In the U.S., at least half of the 10 largest companies could now be considered technology firms.
On that list, only Apple was founded with a pure focus on technology. But firms like Walmart, CVS, Ford, and GM are now considered tech companies as their business models evolve. Increasingly, they rely on (and create) technology as a core part of their business — and they operate within an ecosystem of connected technologies that allow them to create value for their customers.
Such dynamic, multi-company systems are increasingly a staple of the modern economy. They offer new ways to manage tradeoffs between commitment and flexibility. In short, many executives and managers are realizing the need to shift their perspective towards an ecosystem approach to stay competitive. APIs, digital platforms and IoT technology are ushering in a new era of connected business with massive upside for brands that embrace the opportunity to grow within these ecosystems.
What does that kind of growth look like?
For retailers, it means acquiring and coordinating new, diverse and unique capabilities while responding to changing technology and consumer demands. In the merchant technology sector specifically, retailers are racing to keep up the pace and stay competitive.
Let’s take a look at a few recent trends in merchant technology and discuss how retailers and their partners can respond to this evolving ecosystem landscape.
The Key Merchant Technology Trends In 2019
Consumers are in the driver’s seat, but merchants have their hands on the clutch.
In other words, the speed of transformation in merchant technology depends on how quickly and how effectively retailers respond to changing consumer behavior and demands. One thing is certain: Businesses that integrate consumer demands while keeping an eye on their bottom line will reshape the industry in the coming years.
Changing how your business operates and leading in the industry assumes that you know what trends are shaking up the field. Here are a few of the trends driving changes in merchant technology in 2019:
Voice Technology Gets Louder
Consumers will continue to ramp up their use of voice search to find and purchase products. Whether it’s Amazon Alexa, Google Home, Apple’s Home Pod or another device, voice technology is on the rise. One study showed that 57% of smart speaker users have purchased something with voice tech. And don’t forget about voice technology on mobile devices, with applications like Apple’s Siri serving as personal assistants, helping people with their research and purchases.
Savvy retailers will make their customer buying journeys fully “voice-enabled” (or at least voice-adjacent) so that customers can continue to make voice technology part of their purchasing process.
Mobile Continues To Grow
By 2020, half of all shopping will be done on mobile devices. Let that sink in for a moment. Even if we’re talking about shopping in-person, over 30% of shoppers changed their minds upon checking mobile. The big point here is that the influence of mobile will continue to expand, and businesses should be ready to convert customers increasingly going to their mobile devices to make purchases.
With roughly one in every four dollars going towards retail e-Commerce in the U.S. coming from customers using mobile devices, getting friendly and familiar with integrating mobile merchant technology into your business model is a near necessity.
The Internet Of Things Becomes More Of A Thing
Whether it’s video and facial recognition technology, GPS-enabled shopping carts, or electronic labels and price tags — the Internet of Things (IoT) will continue to permeate merchant technology. With approximately 85% of retailers expected to adopt IoT (in some way) by the end of 2019, it may be time to jump on that bandwagon.
Businesses that embrace IoT can build shopper profiles that allow them to deliver a more personalized experience within the store for consumers. With GPS-enabled shopping carts, customers can upload shopping lists and be guided towards the right items as they look around, and even pay for items through the cart itself, cutting out long checkout lines. With electronic tags, retailers can update product information on a number of products seamlessly through the Internet in an instant.
IoT comes with many advantages for companies while also significantly enhancing the customer’s retail experience. Smart merchants, take note.
Other Relevant Merchant Tech Trends To Watch
Retailers and their support providers can’t possibly stay on top of every single trend in merchant technology. That’s why it’s important to concentrate in areas that make the most sense for your business, while also bringing significant rewards for customers and in terms of revenue gained.
The trends mentioned above (voice, mobile, IoT) are clear front-runners when it comes to these criteria for most retailers. At the same time, businesses would be wise to keep their eyes on a number of other trends that are seeing early traction in the market as they look forward and plan the future for their businesses.
With global e-Commerce revenues expected to top $4.88 trillion by 2021, the opportunities to embrace these trends and win market share are quite tempting for most merchants:
- Artificial intelligence (AI)
- Artificial Reality (AR)
- Virtual Reality (VR)
- Expanded payment methods
- Digital currencies
- Customer experience optimization
- Buy Online, Pickup In-Store (BOPIS)
- Automated checkout/cashierless
Each of these micro-trends can and should be connected to the larger trends mentioned above. In other words, find ways, with partners, to build ecosystems that will seamlessly and intelligently support the integration of new technologies as you grow your business.
It’s not easy but it can and must be done for your business to thrive in the modern ecosystem economy.
So What Does These Shifts Mean For Your Business?
So what are retailers (and the companies that support their work) meant to do in light of these dramatic shifts?
In short, adapt or perish.
You’ve got to give the people what they want at the end of the day. Here’s what is clear in the recent research on merchant technology. In the evolving ecosystem economy, customers broadly want:
- More payment methods
- Access to digital currencies
- Improved customer experience
- Greater personalization (e.g. beacons/mobile POS)
- “Build your own” products
Armed with this knowledge, the question then becomes: How will retailers and their partners build the architecture for an ecosystem approach using advances in merchant technology?
As both the technology and consumer demands grow more complex and interwoven, retailers will need all the support they can get to effectively respond and stay ahead of the curve. That’s clear.
The Big Picture For The New Merchant Technology Ecosystem
A major feature of the emerging ecosystem economy is greater openness. Previously closed environments are being disrupted, and businesses are being asked to become more accessible, flexible, and transparent in order to meet consumer expectations. In order to do this, companies are embracing new technologies and more open business practices.
As agility becomes a growing factor for business success, openness becomes even more important to understand and execute on what’s needed to increase business agility. Especially when it comes to partnerships, businesses have to stay agile and open to new forms of collaboration in highly dynamic markets.
The shift from a supply-focused model to digital ecosystems isn’t an easy one for most retailers. As customers continue to demand more seamless retail experiences, merchant technology will need to follow suit.
In more agile and open business ecosystems, trust will be vital for merchants as they seek to stay ahead of customer expectations and keep their businesses strong.
Chip Kahn is the founder and CEO of Boomtown. Prior to Boomtown, he founded BroadHop, which was acquired by Cisco and IP Commerce, while as CEO he grew it from an idea to $8B in annual payment volume while directly helping companies like Square and Intuit launch their payment solutions. He is a ’40 under 40’ winner as well as the recipient of Michael P. Duffy Leadership award, an accolade honoring the entrepreneurial spirit of the late Chase executive Mike Duffy.