Varejo Innovation Report 2014

IN PARTNERSHIP WITH:
INNOVATION
REVIEW 2014

in partnership with:
32
Steve Dunbar
Windows Embedded Business
Group Lead – Northern Europe
microsoft
Retailers are constantly looking for ways to
improve every aspect of their stores, from
customerexperiencesandemployeeengagement,
to stock control and staff management, while
always trying to increase efficiencies and profits.
The Retail Week Innovation Review 2013
brings together the top 20 retail innovations
you can expect to see in the future. From an
innovation standpoint, retail is an ever-changing
landscape with new devices and technologies
evolving to drive competitive advantage.
New innovations and technologies play a key
part in any retailer’s business, and whether it be
digital signage, POS tills, back-end store systems
or mobile/handheld units, devices in the retail
sector are playing a key role in shaping the store
of tomorrow.
It’s these new devices that make the ‘internet
of things’ possible. Gartner defines the internet
of things as “the network of physical objects that
contain embedded technology to communicate
and interact with their internal states or the
external environment”.
With Gartner predicting there will be 30
billion devices in the world by the year 2020, the
explosion of devices is moving the internet of
things along at quite a pace.
Microsoft’s retail strategy is focused on trans-
forming those one-off applications, devices and
databases into an end-to-end intelligent system.
The overarching goal is to help retailers respond
to changes in the market, drive greater efficien-
cies in their processes, empower more engaged
and productive employees and provide custom-
ers with a shopping experience that is personal,
seamless and differentiates the retailer from
its competitors.
Intelligent systems powered by Microsoft
stack technology enables the flow of data across
a company’s infrastructure, from point-of-sale
kiosks and industry devices, such as handhelds
and tablets where data is generated by employees
and customers, to back-end systems and services
wheredataisthentranslatedintostrategicinsight
and business decisions.
With IDC forecasting the market for Intelli-
gent Systems to reach 2.3 billion units and $1.7tn
(£1.04tn) in spend by 2017, the opportunity is
huge and the time to act is now.
With the market growing at such a pace, re-
tailers must grab hold of new innovation to stay
ahead of the game. Microsoft is making a major
commitmenttoalloworganisationstounlockthe
potentialoftheinternetofthingsinretailthrough
intelligent systems. That’s why we are pleased to
support this report.
New technological innovations might promise to
revolutionise retail, but which cutting-edge tech-
nologies are genuine game changers?
The Retail Week Innovation Review sets out
to answer that question by examining the top 20
retail innovations of 2013 and asking a team of
technology, IT and multichannel experts to de-
liver their verdict on the impact it will have on the
retail market.
Withtheretailindustrybeingconstantlybom-
barded month after month with new innovations,
it’s vital that retailers step back and take a long,
hard look at each technological development and
ask themselves which are worthy of investment.
Tohelpthemdothis,RetailWeekhasrecruited
leading analysts from Accenture Mobility, Expe-
rian Footfall, Gartner, Microsoft, and OC&C
StrategyConsultantstoformtheinnovationpanel.
Theseexpertshavebeentaskedwithassessingthe
prosandconsofeachtechnologicalinnovationand
assessing the potential it has to change the retail
industry for good.
The top 20 retail innovations were chosen in
conjunction with the Retail Week team and the
innovation panel, and are reflective of the far-
reaching innovations sweeping retail – affecting
everythingfromthein-storeenvironmentandhow
consumersbrowse,interactwithproducts,engage
with brands, queue, pay and get rewarded, to mo-
bile innovation, forecasting tools, data analytics
and supply chain technology.
While the innovations in this report have not
necessarilyemergedin2013,analysisofthetop20
isverymuchrootedinthehereandnow–howeach
technology has developed in the past 12 months
andtheimpactit’shadontheretailspacethisyear.
It’s important the Innovation Review is not
blue-sky thinking – there’s very little value in ana-
lysing immature innovations that might never go
further than the creator’s drawing board or fizzle
outofretailers’consciousnesswhenthenextbigger
and better thing comes along. Instead it’s crucial
RetailWeekfocusesonemergingtechnologiesthat
aregenuinelygettingretailerstalkingandattract-
ing investment. The following case studies focus
on which retailers have adopted the innovation or
embarked on trials in 2013; which sectors it’s af-
fecting;andhowit’sprovingtobeagamechanger.
The pace of innovation is accelerating, driven
both by retailer investment and consumer expec-
tation.Beingleftbehindinaworldwhereincreas-
inglysophisticatedtechnologyisthenorm,notthe
exception, is no longer an option. Businesses that
refused to embrace change were left behind years
ago. Now the question on every retailer’s lips is
whichinnovationsarefundamentallyalteringthe
way consumers shop? Hopefully the Retail Week
Innovation Review 2013 can answer that.
partner forewordFOREWoRD
“From an innovation
Standpoint, retail is an
ever-changing landscape
with new Devices and
technologies evolving to
drive competitive advantage”
“With the retail industry
bombarded with new
innovations, it’s vital that
retailers take a long, hard
look at each technological
development and ask which
are worthy of investment”
Laura Heywood
Supplements editor
retail week

54
AD
MEET THE PANEL
Anita Balchandani
Partner
OC&C Strategy
Consultants
Anita Balchandani is
a partner with OC&C
Strategy Consultants
and the sector lead of the
UK retail team. She has
worked extensively in a number of categories – in
particular, fashion, general merchandise, home
and technology – across a range of multichannel
models including stores, catalogue and online.
Balchandani is also a non-executive director on
the board of Space NK.
Prior to OC&C, she was the group strategy
director and part of the executive team at
Shop Direct Group. Balchandani was also at
Asda Walmart as head of non-food business
development.
John Davison
Vice-president and
research director
Gartner
John Davison is vice-
president in Gartner’s
Industry Research Retail
vertical, where he is
responsible for analysing
the business and consumer technology market in
the retail sector and identifying potential growth
areas and opportunities for clients.
Before joining Gartner, Davison worked
with IBM as a principal consultant, managing
partner solutions in the retail industry, managing
implementation teams in merchandising
projects and leading projects in supply chain
implementation for leading retailers. He gained
a broad view of retailing while working for
retailers such as Asda, BHS and WHSmith.
Davison worked with Gartner analyst
Miriam Burt to deliver the innovation verdicts
in this report.
Mike Lynskey
Industry market
development
manager, retail
Microsoft
Mike Lynskey is the retail
specialist for Microsoft in
the UK.
After starting his
career at IBM, Lynskey moved into a number of
industry roles with brands such as Timberland,
where he was European commercial director,
Clarks where he was international sales director
and Merrell where he was European general
manager.
Lynskey has a passion for retail innovation
and orchestrates the extended network of
Microsoft partners to provide industry-specific
solutions to deliver the future of retail today.
Brendan Mislin
Global Capability
Lead (Windows
Platforms)
Accenture Mobility
Brendan Mislin is a
senior software manager
in Accenture Mobility
in London. He performs
two functions – one as the device and platform
retail lead and the other as the global capability
lead for Windows platforms. Over the past 12
years, he has specialised in mobile and embedded
software engineering with a particular focus
on leveraging Microsoft technologies. Recently
his focus has been on creating new mobile and
embedded solutions for the retail industry.
Before Accenture he worked at Microsoft
for 10 years as a software engineering manager
in the US and UK where his projects included
a variety of versions of Windows Mobile and
Windows Phone.
Marty Ramos
Chieftechnology
officer,retail,
consumerproducts
andservices
WorldwideEnterprise
andPartner
Group,Microsoft
Corporation
Marty Ramos is responsible for worldwide
strategy and innovation for the retail, hospitality
and consumer goods sectors. He started at
Microsoft in October 2005 as a solutions
specialist in the Retail Industry Group where he
spent a third of his year in retail stores. In 2009,
Ramos worked with the Microsoft Stores team to
get the first two stores up and running. He is also
responsible for technology at the Microsoft Retail
Experience Center on its Redmond Campus.
Prior to joining Microsoft, he was the chief
architect for Retalix US. He also worked at IBM
for 20 years.
Dave Sheppard
Head of consultancy
services
Experian Footfall
Dave Sheppard is
the global head of
consultancy services
in Experian FootFall.
Responsible for a global
network of analysts and consultants, his team
provide clients with both insight into their retail
performance and the ability to provide targeted
action plans for driving instrumental change in
their stores and other sales channels.
Before joining Experian FootFall, Sheppard
worked as a business intelligence strategy
specialist, working with many clients including
global brands.

top 20 retaIL InnovatIons 2013
6
l augmented reality
Moving from a fad to the mainstream,
augmented reality as a sales channel and
location-based educational tool are just
a few of the ways the technology has
developed in 2013
l bluetooth beacons
Individual beacons that can target specific
parts of a store with different areas of content
are transforming how retailers communicate
with shoppers
l cloud-based communications
Offering an internal collaboration platform
over multiple channels for lower costs,
this innovation enables retailers to keep
area managers better connected and gives
staff and customers access to information
regardless of location
l connected fitting rooms
This developing technology allows retailers
to take customer service to the next level
by building a more personal, seamless and
differentiated shopping experience
l Data services
New software that scans customer
transactional data held by banks allows
retailers to better target their marketing and
see where spend is heading to competitors
l Digital wallets
Digital wallets offer the possibility of a
more convenient checkout, as smartphones
eliminate the physical hassle and
psychological hurdle of cash and credit cards
l endless aisle interactive walls
Replacing physical aisles and products
with digital interfaces, this innovation
combines the cost efficiencies of etail and
the physicality of bricks and mortar
l Facial recognition
The developing facial recognition computer
application enables retailers to identify a
customer individually and tailor pricing
and service based on in-store behaviour and
financial history
l Field analytics
Sophisticated field analytics systems
are being used to measure real-time
shopper behaviour, which collects data on
consumers and allows retailers to analyse the
information and respond accordingly
l Fingerprinting
Whether it’s the use of fingerprints to
authenticate and secure POS terminals,
activate cards or improve mobile browse
and buy channels, this technology is gaining
traction in the retail space
l interactive tv
TVs that can run applications, have web-
browsing capability and social media
connectivity create myriad opportunities for
retailers to engage with consumers
l mobile loyalty schemes
Consumers are increasingly willing to receive
promotional offers on their mobile devices.
Retailers have responded by providing
mobile loyalty apps and platforms to enable
their loyal customers to receive multiple
personalised offers
l natural user interfaces
Retailers are trying to bring the interaction
shoppers have with their phones to the big
screen via natural user interfaces, which uses
motion, gestures and voice to shop rather
than a keyboard and mouse
l playcaptcha
PlayCaptcha is an innovative way to boost
shopper engagement with retailers or brands,
as well as putting an end to frustration over
online security features
l Queue management systems
Queue management systems have moved on.
Retailers are trialling a variety of innovative
ways to ‘control’ queuing and cut waiting
times, whatever channel their customers use
l rapid scan systems
Improving the speed with which shoppers
can check out is central to new rapid scan
systems that have now reached the UK.
Lasers enable hundreds of barcodes to be
read every minute
l virtual mirrors
New generation virtual mirrors have become
more widespread in 2013. The developing
technology enables customers to try on
clothes of different sizes, shapes and colours,
which reduces the need for fitting rooms
l wearable computers
It’s been a big year for wearable computers,
from smart badges that allow staff to
communicate with one another and access
product information for customers to glasses
that could offer 24/7 profile tracking data on
consumers
l 3D printing
3D printers can make a three-dimensional
object of almost any shape using a digital
model. As prices come down, a growing
number of retailers have experimented with
the technology in 2013
l 3D shelf planning
Software allows retailers and manufacturers
to build virtual displays for stores, making
the design process faster, more flexible and
cheaper for retailers
7

8
The verdict
Elements of augmented-reality applications are becoming
social and are increasingly centred on context-aware,
location-based services for mobile devices. Hype around
theseappshasbeendrivenbythegrowthofthesmartphone
market,theproliferationofquickresponsecodesandRFID
tags and the increased publicity from technology vendors
highlightingadvancesinareassuchasGPS,digitalcamera
technology and real-time analytics.
Tier One retailers continue to experiment with
augmented-reality applications in store, online and
on mobiles. The main uses for augmented-reality apps
include increased use of geolocation-based services such
as discovering things in the vicinity of the user or showing
a user where to go or what to do, as well as providing
additional information about an object of interest. In
retail, this translates to customers finding locations or
products with maps and real-time directions, accessing
detailedproductinformation,contextualisingproductsand
receiving personalised promotions.
Examples of implementations include enabling
customers to virtually try on clothing online or in a
‘virtual dressing room’ in the store, viewing how furniture
looks in their home, seeing what unconstructed models
of objects look like in 3D and allowing customers to
interact with animated characters. Lego, for example,
has leveraged augmented reality to promote global
collaboration by allowing employees to see newly created
piecesandbuildings.Thecompanyclaimstohaveachieved
higher efficiency with its augmented-reality-enabled
product development software.
However, augmented reality is process-intensive and
demanding. Small screens, imprecise GPS locations and
inconsistent data mean that the augmented-reality user
experiencedoesnotalwaysliveuptotheconcept,anditwill
be a while before technology will deliver the refinements
needed for a good customer experience.
John Davison
Gartner
Moving from a fad to the mainstream, augmented reality as a sales
channel and location-based educational tool are just a few of the ways
technology has developed in 2013
l Augmented reality is when an object
is not present in the real world but
appears to be because of a view
showing a modified version of
reality. This means everything from
smartphones and tablets through to
laptops and computers can combine
reality (such as photographs and
videos) with virtual overlays (a person,
street or room) for a more dynamic,
user-friendly experience.
l The technology holds multiple
attractions for retailers, allowing
consumers to interact with products,
so they feel closer to the ‘real world’
equivalent. It also adds value to
the shopper experience and boosts
revenue channels.
l Firms are designing augmented-
reality retail apps, which take
computer-generated input such as
video, animated graphics or audio, and
modify it to include the real-life item.
l The most obvious benefit of
augmented reality is allowing
shoppers to try before they buy.
Topshop has used it to let customers
try on clothes, and New Look has
worked with Blippar to promote a
new cosmetics range with customers
‘trying on’ nail varnish virtually.
l Tesco has augmented-reality-enabled
magazines. In October it updated the
free Tesco Discover app, developed by
Aurasma, which can be downloaded
onto any smartphone device to access
how-to videos, learn more about
products and buy groceries.
l The Blipp to Buy app allows users
to purchase directly from various
advertising mediums by pointing
their smartphone camera at the
augmented-reality ads. Tesco and Ann
Summers are among those who have
trialled it as a sales channel.
l Ikea’s 2014 catalogue will feature 90
products with an augmented-reality
icon on its pages. Each product can be
transposed into shoppers’ homes.
l While retailers showcase augmented-
realityapps,thereisalackofconsumer
awareness around the technology,
as well as limitations in augmented-
reality enablers – even some of the
higher-end smartphone cameras
lacked sufficient sensitivity to trigger
the augmented-reality experience. But
by 2017, 2.5 billion augmented-reality
apps will be downloaded, according to
Juniper Research in April 2013. The verdict
When Apple released iOS 7 in September, few people
realised that they’d included a feature called iBeacon.
And although a few months later most people still have
neverevenheardthefeaturementioned,ithasleftexperts
wondering if it’s going to change the way that we shop,
order a coffee, or perhaps even more broadly, how we
spend money.
An iBeacon is a small, relatively cheap, Bluetooth
4.0 device that broadcasts some information over a
certain range and has a long-lasting battery. Let’s break
that down – small means a bit smaller than a deck
of playing cards and cheap means a three-pack costs
£65 or so. It can be a standalone device (as described
above), but a phone can also act as an iBeacon.
The maximum effective range is about 200 ft and
manufacturers claim battery life in the one-to-two-
yearrange.Eachofthesemetricswillimprovedrastically
as the iBeacon market matures over the coming
month and years.
So, why is iBeacon so interesting for retailers? Its
simplest use is for in-store messaging, such as sales,
specials, end cap deals and coupons. These could be
pushed to a phone rather than requiring the user to take
outtheirphone,launchthestoreapp,andwaitforthenew
deals to download.
Aslightlymorecomplexusecaseisindoorpositioning,
whichgetsprettyprecisewhenusinganiBeaconnetwork.
This could well be a relatively cheap way to finally help
customers get around a store and easily find the items
they’re looking for.
An interesting but more complex use is contactless
payment, which could be made more secure with
integration of on-device security features such as
fingerprint identification.
Combining these three uses together, there are some
interestingscenarios:Walkintoyourfavouritecoffeeshop
andgetamessagethatsays:‘WelcomebackBrendan.The
usual?’. Tapping ‘yes’ then lets the user pay for the drink
and go straight to the collection point. The customer
likes it because they skipped the long queue while still
collecting frequent drinker points on their account. And
the retailer likes it because they are saving time, effort
and money while still collecting that valuable data about
the customer and the transaction.
Brendan Mislin
Accenture Mobility
l A lot has been made of near-field
communications, but Apple and
PayPal are among the companies to
have shunned that technology and
backed Bluetooth.
l Bluetooth technology has evolved
significantly from a few years ago.
Gone are the days of powerful
transmitters broadcasting to a
large area – in their place have
come individual beacons that can
target specific areas of a store with
different offers or content.
l It’s an inexpensive way to solve the
long-existing problem of accurate
indoor mapping, which is a huge
boon for large stores. This could be
anything from pushing different
offers or information to customers
based on what department they
are in, to how long they have been
lingering in one place, with ‘need
some assistance?’ messages.
l iBeacon, for instance, is a Bluetooth
device that uses Bluetooth Low
Energy technology – this involves a
network of small plastic Bluetooth
devices being placed in stores that
communicate with smartphones
and payment terminals in a similar
way to wi-fi. The technology was
included in Apple’s latest mobile
operating system iOS 7 update in
September. It is a significant step,
also enabling hands-free payment.
l PayPal is also backing Bluetooth
with its new Beacon service, due
to launch next year. Again, it will
use small Bluetooth Low Energy
beacons and users will have the
option to set which stores they
automatically get checked into,
which ones will have automatic
payments and which will require
approval for payments.
BLUETOOTH
beacons
9
Individual beacons that can target specific parts of a store with different areas
of content are transforming how retailers communicate with shoppers
Augmented
reality

10 11
The verdict
I pulled into a Starbucks drive-thru for a coffee recently.
We’ve all done this dozens of times at various restaurants,
butwhatmadethisvisituniquewasthatratherthanbeing
greeted by a voice from a box, I was greeted by a video of
theactualpersonIwastalkingwith.EventhoughIwasstill
talking to a box, it just felt more comfortable and personal
to see the actual person I was talking to.
Communicationtobeeffectivemustbeeasy,informative
and relevant but it must also be personal and comfortable.
Usingcloudservicesforcommunicationsaccomplishesthis
butcanaddcontexttothescenarioandallowforintelligent
routing of calls to ensure prompt and more accurate
resolution.Integratingtheseservicesacrossmanysystems
and locations can be quite challenging. Utilising the cloud
eliminates the need for specialised equipment to provide
these services and greatly simplifies the implementation.
Solution providers offer retailers entire contact centre
systemsutilisingcloud-basedcommunications.Callscanbe
tracked,recorded,monitoredandroutedtotherightperson
tohelpacustomerorassociate.Theirsolutionquicklyfinds
an available associate with the right skills for a particular
issueandlinksthemtothecaller.Anintelligentdashboard
providesusersandsupervisorswithpertinentandreal-time
information on usage, responsiveness and satisfaction.
Othersoftwaredevelopersprovidevideocallboothsfor
service desks in stores. When a service issue becomes too
complexortheservicedeskistoobusy,customersarerouted
to the booth to work with a remote service representative.
With products increasingly sold in channels other
than physical stores, it’s important for retailers to provide
personal and effective communication tools for their
customers to resolve issues and receive personal service.
Marty Ramos
Microsoft
Offering an internal collaboration platform over multiple channels for lower
costs, this innovation enables retailers to keep area managers better connected
and gives staff and customers access to information regardless of location
l Cloud communications are internet-
based voice and data communications
where telecommunication
applications, switching and storage
are hosted by a third party outside of
the organisation using them (in the
cloud), and accessed over the public
internet. Retailers benefit from a
more cost-effective, reliable and
secure communications environment
because they only pay for services
or applications they use.
l Analyst firm IDC’s recent Retail
Insights survey predicted that
adoption of cloud computing in
the retail sector will grow 300%
over the next two years.
l Research commissioned by
communications provider Elite
and unified communications
manufacturer Swyx earlier this
year surveyed Retail Week readers
and found that 49.4% plan to adopt
unified communications in the next
two to three years. 39.3% of those
that would consider deploying unified
communications would be driven by
the need to improve customer service.
Other influencers included the need to
reduce overheads (19.6%) and increase
staff productivity (17.9%).
l One advantage of cloud-based
communications is the provision of
an internal collaboration platform,
rather than just an internal repository
for documents. This flexibility can
improve productivity, from keeping
area managers connected while
travelling between branches to
ensuring customers are put through
to someone who can help them
regardless of which store they called.
l Tesco uses Microsoft Office 365 across
its European and Asian operation
to serve as a portal for half a million
staff. It provides access to information
and company experts regardless of
location. Lync 201, Microsoft’s server
platform for unified communications,
comes as part of the package and ties
real-time information with instant
messaging, video conferencing and
voice communication, which can
benefit staff training and consumer
interactions.
l Elitetele.com provides cloud-based
communications solutions for retail
customers including Gap and New
Look. Benefits include the ability to
automatically divert all incoming
customer or staff requests to the
relevant resource dependent on their
‘presence’ status or availability. Calls
can also be re-directed to another
country if the retailer extends its
opening hours or sells overseas.
cloud-based
communication
The verdict
Thefittingroom.Thatphrasealoneisenoughtomakeany
seasoned shopper feel annoyed. Fitting rooms are small,
dark, awkward and always seem to be missing some
essential component, such as coat hooks, somewhere
to sit, a mirror or a latch on the door. But these cold,
forgotten cubicles so often tucked away at the back of
the store are actually more important than most people
realise. The fitting room is where the brand meets the
body.Formanycustomers,it’stheplacetheygotodecide
whether it’s time to take out their wallet or time to walk
out empty handed.
Those precious last few minutes spent in the fitting
room are some of the most important minutes of
the entire shopping trip – especially to the retailer.
Surprisingly,theyarespentinthatsmall,dark,awkward,
cold room with no influence from the retailer to help the
customer make that decision to take out their wallet. It’s
for this reason that the connected virtual fitting room is
particularly interesting.
Bringing this kind of innovation into the fitting
room merges the best of the online shopping experience
(recommendations,ratingsandpersonalisedexperience)
with the best of the in-store shopping experience (seeing,
feeling and actually trying on the clothes in person). It
notonlyhelpsmakethepenultimatestageofthein-store
shoppingexperiencealotmorefun,butitalsohelpsmake
surethatcustomersleavethestorehavingfoundtheitem
they were looking for as well as hopefully a few related
items as well.
In addition, the data and business intelligence
collected by the system is a great way for retailers to gain
deeper insights to their customers’ in-store shopping
habits and preferences.
Fittingroomshavebeenignoredfortoolongandhave
fallen far behind the technology curve in the rest of the
store, so it’s great to see fresh ideas being rolled out.
Brendan Mislin
Accenture Mobility
l Virtual fitting room company Fits.me
provides photo-accurate visualisation
of clothing fit. Working with retailers
including Hugo Boss, Superdry, LK
Bennett, Avenue 32, Henri Lloyd,
Mexx and Boden, Fits.me’s technology
displays a real photograph that shows
exactly how the garment the shopper
is looking at will fit on any shoppers’
body size and shape. Their Fit Advisor
solution provides fit information
and recommendations without
photography and is aimed at retailers
with wide, shallow stock or rapidly
changing stock lines. The benefits
for retailers are threefold, according
to Fits.me – increased sales, reduced
garment returns and higher levels of
customer loyalty.
l Microsoft, Accenture and Avanade
have worked together to develop
a connected fitting room that
combines digital, cloud and analytics
capabilities. An RFID reader
automatically recognises the items’
tags and they are displayed on a
touchscreen monitor built into the
wall. If the size doesn’t fit or the
customer wants to try different items,
this can be selected through the
screen, with the request sent to a store
assistant’s smartphone. The monitor
can also offer recommendations,
different colours and matching items,
which can be brought by the assistant,
creating potential for upselling.
l The connected virtual fitting room
l collects anonymous data from each
visit, which is transformed into
insights that the store manager can
access through a dashboard via a
tablet or laptop. Store managers
can also see what suggestions for
additional items were presented to
customers and which ones customers
selected and ultimately bought.
The room, which is now ready to be
piloted, provides sales intelligence
for the retailer, driving better
merchandising decisions and allowing
managers to assess the responsiveness
of sales staff.
l The Me-Ality booth also represents
this new technologically advanced
fitting room. The Canadian invention,
which is found in 20 malls across
the US, scans shoppers fully clothed
using wave technology and produces
a profile of their body, which is stored
in an online account. US department
store Bloomingdale’s is using it
to help consumers find perfect-
fitting jeans.
Connected
fitting rooms
A long way from cramped, over-heated fitting rooms, this developing
technology allows retailers to take customer service to the next level by
building a more personal, seamless and differentiated shopping experience

12 13
The verdict
It’s a well-known fact that retailers are always
striving to better know and understand their customers.
Having more insight will enable retailers to more
accurately and competitively vie for people’s attention
and custom. Consumers will benefit too as they receive
information from retailers that is of interest and
relevance.
The consumer is far more relaxed when fully aware
of the quid pro quo of using retail technology when they
knowingly trigger the relationship. Using a loyalty card
for purchases is reciprocal – they expect you to get to
know them better as a direct consequence of choosing to
let you know what they’re doing.
The trick for retailers and financial institutions now
is to raise awareness of the benefits and outcomes to the
consumer, via appropriate channels.
Research tells us that consumers are willing to share
theirdatawithorganisationsiftheyseeabenefitindoing
so. But with consumers increasingly aware that they are
critical to an organisation’s livelihood, their expectations
are high. This means that the stakes for businesses have
increased, with the slightest error serving to irritate and
alienate customers.
If customers can see a clear and relevant benefit from
sharing their data, they will be more inclined to share
more of their data more regularly. The benefit must be
both relevant and worthwhile to each consumer from
their perspective, and consist of a simple exchange to
redeem the incentive. Retailers that secure consumers’
trust by showing that they care about their customers’
data will be the winners, improving customer relations
and ultimately brand experience.
Dave Sheppard
Experian footfall
New software that scans customer transactional data held by banks
allows retailers to better target their marketing and see where spend
is heading to competitors
l Banks hold vast amounts of
transactional data, which can be
meshed with retailer data and
data from mobile payment apps to
create a more complete picture of
consumer spending patterns.
l In September, US data analytics
firm Cardlytics launched the UK’s
first service using customers’
banking data to provide targeted
retail offers. Cardlytics’ software
trawls through millions of daily
transactions and uses past
purchases to offer marketing
material on behalf of retailers,
which is based on a shopper’s
buying patterns.
l The offers will appear on shoppers’
l online and mobile bank statements
and redemption is fully automated –
after an offer is activated, customers
pay with their card in store and see
the discount taken from the price on
their bank statement.
l The service allows retailers to
l provide deals based on where people
live by using postcode information.
It also shows where shoppers are
spending and whether the bulk of
their spending is at competitors.
l Cardlytics has partnered with
l Lloyds Banking Group to provide
Halifax customers with targeted
deals from retailers straight to
their online bank statement. The
service, called Halifax Cashback
Extras, has already attracted the
likes of Homebase, New Look,
Ocado, The Body Shop and
Urban Outfitters.
l Data startup ERN has developed a
platform called Looop that enables
merchants and banks to capture
the ‘big data’ created by every card
transaction, store it and analyse it
in order to create bespoke, targeted
offers for individual customers.
These offers can be pushed to a
customer’s smartphone and is
intended to boost loyalty and long-
term custom. The platform went live
in the first UK stores in November
in association with The Retail Data
Partnership.
Data services
The verdict
Digital wallets have the potential to solve a number of
customer experience problems that retailers grapple with,
bothintheofflineandonlineworlds–whetheritisshaving
a few seconds off the queue for a customer doing their
weekly shop, using a smartphone to pay for the morning
lattewithoutbeingburdenedwithsmallchangeorensuring
customers’ online checkout journey is both smoother and
safer, as the Visa V.me solution aims to deliver.
Whilethecustomercaseforthisiscompelling,adoption
rates are still in their infancy because there is insufficient
clarity on the benefits of a digital wallet, particularly in
more developed economies where credit card fraud (in
relative terms) is not a big concern, such as in the UK and
US.Bycontrast,countriessuchasRussiashowsomeofthe
highest levels of digital wallet adoption. This makes the
digitalwallettechnologyparticularlyinterestingtoetailers
with a growing base of international orders.
Recognisingthatthepaymentslandscapewhichplumbs
retail transactions could be ready for a change, a number
ofplayersareadvancinginthisspacewiththeirsolutions–
from the very established payment schemes (Mastercard,
Visa), to online payment providers (PayPal), operating
systemproviders(GoogleWallet,ApplePassbook),start-ups
(Square, Level Up) and even Amazon’s Checkout solution.
For some of these players the attraction is not purely
access to the payments opportunity, but also access to
consumerinformationacrossonlineandofflinepurchases.
As the technology evolves, we expect the industry to
consolidate and potentially even see some breakthrough
partnerships emerge.
Despitethenumerousplayersinthelandscape,thequiet
winners in all this might be the retailers who obsess about
makingtheshoppingjourneyoftheircustomersfrictionless
andhaveearnedtheircustomers’trustintheprocess–the
Amazon 1-click system, for example, goes a long way in
reducing customer friction. As does the Starbucks app
that makes coffee runs easier and faster. Applications
such as Square will open up new markets and work better
for informal peer-to-peer activity at the local craft fair or
car boot sale.
This could become an all-pervasive technology, but
will require solution providers to market themselves with
more clarity and vigour if consumers are to see this as the
safestwaytoshop.Theindustryisstillatitsnascentstages
in terms of customer adoption, with no one clear winner
emerging yet.
Anita Balchandani
OCC Strategy Consultants
l An e-wallet is a payment method
using any device that connects to the
internet. They are designed to help
people shop more quickly and securely
online and in store. The digital wallet
software allows those connected to
the internet to transfer money to
businesses or other mobile users using
near-field communication.
l It’s useful to approach the term ‘digital
wallet’ in three parts: the system
(the electronic infrastructure); the
application (the software that operates
on top); and the device (the individual
portion).
l Digital wallets are the norm in places
such as Japan and Korea, but the
West is catching up with telecoms
companies, financial services firms
and tech businesses all fighting for
space in a growing market.
l Data stored on the device can include
bank account details, loyalty cards,
drivers’ licences. This opens up the
possibility for transactions and
verification of details, such as proving
age when purchasing alcohol.
l PayPal recently refreshed its app and
introduced PayPal Beacon – a small
hardware device that links merchant
POS systems to customer PayPal
apps via Bluetooth Low Energy. This
allows customers to make hands-free
purchases in stores and restaurants
using their PayPal account.
l Mastercard’sMasterPassletsusers
uploadpaymentandloyaltycarddetails
toacompatibledigitalwallet.Users
thenauthenticatethetransactionusing
theirregisteredpassword.
l Visa’s wallet, V.me, launched across
Europe in November, with Dixons
Retail and Clarks among the first to
offer it. V.me stores customers’ card
details without them being passed on
to the retailer. It is available in the UK,
France, Spain and Poland, and 1,400
merchants are already signed up. Visa
expects half of its business in the UK
– £383.6bn – to be through digital
wallets by 2020.
Digital wallets
Digital wallets offer the possibility of a more convenient checkout, as
smartphones eliminate the physical hassle and psychological hurdle of
cash and credit cards

14 15
The verdict
Not only are consumers looking for in-store retail theatre
andthe‘wowfactor’,retailersaresearchingforinnovation
tomakebetterreturnsfromsmallerformatstoreswithout
reducing the choice or range of goods.
Endless aisles offer a great opportunity for all retailers
because not only do they offer a portal to the entire range
andselectionbuttheycanalsobeopenallhoursandconvey
farmoreinformationandcontentthanatraditionalshelf.
The Adidas wall is a great example of the classic
challenge of how to surface the full range in a single wall.
With a background in footwear, I know only too well how
easy it is to go to market with too many styles and SKUs
and one of the hardest decisions to make is how to cut
the range to match the store space. With a virtual wall
allowingaccesstoafullrangeofstylesandcolouroptions,
the consumer has more choice and the retailer has more
shelf space.
With so many digital assets available today, the
added benefit is that more return can be reaped from the
investmentalreadymadeincontentandcollateralallowing
the line between the digital world and the product line to
become blurred.
Tracking usage and interest of the wall allows
for deeper consumer insights too. Certain products
may get a lot of attention but fail to sell – this can be
very helpful to merchandisers in their product
development cycles.
Done well, utilising the right natural user interface,
an endless aisle brings impact and choice to the retail
environment and adds theatre – a win-win for both the
retailerandconsumer.Withsomanyoptionsandformats
nowavailable,Ipredicthighgrowthintheuseofdynamic
digital displays as sales success from the walls leads to
further roll-outs. We will see much more use of these
attentiongrabbing,dynamic,cost-effective,versatilewalls
in retail.
Mike Lynskey
Microsoft
By replacing physical aisles and products with digital interfaces, virtual
retail reduces the costs of storing and replenishing inventory. The innovation
combines the cost efficiencies of etail and the physicality of bricks and mortar
l In 2013, Adidas had a 500% jump
in sales of the football boot cleat
available through its endless aisle
wall, compared with a similar shoe
it launched six months earlier at the
same price. The wall stands seven
ft tall, is split into sections that can
be detached to alter the width and
features a touchscreen showcasing
digital representations of a product
along with information, availability
and price, as well as a Twitter feed
of customer comments. Using the
touchscreen and precision real-time
3D rendered products, shoppers can
select products on a virtual shelf,
pull products, look onto the product
from any angle, rotate it, zoom
in, and get further product and
technology information.
l Macy’s in the US has introduced
the Beauty Spot kiosk – a rounded,
seven ft tall, four ft wide structure
inlaid with interactive touchscreens
on both sides that enables shoppers
to browse the store’s makeup
selection.
l In the run-up to last Christmas,
Tesco installed an 80-inch
interactive touchscreen in its
Cheshunt store, giving shoppers
interactive access to 11,000
products. It followed trials of virtual
grocery stores in a South Korean
subway and at Gatwick Airport,
where commuters could scan
a QR code using a mobile device
to have the item delivered directly
to their home.
l Retailers that create virtual aisles,
and accompanying applications,
could track customers’ paths
and interactions with aisles and
products, offer tailored discounts to
shoppers, guide shoppers through
the store or to desired sections and
allow shoppers to check inventory
or products on hold.
Endless aisle
interactive walls
The verdict
Facial recognition has arrived, and there are now fast and
accurate systems available with reliable matching. Facial
recognition has distinct advantages over other biometric
systems because of its non-contact process – face images
can be captured from a distance without touching the
person being identified.
In retail there are a number of areas where facial
recognition can play a part. The most obvious is security
where it can be used to track known criminals or
undesirables and alert the retailer, and also for staff
recognition at point of entry or for secure areas.
As the technology becomes more affordable and
sophisticated it can be used to track consumers and allow
retailers to know their customers better. Shopfloor staff
can be alerted to returning customers and have the ability
to call up previous purchase history. With some luxury
brands, where there is a relatively small number of high-
spendingclientele,therewouldbegreatbenefitinknowing
exactly when these valued shoppers are in the store. Facial
recognition could alert the retailer on entry and allow
the assistant to greet by name and quickly access prior
purchase history.
I believe younger shoppers will be more comfortable
with the notion of allowing facial images to be captured
and linked to their shopping bag, payments and even
personal details if it leads to a speedier service and more
personalised shopping experience. A loyal customer could
register their details with the retailer and this would be a
valuabletooltoconfirmidentitywhenprocessingfinancial
transactions, or frequent customer card programmes. It
may even be used for a fast-track contactless payment line
where the consumer can literally scan and go.
Whilefacialrecognitionhasyettobefullyimplemented
outsideofthesecurityindustryandbordercontrolagencies,
it is surely an area of technology that will soon be more
widely adopted in retail.
Mike Lynskey
Microsoft
l For high-end boutiques, facial
recognition technology is being
used to ensure potentially lucrative
sales are not missed by staff. Facial
recognition software developed by
NEC IT Solutions involves customers
preregistering themselves at the time
of purchase or online. The software
scans customer faces as they enter the
boutique. If the software recognises a
face in the database, an alert will be
sent to the employees via computer,
tablet or smartphone. Staff will be
able to access the customer’s clothing
sizes, favourites and spending history.
NEC IT Solutions found that many
customers did not mind sharing
their private information if it meant
a more personalised and quicker
shopping experience.
l Finnish company Uniqul has
launched technology that lets people
pay their bills using their face. The
user clicks ‘OK’ on the Uniqul tablet,
and in the background algorithms
are processing the biometrical data
to find the user’s account in its
database as they approach the
cashier. The whole transaction
takes less than five seconds.
l PayPal launched a similar service
in an area of London in August,
with users’ names and photos
appearing on shop payment systems
for those paying by mobile. Once
a customer has checked into the
PayPal app, their name and photo
appears on the shop’s till, and the
cashier charges them by clicking on
the shopper’s profile picture. The
customer gets an alert on their
phone to let them know how much
they’ve paid, as well as PayPal’s
usual email receipt.
l Facial recognition technology
divides opinion in terms of privacy,
as companies are urged to carry out
privacy impact assessments. But
the technology could receive greater
public approval in the future as it
becomes more widespread.
Facial
recognition
The developing facial recognition computer application enables retailers
to identify a customer individually and tailor pricing and service based
on in-store behaviour and financial history

16 17
The verdict
Field analytics is the intelligence behind knowing your
customer and their buying habits. Tesco’s recent use
of scanners to personalise advertisements screened to
consumers is a valuable tool in tailoring content based
on the audience.
At its simplest level, field analytics can tell the gender
of the customer and adapt the linked dynamic digital
displays to show relevant content. However, more
sophisticated systems are available that can measure
real-time behaviour and respond accordingly.
With devices attached to the digital displays, the
state of the display can be changed to a more immersive
one with deeper content to reflect the higher level of
engagement. As a person stands in front of the display
and shows interest their behaviour can be tracked and
logged. Not only is it more engaging for the consumer
and more likely to convert interest to a sale for the
retailer but it also allows for consumer insights.
A number of displays, or windows, can be monitored
and analysed to show interest levels from consumers
as well as offering age and gender analysis to compare
success from location to location.
In large format stores where the consumer journey is
importanttotrack,thesefieldanalytictoolscanbeuseful
in monitoring the flow of people and allow the retailer
to adjust layout, signage or product to optimise the sales
and time in store.
These high-level anonymous demographics are
immensely useful to retailers and brands alike to better
understand the profile of their customers and as they are
more widely deployed will be used throughout the high
street and beyond.
Mike Lynskey
Microsoft
Sophisticated field analytics systems are being used to measure real-time
shopper behaviour, which collects data on consumers and allows retailers
to analyse the information and respond accordingly
l EyeSee mannequins, developed by
Italian company Almax SpA and
costing £3,200, are installed with
recognition software to track the
age, race and sex of retail customers.
The data collected is then analysed
against an algorithm, which assessed
three million faces. Companies can
rebrand and market stores based on
the data.
l Some stores, which are currently
l anonymous, are already seeing the
benefits – one retailer identified
a peak in customers of an Asian
background entering a particular
entrance every afternoon and
discovered a tourist bus was stopping
at the entrance every day at 5pm.
Asian sales staff were placed at that
entrance and sales were boosted
22%. This technology can be
particularly useful for stores with
a number of street-facing window
displays, such as Harrods, to find out
which work best and the number of
people showing interest in particular
displays or items.
l In November, Tesco announced
that it will be installing cameras
and screens at 450 petrol station
forecourts to help it determine the
age and gender of customers as they
queue at tills. The information will be
fed to advertisers so targeted ads can
be shown to specific demographic
groups in real time. The technology,
OptimEyes, is provided by Lord
Sugar’s Amscreen. The company
insists that the technology is face
‘detection’ software rather than
facial ‘recognition’, and data
about a customer is immediately
anonymised and processed as
a string of numeric data.
l Google is thought to be developing
similar technology. A recent patent
from the firm showed software
that could detect the emotions
of a user as they look at an
advertisement, creating a pay-
per-gaze ad revenue system.
Field analytics
The verdict
Firstly, while fingerprinting technology delivers a clear
functional benefit, the emotional dimension is worth
considering when predicting the adoption path that
the technology may take. Consumers will be concerned
about handing over their unique fingerprint details to a
broad universe of players. Fears of privacy, hacking and
counterfeits will temper adoption rates. Brands that
successfully deploy this technology will need to be those
that inspire enormous consumer trust.
Secondly,thetypeofscannersusedaretypicallylikely
todegradeintimeorstartmakingmistakeswhenafinger
issmudgedwithgreaseorsweat.Applemayhavefounda
solutiontothisfingerprint-scanningproblemandcreated
the Touch ID sensors for the iPhone 5S – whether this is
a sustained improvement in mobile authentication or
whether the four-digit passcode is resurrected remains
to be seen.
The technology will be most relevant for retailers
whose business models are particularly reliant on the
mobile phone as a browse and buy channel, but they
will need to be businesses who have garnered sufficient
consumertrustinordertoreduceasmallpointoffriction
for its customers. Expect this technology to be less of a
game-changer than one might originally anticipate.
Extendingbeyondtheworldofmobileauthentication,
retailers are also testing the use of fingerprints to
authenticate POS terminals. However, the technology
to make this happen cost effectively is not here and
the benefits to the customer in terms of greater speed,
ease and security above codes may be outweighed by
concerns around privacy and fear of identity thefts. The
players in the banking and payments world also have
to heavily back this switchover if it is to translate into a
universal application.
Overall, for the consumer and key industry
participants, the benefits of fingerprinting applied to the
traditional POS terminal are unlikely to outweigh the
investmentandeffortitwouldtaketorollthisout.Itmay
howeverfindafocuseduseinauthenticationofterminals
by staff as the world of POS evolves from fixed to mobile.
Anita Balchandani
l Fingerprinting imaging can be optical
or capacitative (like a touchscreen). In
either case, the result is a map of the
ridges on the fingertip. Software then
looks for features such as direction
changes and bifurcations (where one
ridge splits into two), the pattern of
which is unique in every person.
l Recognition software can be
attacked with fake images – prints,
casts and severages. Many devices
incorporate other checks, for example,
looking for heat or a pulse, to get
around this.
l Between October 2012 and March
2013, French supermarket chain
Auchan and DIY store Leroy Merlin
ran a trial where 900 customers used
their fingerprints instead of entering
PINs. Almost 5,000 transactions were
completed with an average of more
than €50 (£42) – 94% of participants
would be willing to continue to use
fingerprint scanning. A widespread
roll-out of such a technology is
a substantial undertaking, with
POS terminals needing additions
or upgrades to include fingerprint
scanning. The benefits are a
perception of improved security over
PIN and faster transactions. There
are downsides, however, with public
trust of third parties holding their
fingerprints a potential problem.
l Apple’s high-profile inclusion of a
fingerprintreaderasanauthentication
device on the iPhone 5 increases
consumer awareness of the benefits
— and fallability — of fingerprint
scanning. Because the scanning takes
place on your own device, Apple
claims that your fingerprint data is
never sent to Apple or stored centrally.
l Biometric technology company
SmartMetric recently revealed a
fingerprint-activated EMV card
(Europay, Mastercard and Visa)
where a fingerprint reader is built
into the card and is used to activate it.
This adds a layer of security without
needing retailers’ terminals to be
upgraded or the user’s fingerprint data
to leave the card. SmartMetric is in
discussions with banking partners
and expecting to do public trials this
year and launch in the US, Asia and
Europe in 2014.
FINGERPRINTING
Whether it is the use of fingerprints to authenticate and secure POS terminals,
activate cards or improve mobile browse and buy channels, this technology
is gaining traction in the retail space

18 19
The verdict
TV shopping has always been a small and growing
segmentintheoverallretaillandscape,particularlywell-
suited to retailing products that benefit from product
guidance,demonstrationsandvisualdetail.Buttheworld
ofinteractiveTVmaynowbeexpandingbothinthehome
and outside it in stores.
In consumers’ homes, the pervasiveness of the
multi-screen household make the boundaries between
entertainment,learningandshoppingporousasfamilies
watch their favourite TV shows while multitasking with
a second device. Applications such as Zeebox bring
in a more integrated second screen experience, with
multiple feeds of information and immediate access to
social media channels. These make it a good potential
channel for brand owners to engage directly with their
customers. Navigating TV through a tablet is also a
superior experience that will hopefully put an end to
clunky remote controls that remain difficult for even
those with the most agile of fingers.
Another application of interactive TV is the role that
it can start to play in store. Lego’s use of its interactive
augmented reality digital boxes, which allow consumers
to see what the Lego sets will look like when they
have been fully assembled, is a great application in
bringing product in a box to life. Children just have
to hold Lego boxes up to the digital box to watch a 3D
animation of the product – from all angles, in every
detail – in their hands.
Overall, these developments are particularly
interesting for brand owners who may achieve the
unattainable goal of delivering content that can be both
brand enhancing and commercially effective. It also
becomes possible to better measure and demonstrate
the return on TV activity.
The technology opens up many imaginative ways to
engage with consumers, and the technology will only
get better. However, it is worth pointing out that in pure
commerce terms this is likely to remain a ‘niche’ way to
shop–itwillbearoutetogettoyourcustomersbutbyno
means the main or the only route.
Anita Balchandani
TVs that can run applications, have web-browsing capability and social
media connectivity create myriad opportunities for retailers to engage
with consumers in their homes
l 46% of smartphone owners and 43%
of tablet owners use their devices while
watching TV. But these are not just
distractions. Consumers are using
these second screens to search for
things that are directly related to what
they are watching – in fact, almost half
of tablet owners look up information
about what they are watching,
according to Nielsen.
l Interactive TV could offer people the
opportunity to shop directly from
their TV. Buying an item shown on a
programme, worn by their favourite
actor, or featured in an ad could be
the next big shopping phenomenon.
More than one in four consumers are
expected to be using interactive TV by
the end of next year, generating sales of
almost £750m, according to an eBay
study carried out by Conlumino.
l Sales of smart TVs have increased
by 211% over the past two years,
according to Telescope in March 2013.
l Most retailers have shied away
from this style of innovation so
far. Interactive TV is viewed as an
emerging space and smart TVs,
while growing in numbers, are still
yet to become a common feature
across most British households.
l Marks Spencer has created an app
for Samsung’s smart TV platform,
which allows viewers to browse
product ranges and gather tips on
food and fashion – all via the remote.
The ecommerce capability consisted
mainly of QR codes integrated into
the videos.
l Earlier this year, etailer Littlewoods
launched an interactive TV advert
featuring audio-recognition
technology. When viewers saw the
Shazam prompt during the advert and
activated the app on their smartphone
or tablet, they were directed to a
campaign site.
l In the US, eBay has unveiled an iPad
app to allow users to shop the etailer
for items related to what they are
watching on TV.
INTERACTIVE TV
The verdict
When it comes to mobile loyalty applications, retailers
should start with understanding how these applications
can support the consumer service basics, such as having
productsinstock,makingiteasytofinditemsandmaking
it easy to find product information. The ability to check
stockavailability,checkandcompareprices,readproduct
reviews and receive promotions is also high on the list of
things that consumers want to do with their mobile.
While Gartner consumer research indicates that
customers are willing to receive promotional offers on
their mobile devices, these need to be easy to redeem
across the channels. There are a number of solutions
available from mobile marketing vendors whose focus is
mainlylocation-basedmarketing,orvendorswhosemobile
solutionsallowcustomerstoscanaQRcodeandpayfrom
the mobile device to purchase that particular product or
service. However, these are not yet generally built into a
single platform and thus easy to redeem across retailers’
key trading channels.
Increased customer satisfaction will result from the
ability to provide loyalty functionality in any channel,
particularly mobile as the fastest growing channel and
the one that provides the most access to retailer offers to
the consumer. Retailers using mobile loyalty systems will
have an enhanced ability to segment customers based on
improvedcross-channelvisibilityintoconsumeractivityin
those channels and consumers will, in turn, benefit from
better targeted offers by retailers.
Retailersneedtobecautiousofthehypearoundcontext-
aware, real-time offers that are delivered to consumers’
mobile devices. Gartner research continues to show that
consumers are not readily interested in these types of
personalised rewards. Retailers need to invest resources
in educating customers on how they could benefit from
context-aware offers to improve the overall shopping
experience, as well as build loyalty from the small base of
customers that may be interested.
Many retailers are exploring the possibility of building
a multichannel loyalty system that is capable of handling
any new channel. However, most investments remain
directed at improving the channels that retailers already
use to transact and interact with customers.
John Davison
Gartner
l Consumers have more access to
loyalty schemes on their phones
than in their wallets, according to
a survey by e-wallet technology
provider CloudZync. The survey
found shoppers access an average
of six loyalty schemes through their
mobile devices, compared with
just four traditional loyalty cards
in their wallet.
l Coffee shop Harris + Hoole has a
loyalty app that enables customers to
order ‘my usual’ at any branch through
their phone. Harris + Hoole partnered
with app designer Ribot, which
developed a flat user interface style
and integrated pull-down gesture
that customers use to check in. The
design embraces the physicality
of a traditional loyalty card.
l The Shop Scan Save smartphone app,
powered by Mobilize Systems, creates
a unique saver ID on the smartphone
and the Store Finder feature directs
the user to the nearest of 22,500
participating stores with a PayPoint
machine including Spar, Co-op,
Costcutter, Londis, Nisa, as well as
thousandsofindependentconvenience
stores. It enables customers to save up
to £250 per year on their convenience
store shopping. The scheme has more
than 70,000 users and the deals are
personalised and sent every fortnight
to customers’ smartphones.
l The emergence of mobile wallets is
likely to take digital loyalty to the next
level, providing the ability to recognise
customers as they enter the store, offer
real-time rewards as they search and
browse and then deliver bonuses as
they swipe the device.
l Just how loyalty programmes become
integrated into mobile wallets and
consumers’ speed of adoption are
big questions for the sector. But
combined with other technology,
such as near-field communication,
mobile wallets could make the
delivery and redemption of loyalty
offers less confusing.
Mobile loyalty
schemes
Consumers are increasingly willing to receive promotional offers on their
mobile devices. Retailers have responded by providing mobile loyalty apps and
platforms to enable their loyal customers to receive multiple personalised offers

20 21
The verdict
Captchaexploitsthefactthattherearestillsometasksthat
humanbrainsdoquiteeasilybutcomputersstrugglewith.
Thecaptchamostoftenusedonlinethesedaysissomeform
of masking words or letters using visual distractions such
as lines, shapes and background gradients or images. In
theearlydays,word-basedonlinecaptchawasfairlybasic.
Butasprogrammersdevelopedmoreadvancedtechniques
for figuring them out, the captchas had to get more and
more complex to the point where the words have been
replaced with random collections of letters, which most
people are finding frustratingly complex.
London-based Future Ad Labs have abandoned the
word-scramblingapproachinfavourofhavingpeopleplay
simplemini-games.Forexample,onePlayCaptchahasthe
userdraganddropanimatedeyes,nose,andamouth,but
not a salt shaker, onto a blank face.
In a stroke of clever salesmanship, the company also
realised that should make it easy for host websites to
integrate their own brand into these mini-games. For
example, a Heinz PlayCaptcha lets users drag and drop
chillies into a bottle of Heinz ketchup and then takes a
quick second to introduce a new product: Heinz Tomato
Ketchup blended with Sweet Chilli.
All in all, Future Ad labs has introduced what looks to
be a much needed new chapter in captcha tests and, for
now, the games are easy and fun.
But let’s not forget that we’re in a never-ending race,
trying to stay one step ahead of a bunch of young, smart,
motivated programmers. Eventually one of them will
make a breakthrough, and then even our easy and fun
PlayCaptchas will need to start getting more challenging
in order to still qualify as a captcha.
Interacting with customers online in an engaging way
using PlayCaptchas, rather than irritating them with
traditional captchas, could be a powerful tool for online
retailers to boost engagement.
Brendan Mislin
Accenture Mobility
PlayCaptcha is an innovative way to boost shopper engagement with retailers
or brands, as well as putting an end to frustration over online security features
l Captcha came out of Carnegie Mellon
University and stands for ‘completely
automated public turing test to tell
computers and humans apart’. The
tests, which are usually found when
completing a sign up form or at point
of purchase, are designed to be hard
for robots and easy for humans. But
they are a common bugbear for those
shopping online. In Australia there’s
a campaign to reduce their use.
l There are alternatives to captcha
including honeypots, which involve
creating a field that needs to be left
blank in order for the form to be
successfully submitted, simple maths
questions, time limits (setting longer
times for human entry as opposed to
instantaneous computer-led entry)
and games.
lDesigned by advertising agency Future
Ad Labs, PlayCaptcha is an interactive
advertising format that allows retailers
and brands to carry out security
checks through entertaining rather
than frustrating customers. Heinz
and Reckitt Benckiser have already
installed it. For Heinz, PlayCaptcha
invites users to pour a virtual bottle
of salad cream onto a sandwich. For
Reckitt, it asks users to clean a virtual
dirty penny by dragging it into a bowl
of Cillit Bang. It is fully cross-platform
and solvable on touch-enabled devices.
l Early research between June and
July 2013, conducted by Vizeum
in collaboration with Future
Ad Labs and Heinz, shows that
91% of respondents found
PlayCaptcha to be a better user
experience than standard word-
based captchas. 90% recall the Heinz
product following the completion
of the task.
l There are 300 million captchas
completed every day. The concept of
games as captchas, which add another
layer for brands to engage with
customers online rather than irritate
them, is potentially very powerful,
especially for online retailers.
PLAYCAPTCHA
The verdict
Natural user interfaces (NUI) technology, in its various
forms, has the potential to rebase how humans interact
with technology and, as a consequence, transform
elements of the shopping experience as well.
One could argue that the early stages of this
technologyhavealreadyplayedout–forthegenerations
who now take Kinect and even iPads for granted, there
will be no going back to devices such as the remote
control, keyboard and mouse.
The next wave in growth will come through
developmentsinwearabletechnologies.Infact,thewrist
watchmayarguablyhavebeenthefirststeptowardsthis
journey, which devices from the Jawbone to Google
Glasses will only continue to materially advance. In
time, it is safe to assume that the interaction between
man and computer will become much more integrated.
The retail applications are also manifold, particularly
in categories such as fashion where pain points in the
customer journey such as the trial room can be made
moreinteractiveandlesscumbersomeatthesametime.
Imagine being able to stand in front of a mirror that
can then suggest the jeans that would best fit your body
shape rather than the painful experience of trying on a
shortlist one after the other, with limited success. Also
imaginebeingabletotryondressesthatareoutofstock
or only available to order online.
NUI could democratise personal shopping for all
and bring the virtual endless aisle to life for customers,
improving sales conversion, attach rates and order
values.
Anita Balchandani
l Natural user interfaces (NUIs)
are the next step for graphical
user interfaces (GUIs). GUIs were
groundbreaking in the 1980s
because they allowed users to
manipulate objects through a control
device, such as mouse and keyboard.
l NUIs take the control device away
and replace it with the users’ natural
communication language, such as
gestures, body movements, speech
and vision. Users manipulate digital
objects as they do with physical
objects. Touchscreen interfaces let
users interact with controls and
applications more intuitively than
a cursor-based interface because it
is more direct. Gesture recognition
systems track user motions and
translate those movements to
instructions.
l Retailers and consumer goods
manufacturers are among those
creating applications that allow
customers to interact with
computers by gesturing and
speaking. Coca Cola has installed
a vending machine in South
Korea that combines Microsoft’s
Kinect motion controller and a
dancing game involving a popular
band. Stand and match the band’s
moves and you get a free Coke.
Bloomingdale’s has also used the
technology for an interactive virtual
dressing room experience, which
has the ability to see, hear and
understand gesture.
l US-based NUI developer Zugara has
created the Webcam Social Shopper
software, which turns a user’s
webcam into a mirror, enabling them
to use hand gestures and motion to
shop while standing in front of their
laptop or PC. Etailers including US-
based K-Bee Leotards, Australian
Life-Styler and Malaysian Zawara
are all utilising the webcam software
online, and Mahindra Retail in India
is rolling out the NUI technology
in its Mom Me stores as well as
online. In addition, the software has
recently been optimised for kiosk use
– at the South African Fashion Week
in April, Zugara showcased units
that featured a camera for gestural
control and an additional display
screen for video advertisements.
l NUIs can draw customers into the
business—making it possible for
retailers to share offerings, cross-sell
and upsell merchandise, and bring
the endless aisle concept to life.
Natural user
interfaces
Retailers are trying to bring the interaction shoppers have with their phones
to the big screen via natural user interfaces, which uses motion, gestures and
voice to shop rather than a keyboard and mouse

22 23
The verdict
Rapid Scan is a retail technology that massively
improves the speed with which items can be scanned
on a retail conveyor belt. Cashiers are not required to
manually handle and scan items – therefore there is a
time saving. However, how many times do consumers
stand looking at their watches, waiting for the cashier
to catch up? Unfortunately, it is normally the other
way around.
Part of Wincor Nixdorf’s Rapid Scan proposition is
the inclusion of a partitioned two-lane bagging area –
a necessity to cope with the fact that the items can be
transportedandscannedquickerthanpeoplecantypically
load and then bag them. This allows a cashier to process
two sets of transactions in a phased/near simultaneous
approach – as opposed to sequentially. This two-lane
approach represents a significant process improvement,
which any retailer with a main bank of cashier-style
tills can implement.
The Rapid Scan solution also has a couple of
limitations, in that the preferred payment process
is cashless, and non-standard items, such as loose
vegetables that require weighing, still require manual
intervention.
Of the entire end-to-end process of paying for a large
trolley of grocery items, the time to load, bag and pay for
items remains unchanged. Therefore, the actual scope
of the benefit of this technology needs to be understood
beforeassumingitisthesilverbullettocurelongcustomer
queues. Setting up a Rapid Scan till point with just one
bagging area would unfortunately prove this.
Effectivequeuemanagementthroughcorrectstaffing
and availability of POS cashier locations is still arguably
more important than having an insufficient number of
Rapid Scan POS locations that are under-staffed. Also,
speed isn’t everything. The provision of customer service
and engagement between cashier and consumer is
also seen as a key ingredient – even if it does take
valuable seconds.
Having said this, Rapid Scan is an impressive
technology that will contribute to queue management
efficiencies including the perception of speed and
improvement by the end consumer, and therefore should
beembracedasanenablerforqueue/paymentefficiencies
in busy cashier environments.
Dave Sheppard
Experian footfall
Improving the speed with which shoppers can check out is central to new
rapid scan systems that have now reached the UK. Lasers enable hundreds
of barcodes to be read every minute
l It’s been a decade since self-scan tills
were introduced in UK stores, but
they are still dividing opinion. Get the
service and technology wrong and
shoppers walk away – one in three has
done so. Recent research shows more
than half of consumers think it takes
longer to self-scan (Tensator, October
2013). But get it right and it can
enhance the shopping experience.
l Asda has introduced a new scanning
system that allows customers to scan
whole weekly shops in seconds. The
Rapid Scan Till, available in its
York store, uses laser scanning
technology that picks up barcodes
from every angle and a conveyor
belt to move groceries on to the
bagging area. Scanning speed is
increased and it also has a split final
section, meaning two people can
bag shopping simultaneously.
l Asda says Rapid Scan could cut
queue times in half. Customers
place items on the belt and the
360° scanner portal registers their
purchases automatically, scanning
the item barcodes at speeds of up to
60 items per minute (the norm is 30).
Items without a readable barcode
are photographed and then scanned
manually, as are bulky goods. The
technology is designed by German
tech firm Wincor Nixdorf. Grocers
Rewe in Germany, Dia in France and
ICA Gruppen in Sweden piloted the
system two years ago.
l Motorola has the MP6000 multi-
plane bioptic scanner, which facilitates
mobile-based customer loyalty
schemes. New capabilities can also
be added, such as a scale, handheld
scanner or a customer-side scanner to
allow customers to scan barcodes on
their mobile phones and loyalty cards.
Rapid scan
systems
The verdict
We’ve all walked into a shop, found the item we came to
buy, taken one look at the massive queue and decided
to place the item back on the shelf and walk out empty-
handed. Customers don’t like queuing and retailers don’t
like being the bottleneck, and it’s exactly for those reasons
thatretailershavebeenexploringwaystoreducewaittimes.
There are dozens of effective automatic queue
management systems on the market today based on a
variety of technologies such as standard and infrared
cameras, self-scan and checkout, click-and-collect and
mPoS. Most provide useful metrics such as ‘average
customer wait time’ or ‘till idle time’, each of which can
enable an automated system to signal the opening/closing
of tills at the checkout.
One such deployment that made headlines several
years ago was the Irisys SMARTLANE solution deployed
in Tesco. This solution was based on ceiling-mounted
infrared cameras that detected the heat signatures given
offbypeopleandcalculatedkeymetricstohelpthemmake
basicdecisionssuchas‘Shouldweopenanothertillornot?’.
Whenthesystemlaunched,Tescoestimatedthatithelped
250,000 customers per week avoid queuing.
A more recent solution to a slightly different problem
can be seen in House of Fraser’s virtual queuing system.
Customers who opt for their buy-and-collect service have
the ability to check-in upon arrival at a self-service kiosk,
afterwhichthey’llbesentatextmessageinformingthemof
theestimatedwaittime.Customersthenhavetheoptionto
browsethestorewhiletheircollectionisprepared.Allinall,
it’s a more pleasant experience for the customer and it has
several potential benefits for the retailer as well.
Another technology successfully busting queues is
the technology of self-scan/self-checkout. When first
introduced, several stores relied on handheld devices
specifically purchased for the pilot. However, more recent
pilotshaveshowntheabilitytoenablethesametasksfrom
the comfort of the user’s very own smartphone.
Whether we realise it or not, automatic queue
management systems are deployed all around and are
alreadyhelpingtoreduceourin-storewaittimes.Thatsaid,
there’smoreworktobedoneinthisfield–afactmanyofus
are reminded of daily when we go to grab a sandwich for
lunchandendupwaitinginaqueueforfiveminutestopay.
Recent innovations in queue management systems
are changing the ways retailers control queuing, but the
industryneedstocontinuetoupitsgameinthisvitalarea.
Brendan Mislin
Accenture Mobility
l 56% of Brits are less likely to return
to a store if they’ve had to queue for
too long, with the tipping point set at
just less than six minutes, according
to research by Omnico. A Tensator
survey found that 26% of shoppers
spend the time standing in the queue
thinking about how the shopping
experience could be improved.
l Tesco, Asda and Waitrose have
introduced drive-thru click-and-
collect services in their car parks so
customers don’t have to go in store.
l Sainsbury’s is testing scan-and-go
technology so customers can scan
products on their phones before
checking out at the till. Not only does
this reduce queue times, but there’s
no investment in devices for retailers
because the mobile scanning apps rely
on shoppers’ own technology.
l Paperchase has trialled an Omnico
mobile point of sale in Glasgow.
Loaded to an iPod Touch, it comprises
a Verifone VX600 payment device and
a Zebra MZ320 mobile printer. It has
cut queue times in stores and means
staff can capture loyalty programme
data and encourage link sales.
l Miura Systems launched the M007
mobile point of sale in November,
which allows retailers to take card
payments using smartphones or
tablets using Bluetooth.
l House of Fraser started trialling a
virtual queuing system in September
for customers using its buy-and-collect
service. Consumers check-in at self-
service kiosks and browse until they
receive a text to say their order is ready.
l Some developers have built their own
ticketed queueing system mobile app
that shows shoppers how long the
queue in a store is for the changing
rooms and allows them to take a
place in it. When it’s their turn in the
changing room, their mobile will act
as a buzzer.
Queue
management
systems
Queue management systems have moved on. Retailers are trialling a variety
of innovative ways to ‘control’ queuing and cut waiting times, whatever
channel their customers use

24 25
The verdict
The ability to manipulate your own image with a wide
range of transformation and animation capabilities
enables consumers to try on and try out various products
and services. These systems provide user specific, highly
targeted promotion of products on user images for
unprecedented levels of personalisation.
The technology allows you to have a complete cosmetic
makeover – go from being a blonde to a redhead, visualise
yourself a different size, see your home in a new colour,
purchaseaccessoriesforyourfriendsorsimplytryonanew
look with just a simple click or gesture. By uploading your
image you can try on products without leaving home in a
photo realistic manner that is the next best thing to going
to the shop.
Thesesystemscaneitherbeusedinstoretoenhanceor
replace the changing room or used to allow consumers to
virtually try on outfits from home.
Like the endless aisles, these mirrors will enable
retailerstosavespacebyreducingtheneedforfittingrooms
and full ranges, as the outfits can be digitally viewed and,
of course, they make the process of selection and trying on
far quicker and more fun.
Of course they cannot replace the fitting room
experiencebuttheycanhelpnarrowtheselectionandoffer
suggestions,aswellasenableconsumerstoeasilycompare
lookssidebysideandshareimagesthroughsocialnetworks
to seek valued opinions. But most importantly they will
bring fun to the shopping experience.
Wheretherearesmallerformatstoreswantingtoshow
fullerlineofferings,orwheretherearefasterfashionranges
where retailers want to grab attention and offer a quick
makeover suggestion, these mirrors could be ideal. As the
technologyhasnowimprovedandtheimageshavebecome
more lifelike, virtual mirrors are bound to become more
commonplaceandpartoftheretaillandscapebothinstore
and at home.
Mike Lynskey
Microsoft
New generation virtual mirrors have become more widespread in 2013. The
developing technology enables customers to try on clothes of different sizes,
shapes and colours, which reduces the need for fitting rooms
l In the past few years a number
of retailers have tried to use
augmented reality and mirrors to
allow retail customers to try on
virtual clothes – and the technology
is finally becoming more realistic.
l Uniqlo’s Magic Mirror, developed by
Holition, allows customers to choose
what they want to buy without
trying on several different colours
– they just try one item on and the
mirror can switch the colour to help
them determine their preference.
l Tesco has trialled the mirrors in
three stores this year. Its technology
overlays a digital signage screen on
top of a ‘normal’ mirror so shoppers
can try on, for example, ‘digital
trousers’ with the shirt they are
wearing. The innovation means
shoppers can test which products
suit clothes they are already
wearing.
l Manchester’s Trafford Centre
installed a magic mirror designed
by Apache Solutions, which
allowed shoppers to try on outfits
from multiple retailers in one
place. The consumer’s size and
distance from the camera is
judged by movement sensors and
technology similar to that used
on a games console. Shoppers
can change the size or the outfit
using the mirror until they find
the best match.
l It’s easy to see why retailers are
persevering with the technology.
It opens up the stock available
online and in store to the customer,
and also means less stock needs
to be carried. This could also have
a knock-on effect to enhance
customer experience and means
shoppers could avoid fitting rooms
entirely. Retailers could free up
extra shelf space by reducing the
need for dressing rooms. The other
big advantage is that the mirror
can also be a shopping adviser,
recommending other items.
virtual mirrors
The verdict
Wearable technology is entering the mainstream, and
therefore the retail stratosphere. However, it is important
to understand the net benefit of technology we can wear,
aboveandbeyondthesupercomputerswecarryaroundin
our pockets – our smartphones. In retail, the implications
and options for consumers and retailers are different.
Consumers are increasingly going to be influenced
by technology such as Google Glass and smart watches.
Whilesomeoftheseareliterallyinyourface,theirinterface
is not. They are asynchronous interactions in response
to a data-driven prompt or a limited range of user-
invoked commands that equate to a weaker interface
with a fraction of your phone’s functionality. But
forthcoming apps and content will no doubt improve
on this, as well as other mass consumer adoption
factors such as prescription lenses. For now at least,
wearable technology will primarily act as a trigger to
begin a dialogue with a consumer, though probably
still being dependent on secondary reliable tech such
as their mobile phone to deliver the full message.
For retailers, there is a separate opportunity for
workforce management. Wearable technologies such as
Motorola’s Smartbadge enable staff to be more actively
informed, both in terms of tasks they are responsible for
andtheirinteractionwithcustomers.Partbarcodereader,
part task manager and part ‘hi, my name is…’ name
badge,thistechnologymeansthatstaffcanprovidebetter
customer service through being more informed, and also
be more effective generally on the shopfloor by being told
what tasks they should be fulfilling now.
The key to wearable technology in retail is data –
its accuracy, immediacy, delivery and relevance to the
recipient,bothintermsofrespondingtorequestsandalso
anticipatory insight. Wearable technology is merely an
accessorywithoutthis.Getthisrightanditcanbeexploited
for both sides of retail engagement.
Dave Sheppard
Experian footfall
l A companion smartwatch requires
the wearer to be carrying their
mobile – it is connected only to the
smartphone – whereas a connected
smartwatch is a standalone,
connected device that frees the
wearer from having their phone
on them.
l Sony says 41 million smartwatches
will be sold by 2016. The Sony
Smartwatch 2, which arrived in the
UK in September, acts as a second
screen for an Android phone and
can take calls, play music, take
photos, display emails and more.
l It’s rumoured that Apple is
producing its own iWatch for 2014,
which can communicate with
other iOS devices.
l Awareness of products including
Google Glass, Sony Smartwatch,
Samsung Galaxy Gear, Nike
Fuelband, Pebble and Fitbit is
relatively high, ranging from 18% to
50%, particularly among men and
the under 45s (GfK, October 2013).
l Benefits for retailers could lie in
advertising – users taking photos
of advertising or products will be
able to use the image to trigger
information or promotions from
the relevant brands. Wearable
technology could also allow
customers entering stores to
compare items in a similar way
they can online, with special offers
appearing before their eyes. The
potential for consumer profiling is
also huge, with the ability to track
consumers wherever they go and
whatever they do, including what
they look at, where they shop and
where they don’t. There could also
be internal uses, as different content
is pushed out to different members
of the team during presentations
and training.
l Motorola is touting its smart badge
as the wearable computer every
shop assistant needs. The device
is worn around the neck or on
the wrist and allows access to
wireless networks. It provides
omni-directional scanning,
communication between users
and supports HTML5 thin client
applications where the data resides
on servers instead of the device,
eliminating the risk of data theft
if the device is lost or stolen.
Wearable
computers
It’s been a big year for wearable computers, from smart badges that allow
staff to communicate with one another and access product information for
customers to glasses that could offer 24/7 profile tracking data on consumers

26 27
The verdict
Advances in 3D scanners and design tools, as well as the
commercial and open-source development of additional
design software tools have made 3D printing technology
available for a modest investment.
There has been a noticeable increase in interest in
this technology from retailers this year. 3D printing
technology has the potential to transform retail. As
printer costs continue to come down and as they become
more readily available, consumers will use these 3D
printers to ‘manufacture’ their own custom-designed
products. In the near-term retailers need to draw
consumers to their offerings and educate consumers
on the 3D printer ecosystem of software, supplies
and service.
Consumer interest in 3D printing is at the height of
hype, where the technology is featured in numerous
stories in the online and offline general media. These
press stories capture the excitement around the
technology and reinforce the need to become a part of it
or be left behind.
Until they physically see and handle 3D prints,
most consumers are confused about how the
technology actually works, what they can use it for and,
importantly, how much it costs not only for the
printer, but also for the supplies and necessary software.
Feasibility studies should include finding out the
most appropriate materials, printing methods and 3D
model formats that will best support the ways in which
youwanttouse3Dprintinginyourbusinessmodel.Very
importantly,retailersshouldensurethattheyadequately
manage the risk of violating or infringing copyright and
patentinglaws,withregardtothecreationof‘knock-offs’.
Retailers need to think carefully about how they will
support this technology to improve customer service
basics–theessentialthingsthatacustomerexpectswhen
shoppingwiththeretailer,suchasstockavailability,could
be significantly improved in some sectors such as DIY,
home improvement and office supplies.
Printer prices continue to decrease, while ease of
use and material range increase. This means successful
consumer use of 3D printers requires an ecosystem –
software, materials and printer – that is more complex
than associated with 2D printing on paper.
Gartner predicts that by 2015, seven of the 50 largest
multinationalretailerswillsell3Dprintersthroughtheir
physical and online stores.
John Davison
Gartner
3D printers can make a three-dimensional object of almost any shape using
a digital model. As prices come down, a growing number of retailers have
experimented with the technology in 2013
l 3D printing technology was
developed in the 1980s. But with
more retailers taking an interest
the price is coming down, which
has created further buzz about
its potential.
l While some UK retailers including
Maplin and Selfridges sell the
printers, others are making it part of
the shopping experience. In October,
Asda launched a 3D printing service
to customers – for £40 shoppers
could print everything from
miniature figurines of themselves
to pets or cars, available to pick up
the following week. The grocer wants
to be the first retailer to offer a 3D
printing service nationwide.
l Selfridges has opened a 3D printing
pop-up shop in its Oxford Street store
this Christmas. It enables shoppers
to use a full-body scanner to print a
miniature figurine of themselves.
l Tesco is exploring how 3D
printers could change the way
its stores work, such as offering
gifts and personalised items,
shopper-designed goods and
producing spare or broken parts.
l Jewellers in the US have started to
use the technology to personalise
items, while the US fashion sector is
using 3D scanners to tailor perfect-
fitting clothes. Nike and Adidas
are also among those printing soles
in 3D, which they say can reduce
production times from six weeks
to 48 hours.
l 3D printers will increase the
availability of stock on shelves,
and could mean some products
are produced on demand.
3d printing
The verdict
Shelf planning has two phases – design and execution.
In the design phase, myriad data is used to construct the
design. Some of this is aesthetic, some is sales and some
is incentive based, but the net result is a design that can
be executed by every store.
The value here is that once rendered, a person can
virtually rotate a shelf, a gondola, a rack of clothes
and even an entire store to see and feel what it will
actually look like from a 360° view. Rather than
settingaphysicalshelfandthenbuildingtheplanogram,
you can just build the virtual shelf. This also greatly
reduces errors not normally found until the shelf is
set, such as product overlaps, insufficient shelf stock or
overstock. But, most importantly, is that the aesthetic
of the shelf is enhanced along with saving set-up time
at execution.
3D shelf planning tools start at the individual
item level. They take a simple product image along
with the metadata (such as shape and dimensions) to
automatically create a realistic view of each item. Many
already have a healthy product repository that can be
used to create a shelf layout. These layouts are created
in 3D, similar to stacking items on an actual shelf, which
provides a more realistic and accurate view of the shelf.
These tools can then be provided to store set-up staff to
ensure a compliant shelf set.
The good news is that 3D shelf planning tools don’t
stop there. One solution, Dassault Systémes 3DVia,
enables a retailer to assemble multiple shelves into a
gondola,andthenmultiplegondolasintoanactualstore,
allowing a 3D view at each step of the way.
One can perform a virtual walk through of the
completed store to get a real-time feel for the new layout,
which is valuable for focus groups. Options to overlay
sales,profitmargin,turnsandinventorydatarightatthe
shelf allows a visual view of projected shelf performance.
Marty Ramos
Microsoft
lProduct shelving quality is a critical
factor tied to consumers’ shopping
experience. This technology uses
3D modelling and visualisation to
provide realistic views of retail aisles
including shelves, fixtures, products,
lighting and promotional materials.
This allows the design process to
take place significantly faster, with
greater flexibility and at lower cost.
By modelling virtual shelves and
stocking them with realistic 3D
product representations built from
2D pictures, brands and retailers
can efficiently design shelf layouts,
experience them with the eyes of
consumers, and augment shelves with
real-time business indicators
to make informed decisions.
l This means no physical product
specimens. Using this technology,
the merchandising process
from production to shop shelf is
significantly shortened.
l Last year 3D design software
company Dassault Systèmes launched
Perfect Shelf. In February the
company introduced Perfect Package,
which the likes of Nestle have used to
redesign packaging formats.
l Tesco uses technology from virtual
reality company Red Dot Square,
which connects with industry
standard, shelf planning software
to create a 3D environment with
‘photo realistic’ products on shelf
with an aisle or a full store. Users
can easily assess the effectiveness
of their arrangements by visually
incorporating key information,
including commercial data and
shopper and customer insights to
allow for instant and collaborative
decision-making.
l JDA 3D enables individuals to move
around virtual environments in the
first person, similar to a computer
game. Eye-tracking technology,
accurate to a quarter of an inch and
one fiftieth of a second, can then
follow shoppers’ movements as they
wander the store and select goods.
As a result, retailers can better
understand how changes in the
layout of stores, from shape and size
to branding and product location,
can affect shopper behaviour. It also
makes introducing new product
lines and promotions a less risky
proposition.
3D shelf planning
Software allows retailers and manufacturers to build virtual displays for stores,
making the design process faster, more flexible and cheaper for retailers

28
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