotional announcements as well as other messages to spur direct engagement with customers, according to a spokesman for the organization.
Geo-location tools also are a fast-emerging technology in the retail segment. Currently, 20 percent of retailers use geo-location technologies and other location-based solutions to reach customers — possibly as a way to thwart "showrooming," or visiting a brick-and-mortar store to check out a product, but then waiting to purchase the product at an online checkout.
The study also suggests that retailers are also experimenting with mobile payment systems. Currently,13 percent of retailers are using mobile payment systems, but another 19 percent plan to deploy the technology over the next 12 months.
This growing interest in technology calls for retailers to establish a broad-based technology strategy that addresses foundational needs, according to Tim Herbert, CompTIA vice president of research.
"Reliable wireless connectivity, robust security, quality end-points, data backup and other IT basics cannot be overlooked by retailers anxious to add new capabilities," Herbert said in an announcement.
And when it comes to customer self-service technologies, the study's section on digital signage shows that 30 percent of retailers said they intend to use digital signage with a touchscreen display that allows customers to interact with content. The same percentage — 30 percent — plan to use digital signage for entertainment (e.g., movies, TV) to keep children or others occupied while parents shop.
In the section on mobile payment/checkout technologies, the study indicates that 19 percent of retailers surveyed currently use self-service, in-store kiosks; another 12 percent plan to deploy in the next 12 months. Also, 13 percent currently support mobile checkout via payment-enabled smartphones or tablets and 19 percent plan to do so in the next 12 months.
And where before much of the digital deployment may have been scattershot and rushed — in an effort to just get a screen hung and running, or to just get the technology into the store — retailers are taking much more strategic and integrated approaches these days, according to Lucchini.
"So there's a huge amount of innovation that's happening in that retail experience, and I think retailers understand in a tough economy with tough margins, that having the edge on that customer experience has a lot to do with the technology you employ," he said. "And these are big investments; they have to be very careful about what they choose, but none of them are staying idle, so we're seeing a lot of work."
For more stories on this subject, visit the Retail research center.