The_CEO_Magazine_ANZ_-_December_2016

INVESTIGATIVE FEATURE

However, the development of the
technology infrastructure to ensure
convenience comes at a cost. In the
half-year to 30 July 2016, the company
reported sales of £5.3 billion, up 3.1 per
cent on the previous year. Yet, despite the
growth in gross sales, John Lewis
reported a 14.7-per-cent decline in
profits. This is largely due to the amount
the company is investing in technological
research and development.

Upholding the adage ‘you have to

spend money to make money’, John

Lewis’ annual IT budget is £105

million for capital expenditure

(CapEx), and £80 million for revenue

expenditure (RevEx). Currently this

money is going towards implementing

technologies and developing new

innovations based on data analytics,

wearables, IoT, automation, 3D

printing, virtual and augmented

reality, smart home, location

technologies and visual apps.

Interestingly, 65.5 per cent of John

Lewis’ merchandise sales are still made

in branches, and three-quarters of its

customers buy in store. This

corroborates the notion that retail in

today’s context is not simply about

online, rather it’s about the customer

experience and convenience.

LET’S GET PHYSICAL

In its report ‘Technology in Retail:

From centre stage to supporting

player’, Deloitte highlights the

importance of bricks and mortar

stores, saying: “Purchases in-store

still account for over 90 per cent

of all retail transactions.” The reason

for this overwhelming statistic is

that, despite technology’s many

advantages, it can’t yet simulate

the same sensory experiences we

undergo when shopping: the aroma

of freshly baked bread, or the feel

of a crisp linen shirt between your

thumb and forefinger.

“There are two macro reasons why

people shop,” says Jack. “One is that it’s

a functional requirement, for instance,

buying a battery for your phone. The

other is the experience — from the

social engagement, to the tactile

nature of trying on an item of clothing

or holding something tangible in your

hands — and physical stores can really

amplify that.”

Flying in the face of the now defunct

prediction that e-commerce would

bring about the demise of bricks and

mortar retail, many formerly

exclusively online players are opening

up physical stores. Amazon, the

American-based e-commerce giant,

opened its first physical bookstore in

Seattle, US in late 2015 and is looking

to expand its physical presence.

“Retailers around the globe are starting to understand that technology

is a tool, it’s not a silver bullet.” - Jack Hanrahan, Non-Executive Director at Sprooki

3 TECH INNOVATIONS REVOLUTIONISING RETAIL

According to research conducted by enterprise mobility management

provider SOTI, US$20 billion worth of ‘things’ will be connected by

2020. In addition to established technologies like smartphones, tablets
      and computers, SOTI predicts retailers will be spending their budgets
      on developing:


2021. Bluetooth beacons
      Low cost transmitters,
      beacons are equipped with
      BLE (Bluetooth Low Energy)
      that is used to trigger a
      proximity and context-
      dependent message to a
      range of 70 metres. With the
      capacity to notify shoppers
      of customised offers and
      discounts in real time, beacons
      are advantageous to marketers
      and shoppers alike. Shoppers
      worried about being hassled
      should take comfort in the
      fact that they are required to
      ‘opt-in’ for Bluetooth beacons
      to work.


2022. RFID (Radio Frequency Iden-
      tification) technology
      RFID uses radio waves to track
      objects using specific product
      tags. While it has been used

to track inventory across the

supply chain for some time,

RFID is increasingly being

used at kiosks, enabling

shoppers to identify products

and check inventory in store.

In conjunction with smart

shelves, RFID can additionally

help to prevent theft.

3. mPOS (Mobile Point of Sale)
   Wireless devices that enable
   in-place financial transactions,
   mPOS is taking the place
   of cash registers and POS
   machines that ordinarily take
   up a store’s valuable real estate.
   These devices are preferred
   by retailers as they are cheap,
   mobile, and can interface with
   popular smart wallet solutions
   such as PayPal and Apple
   Pay. They also streamline the
   customer experience.