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Top Innovations that Changed the World of RetailMonday, August 25, 2014 > 09:40:21
(Retail Info Systems News)
Retail today is an exciting hotbed of innovation with emerging technologies like contactless payments, mobile commerce and the Internet of Things promising to transform the way we do business. In many ways it's one of the most vibrant sectors to work in right now, however this focus on innovation isn't a new development. Innovation and retail have always gone hand in hand.
Consider the barcode for instance. Just over sixty years ago, a series of black and white lines promised to completely overhaul how retailers of the day managed stock and served shoppers when it was patented in 1952. However, not everyone agreed. Skeptical retailers were hesitant about embracing the barcode, thinking that it would be less accurate than shop workers typing in prices manually.
It took more than 20 years to convince retailers to give the barcode a try, with the first store using one to scan a product 40 years ago in June 1974 in Cincinnati. The first product scanned – a packet of Wrigley's Juicy Fruit chewing gum – now sits on display at the Smithsonian Institution in Washington, DC.
Technological advances and changes in consumer behavior empowered by new devices and media are continuing to transform the face of retail today. Below are nine more innovations that have revolutionized the retail experience over the past 40 years or are just starting to.
Online Marketplaces: Consumers have shopped at markets for millennia. In ancient Egypt, merchants would gather at quay sides along the Nile to tap into the passing trade of sailors and exchange goods for grain. The invention of money was undoubtedly a major game changer; however the invention of the web 25 years ago has had perhaps the biggest effect on retail businesses to date. This year, more than $1.5 trillion will be spent online by shoppers worldwide, and that figure is still rising.
The huge adoption of the web for shopping has been helped in part by the development of online marketplaces that enable retailers to sell internationally, market to new audiences, and compete with established players in the market. These online markektplaces are helping to level the playing field for smaller traders online, offering access to a much larger customer base and the infrastructure needed to sell online.
Social Media: One of the more recent developments to change the world of retail is social media. Over the past decade, sites like Facebook, Twitter and Pinterest have transformed how consumers communicate with retail businesses and research what to buy. More than 40% of consumers use social sites to recommend products that they have tried with others, according to our research. Aside from influencing consumer buying habits decisions, social media offers retailers the ability to crowd source opinions on new products and services. With Facebook boasting more than a billion members since it launched in February 2004, it's clear that social media is here to stay.
Mobile Commerce: Half a billion consumers will use a mobile or tablet device to make a purchase this year, accounting for over $204 billion in sales. This figure is expected to more than double to $516 billion by 2017, when mobile commerce will celebrate its 20th birthday. A mobile phone was first used to make a purchase in 1997, in Helsinki, Finland, where two Coca-Cola vending machines were set up to accept payments via SMS. Now, mobile is becoming an increasingly important channel for retailers to interact with, support, and sell to shoppers both in-store and online through mobile apps and websites.
Big Data: The analysis of huge data sets might seem like a fairly recent development, empowered by advances in computing, but in fact it has been going on for decades. In retail, the 'Eureka moment' came when U.K. supermarket Tesco launched the first card-based loyalty program able to identify interesting patterns in consumer behavior, in February 1995. Nearly 20 years later, retailers worldwide are now able to acquire and analyze more data than ever before, and insights garnered for this data are influencing all aspects of retail business from stocking decisions through to marketing promotions and store layouts.
The Internet of Things: The idea of everyday objects being connected to the internet was first proposed by Mark Weiser in September 1991 in an article for the Scientific American magazine. Just over 20 years later, the Internet of Things (IoT) is a reality, with the global market for connected objects amounting to $1.9 trillion last year. As more objects get connected, this market is expected to hit $7.1 billion by 2020. For retailers, the IoT opens up a huge opportunity to streamline inventory management and the supply chain, and enhance the in-store customer experience, while maximizing the value of retail space.
Beacons: In 1994, researchers at Ericsson invented a means of connecting mobile devices to accessories wirelessly, which later became known as Bluetooth. Twenty years later, a lower power version of Bluetooth is being used in Beacons to transmit location-based messages to mobile devices. Aside from helping retailers to target shoppers with incredibly relevant offers and promotions, based on a shopper's location within a store, Beacons offer traders a wealth of data and new insights into shopper behavior that could make for smarter stocking decisions and store layouts.
Self-Service Checkout: Invented by Dr. Howard Schneider to reduce checkout waiting times, the first self-service checkouts were introduced at a Price Chopper store in Clifton, New York in 1992. More recently, they have become a familiar sight in supermarkets and retail stores, with their number quadrupling since 2008. By the end of this year it is estimated that some 430,000 self-service checkout will be in use worldwide. In the US, it is thought that self-service checkouts will ring up sales in excess of $1 trillion during 2014.
Drones: Unmanned aerial vehicles have been used by the military for decades, in fact the earliest recorded use dates back to August 1849 when balloons loaded with explosives were sent over Venice. Now, the market for civilian use of drones is starting to take off as businesses consider how they could be used to make deliveries and provide important services, such as wireless internet, to remote locations. For retail businesses, drones have huge potential for making deliveries faster and cheaper. It's for this reason that the market for drones is expected to top $400 million by 2020.
3D Printing: It is 30 years since Charles Hull created the first working 3D printer in 1984, however uptake has been limited due to the high price tag of such devices. With the price of 3D printers starting to become more affordable and a number of key patents expiring this year, an increasing number of 3D printing products are now entering the market. This offers retailers the exciting prospect of being able to produce custom products on-demand in-store, however this is tainted by concerns that 3D printers may also be used to make counterfeit products. To navigate the challenges ahead, retailers must work hand-in-hand with manufacturers to ensure that these opportunities are exploited while intellectual property is protected.