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- 1. Greg Cohen Retail Management 301 Retail Innovation American Public University Said Ghezal Retail Innovations
- 2. Transportation Thanks to the discovery of new sea passageways in the 15th and 16th, it became easier for merchants to obtain a broader assortment of merchandise (Niemeier 2013) In the 18th and 19th centuries, trains allowed products to be shipped to businesses at an even faster rate (Niemeier 2013) As American Highways were built, trucks were used (Niemeier 2013). Retailers of all forms use transportation to get merchandise to their stores from discount stores, to specialty shops and department stores.
- 3. Self-Service Grocery Stores Piggly Wiggly opened the first self-Service store in 1916 (Niemeier 2013). More traditional supermarkets opened a few year later in Los Angeles, California, and Queens New York (Niemeier 2013) While still commonly shopped at today, hypermarkets like Wal-Mart and Target have taken away some of the grocery store’s business (RTMG 2010) New giant supermarkets like Wegmans offer an enhanced selection (Wegmans 2016).
- 4. Shopping Malls When Americans moved to the suburbs, the first fully enclosed shopping centers were built. The first one opened in 1956 (Belisle 2011) These centers offered consumers the convenience of finding everything that they needed in one location with lots of free parking. Typical retailers include department stores like Macy’s and JCPenney and specialty stores like The Gap and American Eagle Outfitters (Nadis 2011). With the ease and popularity of internet shopping, many malls have been on the decline. This has forced developers to come up with other uses for store spaces (Parmley 2017)
- 5. Point of Sale Systems and UPC’s These devices enable store employees to easily scan universal product codes and ring up customer purchases so they can pay for them (Niemeier 2013). Retailers can also keep a better record of their inventory and determine which items are selling well (Niemeier 2013). Before these machines were invented, it was much more time consuming for retailers (Cortada 2004). Today, all major retailers use point of sale systems including hypermarkets like Wal-Mart and Target and supermarkets like Wegmans (Cortada 2004).
- 6. Electronic Touch-screen Kiosks Allows consumers to find out more information about products and services offered by the retailer (Rowley & Slack 2003) Kiosks can be found in lots of places including shopping malls, hotels, restaurants, and drugstores. (Rowley & Slack 2003) Consumers can scan loyalty cards to find out about reward balances (Rowley & Slack 2003) Terminals are now being used allow consumers to place orders at restaurants like Wendy's, and McDonalds. Convenience chain Wawa uses kiosks to allow customers to place orders at their deli counters. This improves customer and employee accuracy (Rowley & Slack 2003).
- 7. Credit and Debit Cards Consumers can pay for merchandise without cash. Card is swiped into a electronic card reader using a magnetic strip on back of card (Radu 2002). Credit Card companies agree to loan consumers money with the agreement that they will pay it off at the end of the month. If the cardholder fails to do so, he is charged an interest fee. Debit Cards take money directly out of the card holder’s bank account (Radu 2002). Recent credit card breaches have forced credit cards to offer an enhanced layer of security with the installation of embedded chips. These chips make it hard for criminals to counterfeit the cards (Passman 2014). In 2012, there were over 175 million credit card account holders in the USA(Equifax 2012). Many retailers like Kohls, Target and T.J. Maxx offer their own credit cards. This encourages consumers to spend more money with the corresponding retailer.
- 8. Internet Shopping First launched in 1997, the internet has made it possible for consumers to shop on their computers or other electronic devices (Doherty et al., 2010). E-commerce stores are open twenty-four hours a day (Doherty et al., 2010). Small and large businesses can compete on an equal level since it is easy for consumers to find them and there is little overhead cost (Doherty et al., 2010). Popular online retailers include Amazon.com, Overstock.com, and Ebay. In 2015 consumers spent $399,465,810,914 on the internet (Online Shopping 2016)
- 9. Self Checkout Lanes First installed in 1998. Specially designed Point of Sale systems allow customers to scan and bag their own merchandise without the assistance of a cashier (Pantano and Timmermans 2011). Terminals are supervised by store employee Despite frequent frustrations, they are often used by consumers, especially when, traditional checkout lines are long (Pantano and Timmermans 2011). Over 2.5 billion people have used self checkout systems (Pantano and Timmermans 2011).
- 10. Social Media Provides an easy way for retailers to communicate with consumers by providing a forum to discuss what they like about the retailer(Voight 2007). Customers can provide retailer with both positive and negative feedback (RTMG 2010). Retailer can use social media sites like Facebook and Twitter to mention upcoming products and promotions (Voight 2007) Today, all major retailers have social media pages. Each page features posts that are tailed to the retailer’s target demographic. There are over 4.2 billion people who use mobile devices to access social media platforms (Fantima et al., 2015)
- 11. References Belisle, D. (2011). Retail Nation. Vancouver: UBC Press. Retrieved from http://ebookcentral.proquest.com.ezproxy2.apus.edu/lib/apus/detail.action?docID=3412676 Cortada, J. W. (2004). The Digital Hand : How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries. Oxford: Oxford University Press. Dennis, C., Fenech, T., & Merrilees, B. (2004). E-Retailing. London: Routledge. Doherty, N. F., & Ellis-Chadwick, F. (2010). Internet retailing: The past, the present and the future. International Journal of Retail & Distribution Management, 38(11), 943-965. doi:http://dx.doi.org.ezproxy1.apus.edu/10.1108/09590551011086000 Equifax, inc.; current retail credit card accounts stand at A 31-month high. (2012). Investment Weekly News, , 601. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/1037950464?accountid=8289 Fatima, S., Manzoor, U., Zafar, B., & Balubaid, M. A. (2015). Analyzing the impact of social media on users. International Journal of Computer Science Issues (IJCSI), 12(3), 141-145. Retrieved from https://search- proquest-com.ezproxy2.apus.edu/docview/1690467196?accountid=8289 Grewal, D., Ailawadi, K. L., Gauri, D., Hall, K., Kopalle, P., & Robertson, J. R. (2011). Innovations in retail pricing and promotions. Journal of Retailing, 87, S43-S52. doi:http://dx.doi.org.ezproxy2.apus.edu/10.1016/j.jretai.2011.04.008 Jones, L. (2014). Credit cards set for an overhaul. Arkansas Business, 31(4), 1. Retrieved from https://search- proquest-com.ezproxy2.apus.edu/docview/1508782107?accountid=8289 Jungsun (Sunny) Kim, Christodoulidou, N., & Yunjeong (Clara) Choo. (2013). Factors influencing customer acceptance of kiosks at quick service restaurants. Journal of Hospitality and Tourism Technology, 4(1), 40- 63. doi:http://dx.doi.org.ezproxy2.apus.edu/10.1108/17579881311302347 Kioskmarketplace.com: Wendy's, McDonald's kiosks won't kill jobs, report says (2016). . Chatham: Newstex. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/1798834986?accountid=8289 Lee, G., With contributions from, C. G., & Rebecca Kleinman, M. (2005). WHAT'S IN A NAME? Wwd, 189(8) Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/231166602?accountid=8289
- 12. References Nadis, F. (2011). Shopping malls. In A. J. Andrea, World history encyclopedia. Santa Barbara, CA: ABC-CLIO. Retrieved from http://ezproxy.apus.edu/login?url=http://search.credoreference.com/content/entry/abccliow/shopping_malls/0 ?institutionId=8703 Niemeier, S. Z. A. C. M. (2013). Reshaping Retail. Somerset: John Wiley & Sons, Incorporated. Retrieved from http://ebookcentral.proquest.com.ezproxy2.apus.edu/lib/apus/detail.action?docID=1211890 Online shopping (ecommerce), mail order, catalogs and other direct marketing industry (U.S.) analytics, extensive financial benchmarks, metrics and revenue forecasts to 2023, NAIC 454100 published october 11, 2016. (2016). (). Houston: Plunkett Research, Ltd. Retrieved from https://search-proquest- com.ezproxy2.apus.edu/docview/1838475416?accountid=8289 Parmley, S. (2017, Apr 11). Markets are moving back to the malls. Philadelphia Inquirer Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/1886483209?accountid=8289 Parkhi, S., D, J., & Kumar, R. A. (2014). A study on transport cost optimization in retail distribution. Journal of Supply Chain Management Systems, 3(4) Retrieved from https://search-proquest- com.ezproxy2.apus.edu/docview/1733230970?accountid=8289 Passman, A. (2014). The year of the breach. Credit Union Journal, 18(44), 1. Retrieved from https://search- proquest-com.ezproxy1.apus.edu/docview/1639055710?accountid=8289 Radu, C. (2002). Implementing Electronic Card Payment Systems. Norwood: Artech House. Retrieved from http://ebookcentral.proquest.com.ezproxy1.apus.edu/lib/apus/detail.action?docID=227605 Rowley, J., & Slack, F. (2003). Kiosks in retailing: The quiet revolution. International Journal of Retail & Distribution Management, 31(6), 329. Retrieved from https://search-proquest- com.ezproxy1.apus.edu/docview/210930078?accountid=8289 RTMG Retail Innovation Collection. (2010). New York, NY: McGraw-Hill Education. Rundle, M. (2015). Amazon's drones revealed in patent. New York: Condé Nast Publications, Inc. Retrieved from https://search-proquest-com.ezproxy1.apus.edu/docview/1703413098?accountid=8289 Tenser, J. (2003). At wawa, customer self service ordering: Is an everyday advantage. (case study). Progressive Grocer, 82(6), SS24. Timmermans, H. P., & Pantano, E. (2011). Advanced Technologies Management for Retailing : Frameworks and Cases. Hershey PA: IGI Global. Voight, J. (2007, Oct 08). Social marketing do's and don'ts. Adweek, 48, 14-15,30.
Editor's Notes
- Early explorers in the 15th and 16th centuries made it possible for merchants to acquire a vast assortment of merchandise from all around the world thanks to the discovery of new sea passageways and better ships (Niemeier 2013). Europeans for the first time were able to now enjoy products like Fabrics from India and tea from China. During the industrial revolution, there was an enormous increase in the products available and there was an improvement in road construction which made transporting items more efficient (Niemeier 2013). In the 18th and 19th centuries, the invention of the train made it possible for goods to be transported at a much greater distance and a much faster rate. Years later when the traditional retail sector began to take shape as we know it, companies began to obtain their goods from wholesalers rather than directly from factories. The national highway system an increase in trucking made this possible (Cortada 2004). J.W. Cortada states in his book The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries: "During the last several de-cades of the century, the physical distribution of wholesalers spread across the nation as the interstate highway system expanded, making it possible to distribute goods easily, inexpensively, and quickly across the country" (Cortada, 2004, p. 264) Today, many retailers either own their own trucks or lease them from outside companies in order to ship merchandise from the retailer's distribution centers to their stores (Parkhi & Kumar 2014). In an effort to further increase efficiency to the consumer, internet retailer Amazon.com is testing the idea of using air-powered drones which would deliver the customer's items directly to his door. Amazon will be able to use a different sized drone based on the size of the customer's order (Rundle 2015).
- One of the biggest retail innovations involves the way in which we buy groceries. Today, more people shop at the supermarket, than any other retailer (RTMG 2010). However, In the 1800's before the shopping cart was invented, people that needed to buy food would shop at an independent owned store that was fully-serviced (Niemeier 2013). The customer would explain what he needed and the employee would get the items for him. Meat and bakery items would usually be sold at a separate butcher and bakery. However, in 1916, in Memphis, Tennessee, the first self-service grocery store was born. As Stefan Niemeier states in his book Reshaping Retail: "Although Piggly Wiggly is credited with being the first self-service grocery store, it was not quite a supermarket--that implies greater scale and in turn, more customers, and customers buying more." (Niemeier, 2013, p 20) The first supermarkets as people know it today opened in Las Angeles and Queens New York in the late 1920's (Cortada 2004). Since selling fresh food can be a challenge, it became necessary, owners of market chains to ensure that food was being properly cared for in the supply chain. Company owned distribution centers helped to give supermarkets better control of their products. Today, one of the biggest threats to traditional supermarkets are hypermarkets (Niemeier 2013). These large-format retailers offer consumers a full selection of grocery, meat and produce items along with a full-sized general merchandise discount store (RTMG 2010). This concept makes grocery shopping easier for consumers by offering them everything that they need in one location. In an effort to make grocery shopping more exciting, retailers like Wegmans have created grocery superstores that are even larger than the normal supermarket and offer an even bigger variety of food products for the serious foodie (Wegmans 2016).
- For the longest time, a city's main street was the place to go shopping (Belisle 2011). However, once consumers started to migrate into the suburbs in the 1950's, retailers had to adapt to the changing landscape. The first fully-enclosed mall opened in 1956 in Minneapolis, Minnesota (Nadis 2011). This new structure featured fountains throughout and allowed consumers to easily find what they were looking for without having to deal with the weather outside. Malls usually featured at least two main department stores as anchors. In the middle, consumers found a selection of small specialty shops that cater a variety of demographics. (Nadis 2011). An abundance of free parking throughout helped to make shopping at malls a lot easier as opposed to shopping downtown. While the building of malls heavily fluctuated, in the 70's, construction started to decline in the in the late 80's and 90's (Nadis 2011). The rise of the internet, provided consumers with a virtual shopping mall that could be accessed any time they wanted. Because of this, many mall developers have had to reconfigure them in order to meet changing consumer needs. Many malls have transformed into community centers that feature libraries, grocery stores, and fitness centers and movie theatres (Parmley 2017). Other developers have tried to bring back the excitement of going to a mall with the creation of the lifestyle center (Yan et al., 2009). This new type of shopping center tries to recreate the feel of a small town's main street. Parking is usually located directly in front of the store entrances and the entire center has an upscale and open air feel. Lifestyle centers also try to differentiate themselves by featuring stores that appeal to a more affluent demographic and off as well as offering an atmosphere that cannot be found elsewhere. (Yan et al., 2009)
- Point of sale systems provide retailers with accurate inventory management and allow consumers to easily pay for their purchases (Niemeier 2013). Today, consumers hand their merchandise to an employee who will use a electronic scanner to identify the item. The point of sale system will then automatically add up the total amount of the consumer's items and allow him to pay for it quickly and easily. Up until the 1970's though, it was much more difficult for transactions to be completed. Punch tickets had to be removed from products and scanned using an optical scanner, so that companies could tell what item was being purchased by the consumer. This made completing a transaction a lot more time consuming (Cortada 2004). Retailers were also receiving incorrect product information due to errors that were happening when employees entered information. Executives from leading grocery retailers eventually got together to develop a system that would improve overall productivity and make the checkout process more efficient for consumers (Cortada 2004). The end result was the development of the Universal Product Code system that we know today. Under this system, each product is assigned with a symbol and a special number that can be scanned throughout all parties of a retail supply chain. The early majority of products that contained UPC barcodes, were in the grocery category. Eventually, all products started to contain a UPC (Grewal et al., 2011). This new system not only gives retailers better inventory control but allows all members of the supply chain to more effectively work together in order to get product into store shelves (Grewal et al., 2011). With today's point of sale systems, retailers can track an item from all areas of the supply chain from the product's creation to its distribution and get a better idea of what products are selling (Grewal et al., 2011).
- Another retail innovation, is the creation of electronic kiosks. Today, these touch-screen computer stations can be found in lots of public areas, from hotels, to airports, to shopping malls, and even fast-food restaurants (Rowley & Slack 2003). These self-service machines allow consumers to easily find out information about products that are available in the store. In addition, with lots of retailers offering loyalty cards, these devices can allow consumers to scan them and find out about rewards that they can receive. If a consumer is in a shopping mall, the kiosk can serve as a electronic directory that helps the customer find the store that he is looking for. (Rowley & Slack 2003). Today, many restaurants are looking for ways to speed up their service. A person can use miniature kiosks at his table to order drinks and desserts without talking to his server. Since many fast-food restaurant workers frequently have trouble with order accuracy, chains like McDonalds are installing touch-screen kiosks that would allow customers to place their orders and ensure that they get exactly what they want (Kioskmarketplace.com 2016). The popular convenience chain, WAWA already uses these systems whenever a person orders a sandwich from their deli counter (Tenser 2003). While electronic kiosks are useful it is important that they are well designed and for the right use. As Rowley and Slack state in their article Kiosks in retailing: The quiet revolution: "But, as with other public access systems, it is important that the kiosk is designed to support the task, the user profile and the environment in which the task is to be performed." (Rowley and Slack 2003) These devices can greatly improve a retailer's accuracy, efficiency and overall customer experience.
- When it comes to the paying for purchases, retailers have provided consumers with an easy and convenient option with the introduction of credit and debit cards (Radu 2002). These cards allow consumers to make purchases without cash. When a consumer uses his credit card, he is receiving a loan that he will agree to pay off at the end of the month (Radu 2002). Credit card companies make money by charging interest to consumers when they fail to pay the total amount of the loan. If a consumer uses his debit card, the amount of the purchase is deducted directly from his bank account. A magnetic line that is located on the back of the card is swiped at a point of sale terminal (Radu 2002). In 2012 it was reported that there were over 175 millions credit card account holders in the United States (Equifax 2012). While using credit and debit cards might seem like a good payment choice, the cards can be been exposed to security breaches if the retailer is not careful. Just before Christmas in 2013, Target announced that the data of 40 million customers was compromised. (Passman 2014) The Home Depot was faced with a similar problem months later as well. (Passman 2014). Because of situations like these, the credit card industry agreed to alter the design of the cards in order to add an additional layer of protection (Jones 2014). All credit cards are now required to have a built in chip which is embedded into the front of the card. Instead of swiping the credit card on the side of the card reader, the consumer must now insert the card into a slot that is located in the bottom. Once the machine detects the card's chip, the transaction amount will be processed and charged to the consumer's card. While chip technology slows down the checkout process, it allows the consumer to feel more secure when making a purchase since the chips are difficult to counterfeit (Jones 2014).
- In 1997, the very first forms of internet shopping were born. (Doherty et al., 2010) No longer was it necessary for consumers to get into their automobiles and drive to a brick and mortar retail location if they did not want to. Today, the internet offers a large selection of retailers that consumers can purchase from without leaving their homes. There are numerous advantages that can give e-commerce retailers a competitive advantage. Unlike a traditional retail store, internet stores can be open 24 hours a day and do not need to always be staffed by employees (Doherty et al., 2010). A small retailer and a big retailer can compete on an equal playing field since it is easy for the consumer to find them. E-retailers also do not have to pay for the additional expenses that are associated with having a regular storefront which allows them to offer items at a lower cost. (Doherty et al., 2010). While there are many internet retailers that specialize in one category like shoes and pet supplies, some e-retailers offer many different categories to choose from (Doherty et al., 2010). Amazon.com, which is the largest and best known e-retailer sells almost anything a person can think of. In an effort to remain competitive, traditional retailers have launched their own websites, which allow customers to browse through most of their selection of merchandise online (RTMG 2010). Customers can even check to see if an item is in stock at their local store locations. Since consumers are often giving sensitive information like their credit card or bank account numbers electronically, it is crucial for internet retailers to ensure that their businesses are fully secured and that customers can feel safe buying from them. The internet has provided consumers with a whole new way to shop and changed the way we do business (RTMG 2010).
- One of the biggest and most recent innovation is the installation of self-checkout lanes in retail stores. A company named NCR was responsible for manufacturing and installing the first one in 1998 at a grocery store in Kansas (Pantano and Timmermans 2011). With the help of a touch screen and a point of sale system, the consumer has the option to scan, bag, and pay for their merchandise all by themselves. While self-checkout systems were initially found only in supermarkets, many mass-retailers from The Home Depot to Wal-Mart and Target started to incorporate these into their stores (Pantano and Timmermans 2011). According to a recent statistic, about 2.5 billion transactions occurred using NCR's self-checkout systems. (Pantano and Timmermans 2011) When a consumer uses a self-checkout system, he will usually press a start button before being asked to scan each of his items. Once an item has been successfully scanned, the consumer can add the item to his bag. As each item is scanned, the customer will see a tally of all of the items that he is buying along the current total cost. An attached scale can be used to weigh any fruits and vegetables. Once all of the items have been successfully scanned and bagged the customer can insert any coupons that he has before paying for his transaction with his preferred method (Pantano and Timmermans 2011). While self-checkout may seem like a easy and convenient alternative for consumers, many people admitted that they preferred to use traditional checkout lanes and that they only use it when there are lines at the other lanes (Pantano and Timmermans 2011). The systems also have their drawbacks. If a customer makes a mistake there can be a pause to the system that can slow down the checkout process. Since problems like this one are a regular occurrence, self-checkout lanes are staffed by employees, who assist customers with the process. Even so, ninety-four percent of people said they would continue to use self-checkout lanes to pay for their purchases. (Pantano and Timmermans 2011).
- One of the biggest changes for the way retailers communicate with people is through the use of social media. According to a report, there were over 4.2 billion mobile social media users around the world (Fantima et al., 2015). Social media sites like Facebook and Twitter allow consumers to stay up to date with the latest promotions that the retailer is offering (RTMG 2010). In addition, consumers can also use social media as a forum for giving instant feedback about the way the retailer operates. If a customer is dissatisfied with a product purchased or the way a situation was handled, he can post on the retailer's social media page and let the retailer know about the complaint (RTMG 2010). Retailers need to constantly stay on top of social media pages in order to maintain their reputation. If the retailer does not have a high brand image, it will likely receive a lot of negative feedback from consumers. It is also important for retailers to understand their core demographic and ensure that all social media posts are relevant to their lives (Voight 2007). For example, since lots of college students shop at Target and use social media, the company thought that it would be a good idea to create posts that would appeal especially to them. The company extensively researched the types of conversations that the retailer hoped to create with the students (Voight 2007). For example, one post showed a picture of what a dorm room could look like with Target's furniture was shown. Target's plan worked perfectly and created a forum that inspired students with new and creative ideas and allowed them to talk about how much they enjoy shopping in the retailer's stores (Voight 2007).