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Retail technology year in review: 2014

January

The year kicked off, as ever, with UK retailers painting a mixed picture of the health of their industry via the annual roll-out of Christmas trading statements.

Among the festive winners were Next, John Lewis and House of Fraser, which all posted some encouraging figures, but for Marks & Spencer (M&S), Morrisons, Debenhams and Mothercare – to name just four – it was a cautious start to 2014 after some sluggish trading compared to previous years.

Later in the month, the retail technology world descended on New York for NRF's Big Show. Setting the agenda for the solutions expected to be seen around the world in 2014, the annual tech showcase indicated that – after years of retailers grabbling to get their digital offerings up to speed with consumer requirements – future success is set to revolve around the store. In particular, success will rely on the extent to which new solutions are efficiently deployed in and combined with retailers' store portfolios, to provide a seamless shopping journey across channels.

Essential Retail will be attending the US show next month, reporting back on all the trends and predictions for 2015.

February

Noteworthy stories from February included the launch of the new M&S website, which replaced the retailer's previous offering that had been hosted on the Amazon platform. The high street mainstay unveiled a magazine-style site that was build to inspire its customers, but some regular shoppers were put off when they were made to re-register for an online account – and later in 2014 the retailer reported a surprising year-on-year sales decline in online sales as the new portal bedded down.

Meanwhile, rumours of merger talks between two of the UK's largest retailers, Dixons Retail and Carphone Warehouse, were confirmed. By the summer, the two businesses had come together under the new name, Dixons Carphone, promising to deliver the products, solutions and services to help consumers in an increasingly connected world.

March

The European retail industry descended on London's Earls Court in March to visit Europe's largest end-to-end retail solutions show, RBTE. At the event, a record number of visitors were able to hear from some of the top names in retail – including Charles Tyrwhitt founder Nick Wheeler, Carphone Warehouse CEO Andrew Harrison and Boohoo.com chairman Peter Williams – and to visit more than 300 exhibitors showcasing the latest tech solutions transforming retail.

All the major themes impacting the modern retail organisation were discussed, with a particular nod to the various definitions of omnichannel retailing.

The start of the springtime also saw John Lewis unveil plans for its in-house innovation lab, which promised to give tech start-ups an opportunity to bring their solutions to market and potentially create new business strategies for the department store itself.

It has been a theme of the last 12 months for the larger retail players to invest in innovation and work more closely with smaller businesses to try and create an agile technology environment that allows them to react quickly to fast-changing consumer trends. The winner of the inaugural JLAB, announced in September, was micro-location technology company Localz, which won a £100,000 investment from John Lewis after a 12-week competition and mentoring programme.

April

In a pre-cursor to offloading the mother and baby products e-tailer Kiddicare from its portfolio later in the year, supermarket Morrisons announced the departure of its digital boss Simon Harrow, in April.

And while the Yorkshire-based grocer has been slow to delve into the online retailing world, a leader in the digital space – Amazon – continued to innovate, through the launch of its Dash solution. The product allows consumers to add products to their online shop from the comfort of their own home, with just a wave of a new wand tool.

May

As the year approached its halfway point, the CEO-in-waiting of the soon-to-be Dixons Carphone, Seb James, gave the British Retail Consortium Annual Lecture in central London. Delighting the vendor community that for some time has been preaching the benefits of data analytics in retailing, James informed an audience full of industry delegates that the future of retailing was based on science.

He suggested that retail marketing teams will soon be full of PhDs and he argued that retailers will know what customers want before the customer has even placed an order – thanks to the growing digital footprint shoppers now leave behind on their respective purchase journeys.

Another emerging industry theme set to gain further traction as the year drew on was the concept of the mobilised store. During a results announcement ahead of the summer season, fashion retailer Burberry hailed the success of using iPads in its stores to serve customers and keep shop assistants in tune with stock levels and company information.

June

June saw two of the world's largest retailers make significant moves that acknowledged the fast-changing industry they now find themselves in.

Tesco CIO Mike McNamara spoke about the importance of the internet of things for his organisation and the wider retail world, while further building the company's Tesco Labs team. The group is made up of designers, developers and researchers whose role it is to look into identifying future trends in retail.

US-based retailer Staples, which has stores around the world, also opened an eCommerce development centre, which provides the company with a dedicated hub for exploring new technology and how it is impacting the way people conduct their lives and want to shop.

July

Tesco is the largest retailer in the UK, so it's perhaps no surprise it was making headlines again in July when it announced that CEO Philip Clarke was to be replaced by Unilever's Dave Lewis.

Clarke had overseen a turbulent period in Tesco's history, but worse was to come in the lead-up to Lewis's arrival as the company had to reveal to the City that profit estimates had been overestimated to the tune of a quarter of a billion pounds. Since the revelation a number of senior directors have been dismissed and the Serious Fraud Office has been called in to investigate the situation in full. Watch this space for further details.

Elsewhere in retail, the growing popularity of social media and the recognition that shoppers enjoy sharing their experiences during the shopping process led furniture e-tailer Made.com to launch its own social network, Made Unboxed.

August

Developments in innovative payment systems were a feature of 2014, and in August the UK chancellor, George Osborne, announced the government would be exploring the role virtual and digital currencies – such as Bitcoin – can play in the nation's economy.

While wider adoption of Bitcoin and the like may be some way off for the retail industry, comments from Asda in the summer showed that the burgeoning new service of ordering online & collect in-store has the potential to grow exponentially as a percentage of sales over the next few years. Click & collect is certainly being looked at as an option by the wider retail community, following noteworthy success within grocery market, department store and online fashion circles.

September

If you were to take a tally of the UK's large and medium-sized retailers, chances are that international expansion would feature highly on their plans for the months ahead.

Value fashion retailer Primark is one such business on the global growth trail at present, and September saw the business announce that it is eyeing rapid expansion in the US. The first of what looks like being a substantial number of Primark US stores is expected to open towards the end of 2015.

On a further US note – but one that will ultimately impact the European market in 2015 – Apple launched its mobile payment service ApplePay as part of its iPhone 6 unveiling. Mobile payments have the potential to have a significant influence on the way consumers buy their shopping in the coming years, and the move by Apple is expected to set the wheels in motion for more m-payment services around the world.

October

As the 2014 nights started to draw in, eBay and PayPal announced that they were to demerge, with eBay president and CEO John Donahoe saying the two businesses "will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets". 

MasterCard and Zwipe also launched a new biometric contactless card that uses a person's fingerprint in the payment authentication process. It is widely expected that biometrics will play an even larger role in retail – behind the scenes and for payments – in the years ahead.

November

On the subject of payments – Oxford Dictionaries named "contactless" one of its words of 2014, in November.

The decision represents the growing acceptance of this form of payment and the wider use of the NFC technology behind it to pay for travel, particularly across London's transport networks. The maximum contactless payment is set to edge up to £30 in 2015, as consumers become more comfortable with frictionless transactions.

Meanwhile, during a trip to JDA Software's FocusConnect event in Barcelona later in the month, Essential Retail editor Ben Sillitoe interviewed Justin King, the recenty-departed CEO of Sainsbury's. King questioned whether eCommerce was having as big an impact on grocery retailing as some observers have suggested, and urged retailers not to forget the importance of the store where the majority of transactions continue to take place each week.

Ahead of the launch of Sainsbury's dramatic World War I Christmas Truce advert for 2014, King also slammed other retailers for launching their festive campaigns too early and for creating marketing campaigns that do not offer a clear indication of the brand they are supposed to represent.

December

This month looks like going down in history as the December when Black Friday started to take hold of UK retailers' pre-Christmas pricing strategies. The US-based markdown-driven sales event has filtered into the UK retailing consciousness, with the largest retail businesses east of the Atlantic rolling out deals, promotions and money-saving opportunities on 30 November.

It prompted a record spike in sales at some retailers, but it also caused websites to crash and backlogs in online order deliveries, while the longer lasting consequences of driving down sales before such a critical time of year are yet to become clear.

Rounding off the year, last week saw online fashion retailer My-Wardrobe sell its assets to Net-a-Porter following a tough few years of trading. The business will continue to sell items from its store in Bayswater until stock is cleared, but the closure of the online company is a stark reminder to all retailers that despite the exciting opportunities ahead – driven by eCommerce and new technology – the economy is still fragile. Well-thought-out multichannel strategies are required to triumph in an increasingly competitive landscape.

What were your retail highlights of 2014? Please feel free to respond below or tweet us @EssRetail.

Season's greetings and a happy new year from all at Essential Retail!

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