Tech Overload

In my last column, I offered a candid look at the technology landscape of 2013, identified the key trends retailers need to pay attention to and promised to provide a similarly frank look at what retailers can safely ignore this year.

Surprisingly, this list was a bit harder to put together. There were some obvious sources of overhype, but in other cases the hype was almost too persuasive. Still, if you peel away the rhetoric, you’ll see that what’s being pushed on retailers is really an aged pig with several new layers of lipstick on it.

1. Tap and pay

Despite the hype, contactless payment has been around in retail for some time. Mobil debuted Speed Pass in 1994, and Stop & Shop and McDonald’s hopped on the bandwagon briefly in 2004 before abandoning their pilots. More recently, mobile phone manufacturers and Google have been lauding contactless payment via phone as the next great thing for shoppers.

The problem is the benefits for shoppers just aren’t there. Let’s put this in perspective: Google touted hitting the milestone of 150,000 users for its Google Wallet tap and pay solution. That’s less than one-tenth of one percent of shoppers in the U.S. Hardly massive adoption.

WHAT NOT TO DO: Don’t focus on payment – for now. If contactless payment takes off in the U.S., there will be ample warning for retailers, but right now, it does little except add to p-o-s replacement hardware costs. A few retailers will be able to take advantage of “tap and ID” capabilities, where shoppers who do use near field communication can unlock a personalized experience throughout the shopping process, but this is likely not a 2013 project for most retailers.

2. There’s an app for that

The proliferation of mobile apps continues in 2013 as retailers scramble for more and more slots on shoppers’ home screens. Of course, this has been aided and abetted by the tech industry, which is actively telling retailers that apps are the way to go. Recently, I’ve been deluged with ads for services that convert a company’s Facebook page into an app, to which I have one simple question:

Why?

The type of information shoppers would want from a retailer’s app (e.g. store locations, product information, stock availability, shopping tools) is very different from that which they would want from a retailer’s Facebook page (e.g. upcoming events, social engagement, promotions, interactive elements).

WHAT NOT TO DO: Don’t fragment your apps. A quick search for “Sears” on Apple’s app store yields 11 apps that all appear to be authentic apps from Sears. Which do I need to download to my phone: Sears2go, Shop Your Way, Sears Marketplace, Sears Outlet? (It’s even worse on Google’s Play app store, where looser publishing restrictions mean many unofficial apps have the same icons as the official Sears apps).

Simply put, more apps don’t necessarily mean a better mobile strategy. Focus on quality over quantity, and make sure the mobile features you deploy are focused on helping your shoppers shop with their phones, something far too few retailers do.

3. Digital video walls

If 2013 marked the “return of retail math,” retailers lusting after those beautiful HD video walls gracing flagship stores along Times Square and in Tokyo’s Ginza district will face the “revenge of retail math” as sharp-eyed cfos question the value of huge investments in shiny screens.

The biggest problem with these massive installations is that the evolution of the technology has not lined up with the economy of scale necessary for profitable deployment. HD screens have gotten cheaper, but not at the same pace that has marked price-to-performance improvement in other areas. Two years ago, a tablet for $1000 and a full-blown computer for $250 would’ve seemed like bargains. Today, both can be purchased for a fraction of those prices. This simply hasn’t happened with large digital screens, nor is it likely to in the near future.

WHAT NOT TO DO: Don’t focus on screens. While a 40-foot-tall digital wall looks great on Times Square, it will always be wildly out of place in Dubuque, Iowa. Whether static or interactive, multi-screen video walls need to be few and far between.

Instead, focus on integrating more reasonably sized screens into the design of stores. A few strategically placed (and visually integrated) screens can make 90 percent of the impact of a larger video wall at 10 percent of the price.

4. The cloud

Every couple of years, there’s a buzzword that is embraced by the technology industry (especially its consultants) and bandied about as a panacea for retailers, but only if fully embraced and radically deployed by expert consultants, of course.

The cloud is one of these panaceas. Now, many of my tech brethren would argue with me that it is an essential part of any modern IT strategy and, in and of itself, I don’t disagree. But embracing solutions simply because they are cloud based is just plain dumb. For some problems that have plagued the industry for decades, the cloud is a brilliant solution. For others, it’s a pointless diversion away from the heart of those same issues.

WHAT NOT TO DO: Don’t embrace the cloud for its own sake. If you, as a non-IT retail executive can see a clear benefit to using cloud-based technology, consider it. If you can’t, remember that the whole economics of the technology industry is built on having some hot new thing every few years that generates a ton of pilots with questionable ROI and huge consulting and implementation fees. If you wait until the benefits of infrastructure shift are clear to you, you’ll gain the real ROI without spending two- to three-times the software and hardware cost on consulting.

5. Big data

I spoke at a conference last year where technology and business leaders gathered to discuss how their respective industries could use big data. Let me summarize the results this way: If your company doesn’t know what to do with big data, there isn’t anything useful you can do with big data.

Big data, though positioned as a solution or set of analytics capabilities, is actually more of an attitude. Does your retail enterprise already embrace the idea of analytics-driven decision making? Do you already use every shred of data you can glean about your shoppers and your supply chain? Are you already using real-time analytics to optimize processes throughout the enterprise? No, didn’t think so.

WHAT NOT TO DO: Don’t spend more time focused on analytics than execution. Knowing something via big data analytics is worthless without having the real-world ability to act on it. Big data can give detailed insights on shopping behavior, but knowing that red-haired shoppers spend twice as much money as blondes on Tuesdays is meaningless without the ability to do something with that information. Almost every retailer is more challenged by execution than analysis, so take advantage of existing insights rather than generating new ones.