After years of talking about how the shopper’s experience could be more targeted and personalised, it was in 2014 that the sector began to embrace an innovative technology that will enable this, that is, beacon technology.
It was probably unsurprising that this really started to take off when Apple forged its path in this area with the iBeacon, and by the same token, it is quite likely that next year we’ll see mobile payments becoming more commonplace after Apple launched its Apple Pay - just available in the US at the moment - in September.
But let’s not get ahead of ourselves. While it would be nice to look back with rose-tinted (Google) glasses at how retailers are exploring new technologies to improve the shopping experience and encourage us to spend more with them, a number of retailers were also shown up by where they weren’t investing - namely, in security. For example, US retailer Home Depot was the victim of a major data breach, as was the UK’s online groceries shopping laggard Morrisons.
Also, Tesco and Marks & Spencer were examples of how even such well-known brands can struggle in the digital age; with the former announcing profit warnings, a major financial misstatement and the departure of the CEO Philip Clarke, the only one in the FTSE100 with a CIO background, while the latter struggled with a new website platform and logistics.
IT darling John Lewis, in contrast, proved it was made of more than just cute Christmas penguin adverts with the launch of a startups lab, and traditional catalogue firm Argos went from strength to strength as it proved itself in the modern, digital world.
Let’s take a closer look at the good, the bad and the ugly of 2014 retail.
John Lewis launched JLAB, a startup incubator based at co-working space Level 39 in Canary Wharf.
It ran a competition which saw 30 entrepreneurs pitch to investors made up of John Lewis directors and other tech leaders, who then chose five finalists to receive financial support, office space and business mentoring for 15 weeks. It crowned Localz, a business specialising in micro-location technology - proximity and iBeacon technology - as the winning startup of its first JLABs programme.
The department store, famous for its high quality customer service, also revealed that despite its digital successes (online shopping and click and collect have proved increasingly successful channels for John Lewis and other retailers), digital actually comes second for the business, being used to support a strong customer service ethic.
The year also started well for Morrisons, the UK’s fourth largest supermarket. Although late to the game, with the help of online groceries retailer Ocado, it finally launched an online grocery service to customers on time and apparently without a hitch.
Is this enough to counter the sale of Kiddicare, the online baby goods arm that Morrisons had originally purchased with the aim of using its infrastructure to launch its online grocery service before deciding to cut its losses? Or the theft of data from a staff payroll systems that was then published online in March?
Meanwhile, Argos was proof that a traditional retail format can keep up with the digital age, by bolstering its digital expertise with a number of major new hires to support its IT director Mike Sackman, who has been responsible for the technology transformation that began in 2012.
Its technology investments include growing the amount of customer data to give shoppers a more personalised experience by encouraging them to register an account, and opening up a growing number of digital concept stores that allow the retailer to test out new technologies such as dynamic voice-picking systems.