According to the data of the US Department of Commerce, the total retail sales in 2018 exceeded US $6 trillion, an increase of 5% over 2017 and 50% over the historical low of US $4.1 trillion in 2009. In general, the retail industry is experiencing two fully documented trends - one related to the impact of technology and e-commerce, and the other related to changes in consumer buying habits and preferences. Retailers who fail to accept these changes will suffer losses and may find their names included in an increasing number of retail bankruptcies. On the contrary, those who accept these trends will help redefine retail for the next generation.
One of the biggest misconceptions in today's retail industry is the proportion of retail expenditure to total expenditure. Although the retail sales through e-commerce channels are currently the fastest growing retail channel in the United States, by the end of 2018, e-commerce sales still accounted for less than 10% of the total retail revenue (according to the data of the Ministry of Commerce, e-commerce sales in 2018 was 514 billion dollars, accounting for 9.8% of the total retail expenditure). Physical retail stores are closely related to shoppers. Retailers can contact customers directly. If properly used, they are strategic assets.
As retailers learn how to best synchronize their physical and digital assets, and solve problems such as channel balance and profit margin optimization through fulfillment channels, a key gain of VDC's research on the retail industry is that retailers need to modernize their infrastructure to better adapt to changes in the retail industry. We have witnessed that these "in store" investments have solved all problems, from in store employee customer participation, expanding procurement fulfillment options to updating point of sale (POS) infrastructure. In fact, according to a recent survey of retail technology decision-makers, "optimizing stores" is considered to be the most important obstacle faced by retailers in the next 12-24 months.
Scan at point of sale
2018 was a year of strong retail technology spending, as retailers used more capital to solve many of their modernization plans. At the point of sale - one of the key points of today's shoppers' "friction" - updating the POS infrastructure is a common theme, including the adoption of more modern scanning solutions. From the perspective of scanning technology, this means moving from traditional laser scanners to camera based imagers, spanning all form factors, including display scanners, to more complex biometric scanners for high-volume trading environments such as grocery stores. Key factors driving this shift include:
-Camera based 2D scanners can extract codes from mobile phones and store cards, enabling retailers to combine online and loyalty activities, as well as coupons, with in store shopping. For grocery stores, this improves accuracy, reduces POS losses, and improves overall shopper satisfaction.
-The 2D scanner based on camera can capture more than ordinary code. They read watermark labels, such as Digimarc, bank check images and driver's licenses, to facilitate the growing customer demand, while reducing the bottleneck based on exceptions at checkout.
Although some first tier retailers are using the second or third generation camera based scanners at POS, this transformation is still in an early stage considering the overall retail prospects. Today, VDC estimates that laser or linear imaging technology represents two-thirds of POS scanners. By 2022, we expect that more than 50% of POS scanners will be migrated to solutions that support 2D, which means that the wave of upgrading will continue.
