softwareAG Retail

Software AG shared its view of trends in the retail industry based on its interactions with customers and market observations.

Oliver Guy, Retail Industry Director, Software AG, noted: “The worlds of e-commerce and brick and mortar retail are now seamlessly merging with retailers evolving towards an omni-channel approach to their businesses. Mobile, cloud, analytics and social media will be fully integrated into a unified merchandising system designed to vastly improve customer engagement. The notion that ‘the store is dead’ is not, in our opinion, the future – rather, stores will become highly technology-enabled to deliver a super-personalized customer experience and become the hub of omni-channel customer-centricity. These new predictions highlight our view of the retail industry in the coming year.”

1. Fewer Stores, More Stuff

Brick and mortar stores will add fewer new outlets as they dramatically reinvent themselves to address omni-channel challenges. Existing stores will take a “hub and spoke” approach, acting as pick up and fulfillment centers and offering “gold-star” customer service. The “endless aisle” concept will extend shelf space to the brand’s full catalogue of products and accessible content.

2. It’s All About You

Customer-centric personalization will be the must-have differentiator for retailers and will become much more targeted. Retailers will deploy customer-centric technologies such as easy sign-up, RFID-tagged loyalty cards, which send personalized rewards over mobile phone when in-store. They will tap into internal information, known preferences, and social media data to better understand and delight their customers.

3. The Price is Right

Differentiation by price will be much more dynamic in nature in order to beat the competition, as customers become more aware and more sensitive to price. Real-time electronic shelf pricing will replicate customers’ online experiences, as well as optimize inventories and reduce labor costs. Real-time personalized discounts and special offers will further motivate shoppers to head to stores.

4. Mission Control for “Omni-Everything”

Today’s customers expect to get what they want—where and when and how they want it—and only omni-channel offers them a consistent experience no matter how they choose to interact with the retailer. The complexity of omni-channel processes and how these interact with multiple systems will need further control; a kind of “mission control” center where retailers can see and control every activity across all channels.

5. You Will Meet a Tall Dark Stranger

Predictive analytics in retail will enable stores to know, with a great deal of certainty, what customers are going to want and when. Predictive analytics tools, especially when combined with streaming analytics, offer retailers the ability to manage queues, customer expectations and inventories before there is an issue.

6. The Internet of Total Satisfaction

The Internet of Things (IoT) is going to revolutionize the store of the future, with its sensor-oriented devices enabling the most detailed and targeted customer centricity. Retailers embracing IoT will have visibility into inventories via electronic shelf sensors; the ability to create smart signs that are weather- or facial expression-relevant; and the tools to make every loyalty customer feel coddled and important.

7. Immersion Therapy

Futuristic technology will immerse customers in the shopping experience. Technologies such as Microsoft’s Hololens will allow customers to augment reality while in-store. They will be able to try on clothes, or design their ideal kitchen, virtually, while sharing their experiences with friends and family. iBeacons™ and anonymous analytical face detection will enable retailers to interact in real time with customers, as well as track their behavior.

8. Clean-up on Aisle One

Real-time monitoring capability will be critical for the store of the future, in order to sense, correlate and automate processes from staffing to inventory. Smart sensors will detect activity and provide visibility across a store coupled with streaming data and real-time analytics, allowing for actionable and automated responses to things like a spill in a grocery store or a run on umbrellas in a rainstorm.

9. Buy Me Now!

Retailers will further customize and personalize instant gratification “buy buttons”, which can be found anywhere from Twitter to Amazon, with the expectation that these will translate into higher earnings. But they will need to make strategic technology investments to ensure real-time inventory is understood and the complex processes involved in new channels are orchestrated correctly.

10. Last Item in Stock

Real-time inventory visibility will dominate as retailers strive to keep the customers informed of stocks at all times. Retailers will control inventories by applying technology that shows inventory levels across all channels.

About Software AG

Software AG (Frankfurt TecDAX: SOW) helps organizations achieve their business objectives faster. The company’s big data, integration and business process technologies enable customers to drive operational efficiency, modernize their systems and optimize processes for smarter decisions and better service. Building on over 40 years of customer-centric innovation, the company is ranked as a leader in 14 market categories, fueled by core product families Adabas-Natural, ARIS, Alfabet, Apama, Terracotta and webMethods. Software AG has more than 4,400 employees in 70 countries and had revenues of €858 million in 2014 –