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Tomorrow’s technology draws retailers to NRF in search of the next ‘killer app’

2/11/2008

NEW YORK —Technology has transformed virtually every aspect of American life during the past decade, and the retail industry is no exception.

How consumers pay for merchandise and the tools retailers use to determine product assortments and manage inventories are very different from just 10 years ago, when the concept of multichannel retail made possible by the Internet was emerging.

While much has changed, another wave of innovation is in store during the next several years as recent economic weaknesses has heightened interest in all manner of technology products and services that promise to improve efficiency and productivity. This phenomenon was evident last month at the National Retail Federation’s annual convention, where there is a heavy emphasis on all facets of retail technology.

The event drew 19,000 attendees and 600 exhibitors, including some of the biggest names in the industry such as IBM, Cisco, Microsoft, NCR, Motorola, Oracle and SAP. The record attendance came on the heels of one of the weakest holiday seasons in recent memory coupled with a gloomy economic outlook for 2008 that has retailers paring expansion plans and reducing sales and profit estimates.

This inverse relationship between the overall performance of the industry and interest in retail technology illustrates that there is nothing like a slowdown in sales to expose the operational shortcomings of retailers, whether they are industry leaders or operators who struggled when economic growth was more robust. With sales and profits harder to come by, there is increased interest in products and services that promise to improve store associate productivity, enhance the in-store experience for customers and improve supply chain efficiency.

For example, Motorola introduced a small handheld product called the CA50 that is a communications device with a built-in scanner.There is no keypad and the small screen means costs were removed from the product so retailers can provide them to more associates who are able to communicate with one another and check prices and in-stock levels for customers.

The productivity and efficiency extends to other areas where SAF was touting a computer generated ordering tool that automates the process of producing merchandise orders so they become more accurate and stores benefit from improved in-stock levels, reduced inventories and higher sales.

Automation, long a part of the distribution center environment, is advancing to improve efficiency and order accuracy. Kiva Systems manufactures robots for use in a warehouse environment that actually lift and bring merchandise to order pullers, improving their speed and accuracy and increasing the productivity of existing facilities so retailers can delay or possibly avoid the addition of new distribution capacity.

Other systems offer retailers the potential to know exactly how many customers are in their stores by department and time of day. The Footfall division of Experience was at NRF making the case for accurately counting customers to produce valuable data that influences operational decisions, such as labor scheduling.

Most customers that shop in retail stores have never heard of companies such as Footfall, SAF or Kiva, but these companies and other leaders in the technology field are poised to reshape the retail industry and the shopping experience in dramatic ways in the future.

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