MONTREAL, May 20, 2015 /PRNewswire/ -- Independent retailers are investing in big data and personalized marketing this year, but dragging their feet on updating point-of-sale (POS) systems to accept mobile-based and chip-and-PIN card payments, according to a survey of more than 1,500 independent retailers conducted by Lightspeed POS. Meanwhile, retailers selling both online and offline inventory report most of their revenue still comes from brick-and-mortar sales, but they are looking to eCommerce to boost visibility and revenue in the coming months.
To get an outlook on technology trends in the retail market, Lightspeed surveyed independent retailers about the technologies that made the biggest impact on their businesses over the past year and asked where they plan to invest in the coming year.
"Independent retailers are confident in their futures, and are ready and willing to invest in technology that will help them keep up with competition and increasingly tech-savvy customers," said Dax Dasilva, Founder and CEO of Lightspeed. "Our data shows they are placing special value on the tools that take the guesswork out of their business - in the back of the store, on the store floor and online - so that each decision they make from inventory to marketing is driving revenue."
The second annual Independent Retail Technology Adoption Report showed that a large majority of independent retailers are confident revenue will increase this year, and are ready to invest in technology. 42 percent said they would increase their budgets for in-store technology this year, and 61 percent said they would increase their online technology budgets.
Big Data: From Buzzword to Retailers' Secret Weapon
Big data's days as just a buzzword for big business are over. Smaller retailers have realized that data-backed insights into customers' buying patterns can help them provide suggestions and boost sales. Using the right data software can also help them make smarter buying decisions, reducing lost revenue on overstocks or under purchasing. Other highlights include:
- 54 percent of respondents credit data tools that help them buy smarter with having the biggest boost to revenue in 2014
- 26 percent plan to add data analytics by the end of 2016 in order to make better buying decisions
- 35 percent say they plan to use data analytics for personalized marketing by the end of 2015, with 18 percent predicting using data for personalization will be a top source of increased revenue
Despite Tech Advancements, Retailers Not Ready for EMV Deadline, New Payments
Despite retailers' demonstrated interest in investing in technology EMV, or "chip-and-PIN"-ready systems, implementation looks to be a significant hurdle as retailers approach the October 2015 deadline. The fast-approaching government regulations require retailers to update their POS systems to accept a new, more secure type of credit card-- or face paying fraud penalties out of pocket. According to our survey:
- As of April 2015, only 18 percent of retailers in the U.S. have already implemented EMV payment technology
- 45 percent are poised to miss the October 2015 deadline
Retailers that have not yet implemented EMV payment technology reveal a general lack of understanding and urgency:
- 25 percent do not understand the new rules
- 17 percent have never even heard of EMV or chip-and-PIN
- 18 percent do not want to deal with the hassle or cost of switching payments hardware
As regulations shift toward a new kind of credit card, payment technology that gets rid of cards all together (Apple Pay, Samsung Pay and Android Pay) is also taking hold of the industry. Forrester predicts mobile-based payments will grow from its current volume of $50 billion to $142 billion by 2019, yet our survey revealed U.S.-based independent retailers are slow to adopt mobile payments:
- Only 9 percent currently accept Apple Pay
- 40 percent have no plans to ever accept Apple Pay, citing lack of interest from customers
- By the end of 2016, 34 percent plan to accept Apple Pay, 25 percent plan to accept Android, and 23 percent plan to accept Samsung Pay
"Retailers seem to be waiting to upgrade their POS systems until they find one that can accept both EMV as well as mobile payments," said Dasilva. "If you look at the numbers, the amount of retailers that plan to accept Apple Pay by the end of 2016 is close to the number that expect to be EMV ready. Retailers with modest budgets demand technology that does double-duty: they're willing to delay upgrades in order to find the systems that can meet customer and regulatory demands at once, and at a price that fits their goals."
While In-store Rules, Retailers Look Online for Revenue Boost
As retailers put money toward data and technology, they're investing in what's already working: the in-store experience. For retailers with both an online presence and a physical store, the majority of their revenue comes from in-store purchases. Retailers are ready to go online in 2015, but still prioritizing in-store technology that makes customers' lives easier, like a mobile POS system that allows them to check customers out on the floor or look up inventory from the dressing room, or beacon technology that can alert nearby customers of in-store deals.
- 71 percent say 10 percent or less of their revenue comes from online channels
- 19 percent currently implement a mobile POS for checking out customers from anywhere in the store, and 22 percent use a mobile POS for inventory lookups on the store floor
- 34 percent are interested in implementing in-store beacons, up 62 percent compared to last year
While brick-and-mortar stores are making a significant impact on sales, retailers are doubling down on their "dot-coms":
- 39 percent predict more online sales will be the biggest revenue driver this year
- 27 percent expect online store revenue to increase by more than 20 percent by the end of next year
- 50 percent have an online store, up 23 percent from last year
About Lightspeed's Annual Independent Retail Technology Adoption Report
The survey of more than 1,500 independent retailers was conducted by Lightspeed via an online survey between April 6 and April 20, 2015.
Access the full report at our website here.
About Lightspeed POS
Lightspeed provides retailers and restaurateurs the simplest way to build, manage, and grow their business and create a better customer experience. More than 24,000 businesses processing over $9 billion in transactions annually use Lightspeed's mobile POS and commerce platform to manage inventory, customer preferences, sales, and analytics to get a complete view of their entire business in one place. Founded in 2005 with offices in Canada, USA, and Europe, Lightspeed is backed by Accel Partners and iNovia Capital. Visit us at www.lightspeedpos.com.
For more information, please contact:
Bateman Group for Lightspeed POS