Retailers must anticipate the future when they buy technology today

The digital revolution has heavily penetrated retailing, because today’s customer is a tech-centric consumer who window shops online, pays with credit cards that never touch the cashier’s hands and/or communicates remotely with the seller—sometimes without speaking one word.

“What’s happening right now are wireless and contact-less payments—alternate payments,” declares Dan Hopping, a retail futurist and the chief executive officer of Next Retail Group, in Raleigh, North Carolina. “Wireless capabilities are here to stay.” Bluetooth® technology is big, too, says Hopping. “It’s how retailers will talk to the customer, because the customer is going to have a device that can talk to other devices.”

According to Forrester Research, consumers scoped out $400 billion worth of retail purchases online in 2007. Hopping notes that 97% of Web users are shopping online. “That doesn’t mean buying it online and having it sent to their house,” he adds. “It means deciding what to buy and who to buy it from online. That means that nearly all purchases in the store, the consumer has worked on them online.”

Cyberspace is one of several ways the consumer shops now. Business and retail technology consultant Alex Richardson identifies this “multi-channel shopper” as the main driver behind technology’s high retailing profile. “Today’s consumers want to be a bit agnostic about how they shop,” he says. “So the role of multi-channel marketing is quite high, since people really may want to buy in the store, online, on the cell, or by telephone or by the catalog.”

Because consumers are so comfortable with the Web, and with browsers, interactive kiosks are becoming phenomenally popular. “They’re really just intuitive Web devices, so the customer’s having no problem with it,” says Hopping. That’s one reason iPods are popular, too, with shoppers. “It’s not fancy technology, it’s not even a third-generation device and it’s slow as pond water,” scoffs Hopping. “But it has an intuitive user interface and that’s everything.”

The store window is starting to become a touch screen, too, courtesy of Richardson, who re-invented it to include more than just mannequins: he added an interactive device to it. “Not only can you see the mannequin now but also a thousand more items that may be available in the store, without walking in,” he explains. “So it’s really virtual window shopping.”

Hopping is clear about what retailers have to do to thrive in the ever-changing Brave New World of technology.

“You have to ask three questions of your business: what business do you want to be in in five and 10 years? what customers do you want to have in five and 10 years?—and that might be the same ones as now or a whole different set—and then how do you touch the customers in five and 10 years?”

That’s the dilemma for retailers; it’s how technology is redefining retail business priorities. Chain operations with a lot of locations can’t afford to guess wrong about the technology they’ll need, because it can take up to five years for an IT infrastructure to become operational. If retailers make that commitment based on current conditions, instead of the future, the installation will be obsolete by the time it’s finished.

Richardson counsels going conservative once retailers chose a system. “Take what you’re technically capable of and back off 40%,” he suggests. “The odds are you’ll never be able to get it done on time or on budget and you’ll never be able to deliver all the features [of the system].”