3 Technologies Leveling the Playing Field for Small Retailers

Until now, larger, resource-rich retailers have had the upper hand over their smaller counterparts due to the millions of dollars they invest in people and the latest technologies to improve the shopping experience for consumers. After decades of limited access to critical tools and techniques, several new classes of technology have emerged, offering smaller retailers an opportunity to level the playing field against the Amazon.com's of the world.

In-Store Digitization
Many retailers are moving toward what's commonly referred to as "in-store digitization," offering customers a faster and more efficient way to check out via mobile point-of-sale (POS) systems, as well as what Forrester calls an "endless aisle," where customers shop in-store then purchase online where the selection of products isn't as limited.

While businesses large and small realize the need to update their payment systems, small businesses have an advantage over larger retailers when it comes to what Gartner calls "Advanced Selling Systems" or in-store digitization. Larger retailers are deeply invested in their POS systems, but smaller retailers can now easily deploy mobile POS via tablets and smartphones with ZingCheckout, Intuit, Revel Systems, Square and other vendors. Square, for instance, is targeting small businesses with its latest product, Square: Business in a Box, which offers an easy and low-cost solution for mobile POS.

The "endless aisle" is also more easily implemented online by small retailers whose catalog sizes are smaller and faster to digitize and organize across channels. As a result, it's now possible for smaller retailers to deliver in-store digitization.

BYOD and ‘Customer Aware’ Technologies
Consumers have increasingly embraced the "bring your own device" (BYOD) trend, using their personal mobile devices while they browse and shop in-store. As such, retailers are scrambling to make it easy for consumers to shop and transact on their mobile devices while in-store as well as provide a more omnichannel experience. With the rise of the phablet — the device that marries smartphone mobility with tablet-sized screens that customers prefer for transacting — the trend of browsing in-store while purchasing online will only accelerate.

Retailers can also leverage BYOD to both personalize shopping experiences and make transactions seamless. Companies like Square and Cisco are developing affordable technologies that empower small retail stores to become "customer aware" — i.e., knowing when a device tied to a consumer is near or enters the store. Armed with this information, retailers can use personalized push notifications to bring consumers into their store. Once there, shoppers can use the technology for easier, faster payment processing, bypassing payment authentication methods like swiping a credit card or signing a receipt. A customer simply gives their name and via Wi-Fi connectivity the retailer seamlessly conducts the transaction.

Recommendation Engines
Personalization technologies like product recommendation engines aren't new. They've been around for more than two decades since Amazon first added product recommendations to its platform. Netflix followed suit, spending millions to build out its own recommendation engines. (The company famously spent $1 million on a recommendation algorithm that it ended up not using largely because it was taking too much engineering resources to maintain and update.) These expensive technologies were out of reach for smaller retailers who couldn't afford to build and maintain their own recommendation engines.

Now, third-party solutions exist for retailers of all sizes to personalize experiences for shoppers with product and content recommendations, a tactic proven to increase average order values (AOV) for retailers from Urban Decay to Hayneedle. These technologies have evolved dramatically from their first cumbersome deployments with large clients.

Personalization vendors now fully understand where to start the personalization process, how to optimize the process for each retailer and where to get the most return on investment upon first deployment. Best practices include personalizing recommendations on your homepage or category pages to engage new customers quickly, and providing accessory or complementary recommendations on the cart page to increase AOV. These recommendation solutions are now affordable to everyone, offering even boot-strapped retailers the ability to see conversion and revenue lift from a reasonable investment in technology. Furthermore, they gain insight into the best practices required to deliver unique and relevant shopping experiences to online consumers.

While large retailers with deep pockets have traditionally had the upper hand in talent and technology, smaller retailers now have access to many of the same resources, enabling them to catch up or even surpass their larger counterparts in terms of digital enablement.

Dan Darnell is the vice president of product marketing at Baynote, a provider of personalized customer experience solutions for cross-channel retailers.