The biggest retail tech stories of 2018
Written by Peter Walker
It’s been a rollercoaster ride for retailers this year and we’ve tried to keep up with the technological challenges and opportunities, but which stories were the most popular?
Read on to find out what was most read and most interesting during 2018…
Fear of payments evolution
The most-clicked was a piece predicting that non-cash payments in the UK will near the £1.5 trillion mark by 2026, with the caveat that the death of cash will be a ‘slow process’.
In June, law firm Paul Hastings forecast that the value of non-cash payments in the UK will rise by 26 per cent on 2016’s figure of £1.14 trillion, with 19.1 billion contactless transactions per year within a decade.
However, a survey by the same firm - among more than 2,000 UK consumers - found that three quarters have concerns about using new payment methods, the latest research suggests.
The risk of fraud was cited as the main reason (59 per cent) for UK consumers being unwilling to use new payment methods, followed by data security incidents (49 per cent) and the risk of theft (45 per cent).
Also popular were stories of High Street brands getting on board with the tech revolution.
At the start of the year, Marks and Spencer revealed the details of a £25 million technology transformation programme, designed to enable the retailer to become a digital-first business.
Changes included the appointment of Tata Consultancy Services (TCS) as its principle technology partner, the simplification and consolidation of M&S’ technology supplier base, and the creation of an agile Technology Operating Model.
In March, the Co-op started trials of a new mobile app where customers can checkout their in-store purchases on their phone, without visiting a till. The technology allows consumers to scan products on their own device as they walk around the supermarket, then when they have finished shopping, the amount they owe will be deducted from their mobile wallet with a single click.
The UK’s largest bakery chain Greggs signed a deal with enterprise technology firm Keytree in June as part of a multi-year business transformation programme. The new solution aims to maximise the efficiency across the shop network in order to reduce wastage and improve product availability.
High Street strife
Despite these attempts to move with the times, it was tough going for many established retailers.
In May, the Centre for Retail Research reported that 2018 was expected to be the worst year for retail store closures since 2008, with more than 10,000 stores leaving retail use.
The report argued that the UK retail business model was flawed and the growth in online sales would result in the closure of 20 per cent of all UK retail stores by the end of 2018. Since 2012, it estimated that over 60,000 stores have closed (a fall of 15.7 per cent), with the figure expected to rise to over 70,000 by the end of 2018 (down 18.4 per cent).
Along with Brexit uncertainties, the shift to online shopping was the most obvious factor in dwindling footfall and in-store sales, which several studies put down to a generational shift.
A survey of 2,000 British consumers by Hitachi Consulting revealed the attitudes to technology of different generations and incomes – identifying Millennials as the group retailers can target to boost sales and grow market share.
Seven in 10 Millennials would be more likely to shop with a retailer that was enhancing its shopping experience with innovative technology, according to the research.
However, brand experience consultancy I-AM surveyed 2,000 18-to-35 year-olds living in several UK cities, finding that 74 per cent prefer physical stores, compared to just 26 per cent favouring online shopping.
In depth analysis
The much-vaunted death of the High Street was such a key theme that Retail Systems had to dive in for some deeper analysis.
We spoke to several industry stakeholders, some of whom argued that re-designed brand outposts are still a crucial part of any retailer’s omnichannel strategy.
Elsewhere, feature articles looked at the emergence of internet-connected devices and voice search as new avenues for struggling retailers to drive new customers through.
Revenues generated by Internet of Things (IoT) retail platforms will exceed $4.3 billion by 2023, up from an estimated $890 million in 2018, according to Juniper Research, which cited challenging retail conditions, the rise of e-commerce and spiralling rental costs as a ‘push factor’ for retailers to adopt IoT.
However, there was also a stark warning that a lack of warnings from manufacturers, risk control from companies and oversight from the government could be creating a cyber security nightmare around devices connected to the internet.
The opportunity is clear for those willing to invest in updating their websites though.
A report from Capgemini, which surveyed more than 5,000 consumers in the US, UK, France and Germany, found that shoppers who use voice assistant technology are willing to spend 500 per cent more than they currently do via this mode of interaction over the next three years.
As mobile commerce continues to grow, consumers are increasingly using voice assistants on their phones and in their homes to ask questions and eventually buy products, leading retailers to jockey for top position in the search results that provide the answers.
High Street brands are investing in-house and partnering with tech startups to help improve the search engine optimisation (SEO) across e-commerce sites, as the advent of voice search has changed which content comes first.