17 tech terms every modern retailer must know

17 tech terms every modern retailer must know

The increasing pace of change in technology and in consumer behavior is leaving many retailers dazed and confused. What are all this new technologies you keep hearing about – and do you really need them in your stores?

We have compiled a short list with 17 of the most crucial tech terms, including why they matter to you and your business.

Point of Sale (POS) system

The combination of software and hardware used to manage sales, close transactions and simplify day-to-day retail operations.

Why it matters: The right POS will improve your customer service, increase your speed and accuracy, and make your inventory, reporting and ordering more efficient. A modern POS system is not optional for retailers.

Discover the 8 must-have features of a modern retail POS system

Mobile Point of Sale (mPOS)

A wireless device, usually a tablet or a smartphone, that performs the functions of a traditional cash register or POS system.

Why it matters: Mobile POS enable retailers to bring the Point of Sale to the consumer, instead of requiring the customer to go to the POS station. This mobility has revolutionized the retail industry: according to Capterra’s “Research on mobile POS software systems usage in the retail industry”, 62 percent of retail workers believe mPOS have made their jobs easier – and over one in 4 retail workers say that mPOS have increased the number of products a customer buys!

Cloud-based POS

Point of sale software that can be directly accessed from the web, and is usually run on a web browser. Also known as “online POS”.

Why it matters: Cloud-based POS have been growing in popularity due to their scalability, speed of deployment (no local hardware and software installation is required), low cost, and compatibility with most Point of Sale hardware (the POS software can run on any web browser). They are especially suitable for retailers with a good network connectivity and that are prone to seasonality.

EMV

A global standard for credit cards and for payment terminals, implemented to help reduce frauds. EMV cards are embedded with a smart chip that ensures the card is valid, and require consumers to enter a PIN code to prove ownership.

Why it matters: EMV helps protect retailers and consumers against losses deriving from the use of counterfeit, lost or stolen cards. Today, retailers in several countries worldwide are required by law to have EMV-compliant payment equipment. Retailers that don’t comply are considered liable for any fraudulent credit card charge taking place on their premises.

Pop-up store

A physical shop opened for a limited period of time. Also known as temporary store, or flash retailing.

Why it matters: Pop-up stores are an increasingly popular way for retailers to build an alternative presence in the streets. They are also used to test new markets or new products. They are easy to set up, and can give great visibility to both new and already established brands.

Omni-channel

A sales approach that provides customers with an integrated shopping experience across all sales channels. Typically, the main sales channels are physical stores, webstore (e-commerce), mobile and social media. An omni-channel strategy would encompass them all.

Why it matters: Today’s consumers expect a consistent experience when interacting with a brand. They don’t think about different channels – and neither should retailers. In order to deliver the service customers demand, retailers need to implement a unified strategy, and provide the same level of service, branding and product information across all channels. An effective omni-channel strategy also allows shoppers to maintain their information, including shopping basket and loyalty points, across all sales channels.

Learn how to offer modern customers the unified experience they desire

Click & collect

A shopping model that lets customers order or buy products from a store website, and pick them up from a physical store location.

Why it matters: There are three very good reasons to implement click & collect in your stores. 1. Click & collect is popular with customers, as it enables them to pick up purchases at their own pace, without having to wait for delivery at home.
2. It helps drive traffic into the store.
3. It has been shown to increase the basket size: according a to 2016 OnePoll research, 65 percent of customers using click and collect make unplanned, extra purchases while picking up their order in store.

RFID

A technology that uses radio frequency to read and track information stored on a tag attached to an object.

Why it matters: RFID is nothing new, but its popularity with retailers is relatively recent, and has to do with the technology becoming more affordable. With RFID tags retailers can track and trace items wirelessly, without needing to have the item in sight. In recent times, retailers have been using these tags to track misplaced items, to analyze the popularity of specific products (for example, to see how many times a piece of clothing has been tried on and not bought) and, generally, to improve in-store inventory accuracy.

Enterprise Resource Planning (ERP)

An ERP system is a business management software that is implemented throughout the business to improve the flow of data, and to automate and facilitate business processes in the whole organization.

Why it matters: There are many reasons why a retail company needs an ERP. At the most basic level, an ERP system consolidates and reconciles revenue, inventory and customer data in one place, consequently improving productivity and analytics.

Business Intelligence (BI)

The tools, systems and software that are used by an organization to collect, analyze and integrate its business data, in order to support better decision-making.

Why it matters: The amount of data companies produce is growing at a dizzying rate. BI software can help retailers effectively mine this data for insight, in order to take profitable, informed decisions. Cloud-based BI tools are getting increasingly popular, as they enable retailers to use great computing power and complex data sets which are usually not available locally.

Cloud computing

The delivery of services – storage and access of data and programs, network, analytics and more – over the internet, on demand. “Cloud” is another name for the internet.

Why it matters: The cloud revolution has just started. According to IDC, cloud computing spending has been growing at 4.5 times the rate of IT spending since 2009, and is expected to grow even faster in the future. IHL Group reports that cloud-based software is bringing retailers lifecycle cost savings of 25-50 percent.

Hybrid cloud

A cloud computing environment that blends on-premises, private cloud and public cloud services.

Why it matters: Hybrid cloud models are increasingly popular with companies, as they enable them to design the appropriate mix of in-house and cloud-based applications for their needs, minimizing risk while maximizing flexibility. According to Rob Koplowitz, Principal Analyst at Forrester Research, “The path to the cloud is a hybrid approach for the foreseeable future, with servers and services running in combination.”

Discover 6 ways a hybrid cloud model can optimize your retail business

Augmented reality (AR)

A technology that superimposes a computer-generated image over real-life environments, providing a composite real/digital view as a result.

Why it matters: Retailers in different industries have been implementing AR apps with the twofold goal of boosting the customer experience, and decreasing the risk of returns. The idea is that when customers can virtually test makeup products on their skin hue or see how much space a piece of furniture would take up in their home, they will be able to make a more thought-through purchase – with fewer post-buy regrets.

Virtual reality (VR)

A 3D, computer-generated environment that can be interacted with, usually using special equipment such as a visor with a screen, or gloves fitted with sensors.

Why it matters: Although the time of shoppable virtual stores may still be far away, forward-thinking retailers are already using VR to plan store design, decide shelf assortment and layout, and understand store analytics for their various locations in a contextual, 3D view.

Artificial intelligence (AI)

The simulation of human intelligence processes such as visual perception, speech recognition and decision-making by computer systems.

Why it matters: Although intelligent robot-employees are still far from a reality, AI-powered chatbots have become an important investment for retailers – being, arguably, one of the stronger drivers behind the spread of 24/7 customer service. Chatbots are popular with customers, too: according to an IBM research, 65 percent of millennials would rather interact with bots than talk to a live agent! Retailers like Neiman Marcus, Asos and John Lewis have also started testing AI-powered visual search, enabling customers to take a picture of any product and visualize similar items.

Machine learning

An application of artificial intelligence that allows software to learn and improve from its experience without having to be explicitly programmed.

Why it matters: From optimizing product prices (think about Amazon’s or Uber’s dynamics pricing model) to forecasting sales, the applications of machine learning in retail are endless. Perhaps the most popular, and profitable, use is personalized product recommendation: Amazon reported that 35 percent of its sales came from recommendations made by machine learning algorithms. Other retailers have experienced similarly remarkable returns.

Internet of things (IOT)

The internet of things is formed by all the physical devices (items, vehicles, buildings, etc.) that can connect to the internet, and to each other, and exchange data thanks to their embedded sensors and software.

Why it matters: IOT has transformed retail in numerous ways. On the one hand, IOT can be used in-store, to track who is looking at what, where shoppers walk, what they buy (or perhaps try on, and do not buy). On the other hand, IOT items have been popping up in the product catalogues of retailers in all industries: from wearable technology, such as smart watches, to smart home appliances, to connected t-shirts that monitor heart rate, IOT is a profitable new market.

 

Retail is changing rapidly. If you need help keeping up, don’t hesitate to contact our experts.

 

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Article written by

Giada is LS Retail’s content manager. When she is not busy researching topics to write about, she is entertaining her fellow colleagues with witty food reviews and clever every-day life suggestions. When in doubt… just ask Giada!