Technology trends in retail for 2020. Part II: Cybersecurity & Digital Strategy

Wpis dostępny jest także w języku: polski

Recently, our daily reality has been dominated by fears caused by the COVID-19 pandemic. The situation, however, will not last forever and still this year we will move from the crisis management phase of the sudden turn of events as well as careful monitoring of the epidemiological, economic and political forecasts, to a new but stable status quo. Bartłomiej Łatka, Sales Director at Euvic IT, writes about what technology has to offer in the retail segment in 2020 in the second part of the article.

C for Cybersecurity

It is beyond doubt, that we will see a lot happening in the security field in 2020. Particular attention, however, should be paid to two aspects:

• Cybersecurity, which concerns online expansion of retail sector as well as GDPR (pl. RODO) regulations and fraud prevention;
• sanitary safety, which has increased enormously as a result of the COVID-19 pandemic.

Many online sellers have already discovered that insufficient online data security can pose a serious threat to entire enterprise. What’s more, with the implementation of the GDPR directive in the European Union, the loss of control over data is no longer a mere image problem but also imposes a risk of financial penalties. It was a painful lesson for, among others, Morele.net, fined PLN 2.8 million, for disclosing the data of 2 million customers. What was the problem?  As usual – security expenses, also admitted by the defendant.

Solutions in the area of ​​fraud prevention automate the process of detection of crimes, which account for the loss of 1 to 3 percentage points of gross margin. According to Sensomatric report, most losses are thefts (34%), dishonest suppliers (24%), store employees (23%) and administrative errors (nearly 19%). Traditional physical security based on RFID or direct CCTV surveillance prove to be insufficient today, and  shops` or hotels` owners are more willing to use advanced BI solutions (based on transaction data) or automated camera image analysis to detect the sources of losses. These types of solutions are based on a simple return on investment – e.g. for a small convenience store with PLN 100,000 monthly revenues this statistical fraud in PLN 1,000-3,000 per month.

Sanitary safety in shops, service outlets and hotels is an absolute novelty, but we can expect a further boom for this type of solution. Especially now, when a single COVID-19 case among employees can lead to shut down of whole premises, warehouses or exclusion of selected hotel rooms from use for many days. The emphasis on employee safety is also intensifying. This is where come in the contactless systems, scanning body temperature at entrances, and can help to detect people with high body temperature and take appropriate steps (e.g. not allowing the employee to work or disinfecting a hotel room with extreme caution).

D for Digital Strategy

As we all know, sales are gradually but surely migrating to online. This process happens the faster the more people regularly dive in their smartphones. At the same time, physical stores still retain a strong market position, due to the time and cost of delivery or the possibility of physical contact with the product, e.g. to assess its quality. In some areas (music, books, computer games), online sales have almost completely supplanted physical sales. What’s more, every year, whether through social media, the popularization of mobile applications or the monopolization of market fragments by specific platforms (such as Amazon, Allegro or Google Maps), the burden of consumer decisions is increasingly shifting online. In this respect, it is safe to say that big trade, without the right digital strategy simply won’t survive. Where can technology find its place?  At least in several areas: omnichannel, mobile applications, BigData, proximity marketing or SEO. I will mention omnichannel, BigData and SEO in a little bit below, describing the e-commerce trend, but at this point I would like to focus on mobile applications.

A big surprise for the market turned out to be Żappka, whose success in mid-2019 was reported in the media. Rossmann Club and Mój Carrefour also proved to be popular loyalty applications. A study by Spicy mobile clearly shows that there is no turning back from mobile today. Although we do not know yet which direction this area will develop (loyalty programs, mobile stores, integration within broader shopping platforms), it seems that the money invested in it already has a high rate of return.

There are also some non-obvious elements of the digital strategy in the mobile area, which in particular include third-party applications that are worth integrating with your own solutions. What applications are these? First of all, payment systems (PayPal, Revolut, Blik), independent loyalty programs (Payback), credit and payment services (Bluemedia, PayU), specialized solutions (Booksy) or proximity marketing tools based on beacons and Google location services.

Developing a digital strategy for many entrepreneurs can be a hard nut to crack. However, it is worth remembering that today there’s no need to try coming up with a strategy relying only upon own efforts. It is worth choosing a partner who will help to successfully undergo digital transformation, relying on their know-how and knowledge of the best practices appropriate for a given sector.

Cybersecurity and Digital Strategy will be an obligation rather than a privilege in the coming months. You will learn from the next article about what other trends will constitute the “must have” for the retail industry.

The author of the article is Bartłomiej Łatka, Sales Director at Euvic IT.