By Rob Garf

I had the privilege to team with Tom Litchford, VP of Technology at NRF, and Anita Bhappu, Professor at University of Arizona, on ground breaking research in the retail industry. The data shows that nearly 40% of retailers want a single platform to manage consumer interactions and transactions across all channels. And twice as many retailers plan to leverage ecommerce (38%) over traditional POS (19%) to support this strategic direction.

Single Platform Simplifies Technology Environment and Enables Retailers to Move at the Speed of Consumers

The new retail reality will be better served by a single platform at the center of the consumer shopping experience. According to the study “Digitizing the Store – The Wave of Online and Offline Convergence” – which polled more than 200 U.S. and European retail business technology executives – nearly 40% of retailers are considering a single consumer platform to manage interactions and transactions across channels. This single platform operates as the common system of interaction to bridge the virtual and physical shopping worlds. It consolidates and manages key data elements, business rules and functionality that historically lived in multiple systems to deliver a seamless shopping experience across channels. With simplified architecture, synchronized data, and real-time intelligence, retail leaders stated a single platform should enhance customer service, standardize business processes and increase store associate productivity.

POS Refresh Triggers Single Platform Investments

There will be significant store investments as retailers aggressively break tradition by launching new store formats, revamping aging locations, testing new concepts and bringing digital capabilities into the 4 walls. 80% of retailers surveyed expect to maintain or increase store technology investments over the next 3 years.

Many of these investments are targeted at traditional POS, with 70% of retail executives reporting that their organization is currently deploying or planning to refresh its existing software in the next 3 years. This POS refresh cycle – which has historically occurred approximately every 12 years – has prompted technology leaders to rethink traditional store-centric software, along with other consumer-facing technology, and consider a single commerce instance across channels.

POS Supplanted by eCommerce Technology

Since the advent of the electronic cash register in 1974, traditional store-based POS has managed nearly 100% of retail transactions. It took 30 years and the emergence of the Internet for another technology – and channel – to chip away at the status quo. Based on a significant annual growth rate, Forrester Research predicts that ecommerce will grow to $262 billion in 2013 and reach $371 billion by 2017 in the U.S. alone, when it will account for 10% of all retail sales. Perhaps even more significant, Forrester estimates that half (49.5%) of total U.S. retail sales today are impacted by the web in some way – comprising both 8.4% in direct ecommerce sales and an additional 41.3% of U.S. retail sales that are influenced by shopping activity of some kind that consumers conduct online before buying in stores or elsewhere. Check out Tom Litchford’s take on the evolution of traditional POS.

Over the past 15 years, ecommerce functionality, architecture and extendibility that were designed for online shopping have surpassed store POS applications. As a result, traditional POS, call center and mobile technologies that directly interact with consumers are increasingly being supplanted by ecommerce to establish a single consumer platform.


Source: Copyright 2014. National Retail Federation. All Rights Reserved.

Retailers Must Proactively Address Key Technology Imperatives

While many retailers believe that investments in a single platform to digitize the online and offline world will enable them to move at the speed of consumers, they need to consider the following three overarching imperatives to take advantage of this unprecedented change that the retail industry is experiencing.

  1. Understand Market and Internal Landscape: Retailers must understand the broader marketplace and current state of technology solutions, as well as the internal organization and key stakeholders.
  2. Establish Technology Roadmap: Retail executives we surveyed also cited the challenges involved with complex migrations of legacy systems to the new environment and the need for significant capital investment for a “big bang” approach. The transformation to extend a singular platform across channels–particularly into physical stores–won’t and can’t happen overnight. Retailers need to develop their own technology roadmap that defines success, supports business initiatives and defines a path with clear milestones.
  3. Drive Continual Innovation: Consumer demands are changing at a rapid pace and innovation is currency in the shopping experience. Innovation and speed are not one-time events but instead must become standard operating procedure––made possible by a flexible and scalable platform.