Top Tech for 2016

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The technology path leading into 2016 has never been more obvious. EMV deadlines, mobile, loyalty and everything swirling around those core goals have topped the industry’s to-do lists of late, as evident at recent user conferences, tech forums and last fall’s NACS Show.

What is less obvious—yet crucial as retailers begin choosing and executing new projects—are some of the essential purposes behind apps, beacons and other tools, as well as the potential to overlook key steps toward success. Such insights and hurdles came about in preparing this look forward to the top c-store technology trends for 2016.

Because January also marks the one-year anniversary for CSP Tech, a look back at last year’s projections seemed a perfect way to start 2016. (See 2015’s priorities below.) Though the themes remained the same, the rankings changed—mostly due to logistics. Retailers simply had to complete one before taking on the other.

For example, “It’s hard to do mobile payment right without a mobile strategy,” says Scott Hartman, president and CEO of Rutter’s Farm Stores, York, Pa., who also helped formulate last year’s list.

Similarly, Hartman says, “Market-basket analytics are a lot less valuable if you don’t have a rewards program to know your customer."

Above all else for 2016, Hartman predicts the industry will focus on data security, which he says is “of the utmost importance.” He calls Europay MasterCard Visa or EMV “just one of the possible security solutions—a very expensive and complicated one—but far from all of it.” As you prioritize your tech strategy for the coming year, consider the following six areas, ranked by importance by CSP Tech.

Data Security and EMV

With liability-shift deadlines for instore point-of-sale (POS) already past as of October, retailers face the looming October 2017 deadline for in-pump POS, something that will contribute to an initial $3.9 billion price tag for EMV [CSP—Nov. ’15, p. 99]. With that in mind, retailers are evaluating locations based on dispenser age, traffic count and fraud risk to prioritize them for upgrades. Within those plans is the need to put more effort into data-security tools and processes. PCI (Payment Card Industry) standards have become more complex, along with the larger threat of more sophisticated hackers and skimmers. Even mobile solutions require a review of data vulnerabilities, because card data and personal information about customers and employees are at risk.

Mobile Strategy

One of the most pervasive and challenging technologies to master, mobile will continue to both taunt and tempt retailers in 2016. Having the potential to lock in customers and influence sales, the technology needs thought and attention as it crosses departments, trading partners and even the line between what is and what could be. Marty Whitmore, vice president of Boston Retail Partners, Boston, says c-store apps can tie customers to loyalty programs, promote deals and deliver those messages when people physically are at the moment of decision or influence. Tied to that are location-based technologies, the proper supply-chain infrastructure and data-sensing and -transmission devices such as beacons. For the consumer, the experience must be fluid, whether on a phone, online or in the store. Internally, raw data must be turned into actionable information and ultimately lead to having the right product in the right amount on store shelves at the proper time.

Mobile Payment

The trend toward mobile payment has moved sluggishly, as numerous national efforts have met with obstacles from device activation to consumer indifference. But payment is an integral part of the mobile solution because it ties into promotional discounts, loyalty rewards and digital coupons.

Rewards Programs

The buzz about mobile may ultimately trigger a loyalty-program renaissance. While complexity has always deterred retailers in the past, the mobile discussion naturally segues into loyalty and customer identification. In a recent study, Boston Retail found that in the next five years, 59% of surveyed retailers will have some sort of customer-recognition program in place, allowing the retailer to communicate the most relevant information to each guest. In the c-store, “meaningful rewards on products and services that matter most to customers are increasingly influencing where they purchase gasoline, how much they spend and frequency of visits,” Whitmore says.

Market-Basket Analytics

Once obtained, raw data must be translated into actual insights capable of inspiring action. Analytics can help formulate a response to everything from fuel pricing to inventory processes, promotional strategies and the question of home delivery—thereby making what Boston Retail calls “real-time retailing” a reality. “The ability to deliver a seamless personalized experience to the shopper whenever, wherever and however they choose to shop … will be a requirement for the future,” reads a recent Boston Retail report. “It is like bringing the ‘Amazon experience’ to the store,” and that all begins with analytics.

Disaster Recovery and Business Continuity

With the sheer amount of data moving through a store having increased exponentially, the connections and cables that tie devices, processors and databanks together are becoming instrumental foundations. Like the nation’s electronic grid, no one worries about it until it fails. Smart retailers hope to reverse that mentality by reviewing and implementing strong fail-safe redundancies.

Or Do Nothing

This has come up as an option a number of times in recent forums. With retailers experiencing healthy fuel margins in recent months, “do nothing” is a perfectly fine option. The concern arises when looking ahead to what many call a “new normalcy.” Will a retailer be appropriately prepared to do business when that time comes?

“Do nothing” is even a strategy for EMV as retailers weigh the cost of fraud against the expense of equipment upgrades.  Unfortunately, historic numbers may be misleading; fraud percentages will probably increase significantly as the competition moves to EMV.

As for new technology projects, including mobile, they become relevant only as retailers start to imagine the viability of their businesses in years to come. How might fuel prices, the economy or other business threats and opportunities shape 2017’s tech strategies?

Top Commerce Priorities of Retailers Across All Channels

Mobile Capabilities of Retailers Across All Channels

Note: Respondents could pick more than one answer. Source: Boston Retail Partners

Retailers’ Ability to Identify Customer via Smartphone

Source: Boston Retail Partners

Last Year’s Top Tech List in Order of Priority

1. Mobile payment
2. Mobile strategy
3. Data security
4. Market-basket analysis
5. Disaster recovery and business continuity
6. Rewards programs

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