Technology Transforms the Retail Sector

I recently bought a bagel and a cup of coffee at my neighborhood coffee shop. Unlike most shops though, my wallet stayed in my pocket. Using the Square mobile payment app on my smartphone, I simply informed the cashier of my name, which populated the cash register (an iPad) with my account, confirmed by the proximity of my phone. I accepted the charge and that was it. On the way out, using my Belly customer loyalty app, I swiped my phone across a digital display to get credit toward future rewards. Are these technologies commonplace in retail shops today or is my neighborhood coffee shop simply ahead of the curve?

To better understand and quantify these trends, CompTIA recently conducted a study among 500 retail businesses in the U.S. Consider some of the key takeaways:

• Retailers have begun to experiment with emerging technologies that improve upon point-of-sale (POS) systems or leapfrog those systems altogether and leverage new platforms for payment processing. For example, 13 percent of retailers report using a mobile payment system, such as Square or Google Wallet, while another 19 percent indicate they plan to deploy this technology over the next 12 months. While the data suggests momentum, it will still take time and on-going innovation to displace traditional credit cards.

• Similar to other forms for print that have gone digital, a similar shift is underway for signage. From the very largest signage in the form of billboards to the smallest, such as price tags, the right mix of technologies at the right price points have enabled a new wave of signage options. The research indicates one in three retailers currently use digital signage in some way. With an additional 22 percent of retailers signaling intent to adopt digital signage over the next 12 months. Top demand drivers for this technology include:

1. Displaying sales or promotional announcements,


2. Displaying photos such as images of customers using store products, and


3. Internet content such as the store’s website or store Facebook page.

• One of the more interesting applications of social technologies comes in the form of location-based solutions. Making the Internet more “local” has been an important macro trend over the past two years. CompTIA research pegs retailer usage of geo-location technologies at 21 percent (e.g. Foursquare). Among all emerging engagement technologies, adoption intent ranks highest for geo-location initiatives. One reason for the strong interest may be as a defensive play against the threat of showrooming. Location-based technologies can help give retailers the tools to incentivize in-store purchases, such as a special discount targeted to customers that “check-in” via an app. This practice is sometimes referred as geo-fencing, or setting engagement boundaries (both physical and profile-based).

It’s an interesting time in the retail sector. New technologies continue to disrupt the space, providing benefits to those that successfully navigate evolving technology and business models, while greatly challenging those that do not. For IT vendors and solution providers with the right mix of product, services and expertise, the retail sector holds plenty of opportunity.

The full report, Retail Sector Technology Adoption Trends, is available at no charge to CompTIA members. Please login and visit the Research tab. Or, contact us at research@comptia.org and we will be happy to answer any questions.