The Retail Technology Glossary
As the retail industry has changed rapidly over the last decades, new words and concepts has emerged. In our glossary you will find words and terms that might be useful to know in a retail context. Have a look!
Several new words and concepts have emerged. Is your knowledge up-to-date?
Augmented Reality (AR)
Augmented reality basically means adding digital elements to the real world, through the use of smartphones or other hardware. One of the most notable initiatives with AR was IKEA Place, where users could place furniture and other products in their home with the help of augmented reality and an app. For retail, AR is said to have large potential both for online and in-store shopping, as a way of showcasing product features and spark curiosity.
Automated checkout
When using an automated checkout, the items that are to be purchased are automatically recognized, leading to the payment process instantly. This is by some seen as one of the most promising retail technologies, as it offers the least friction for shoppers. There are however challenges to this type of checkout, as the technology sometimes fail to register all items when shopping a lot. Amazon’s “Just walk out” concept has shown both the benefits and disadvantages of automated checkouts.
Automatic Identification and Data Collection (AIDC)
A category of related technologies that are used to collect data - without any manual intervention. This consists a wide variety of technology - such as fingerprint scanning on the phone, or the self-scanning solution at the grocery store. The data is not necessarily collected from an individual person - it can also be collected from objects, sounds, images and more. Several techniques can be used for AIDC, such as barcodes, NFC and RFID.
Biometrics
By using an individual’s physiological or behavioral traits, one can identify the user. This is called biometrics. Examples of biometric technology is fingerprint scanners, voice recognition and face scanning. There are 16 different types of biometrics according to the Biometrics Institute, however some are more common than others.
Physiological biometrics concerns relatively static attributs of an individual, such as the fingerprint or the face contours.
Behavioural biometrics focuses on the distinctive characteristics of gestures, movements and other motor-skills of the individual.
Bring your own device (BYOD)
Bring your own device means that shoppers are using their own smartphones in order to scan products in the store. Usually, the retailer provides an app that is used during the shopping trip, making it possible for the shopper to scan the items as the shopping trip progresses. Sometimes there is also an integrated payment system, so that the customer can pay directly through the app as well.
Checkout-free
Similar to automated checkout, checkout-free systems detect the shoppers’ products and bill them as they finish their shopping trip. This is done through using smart carts, RFID or other technology. The most well-known checkout-free store concept is Amazon Go, which lets shoppers purchase items without having to register these themselves. The main idea is that seamless technology will enable shoppers to leave the store without having to spend time at any checkout - either manned or self-service based.
Computer vision
Computer vision means that computer or systems can derive information from videos, images and other digital media - and use this information to make recommendations or take actions. This is a field in AI which is being explored rapidly, so also in retail. For example, retailers can use computer vision to do inventory management, or to provide frictionless self-service checkouts.
Dark Store
A dark store, also known was a dark shop or dark supermarket, is referring to a warehouse or fulfillment centre converted or created for e-commerce. This type of facility is not open to the public, but the idea is that the products inside quickly can be distributed to the shoppers. The dark store can be used as a warehouse, but also serve as a pickup point for customers who purchased their items online. It is common that dark stores has a level of automation integrated, such as robotics or ai for more efficient picking orders.
Generative AI
Generative Artificial Intelligence, also abbreviated GenAI, is a field in AI where text, images or other media is generated artificially. For the retail industry, generative AI can be useful in various ways: creating new product designs, producing compelling texts based on the target customer, or to provide product recommendations based on customer preferences. It can also be used for inventory management purposes, with producing forecasts or doing risk assessments.
Live shopping
Live shopping, also known as livestream shopping, can be described as a live broadcast with the intention to demonstrate and sell products in real life. The host of the live shopping promotes selected products, usually providing a limited-time discount, with the goal of encouraging viewers to shop while the livestream is ongoing. This concept has been particularly popular in China.
Manned checkout (MCO)
Manned checkout is the traditional way of registering and paying for the items. It means that staff members of the store are present and register the items for purchase at the cash register. The opposite of manned checkouts are Self-service checkouts (SCO). Today, many retailers offer a mix of both manned and self-service checkouts, as it has shown to be effective.
Machine vision
Machine vision in retail means that cameras are capturing the process of items being picked up from shelves, and put in the shopping basket. This type of technology is usually associated with automated checkouts, as a way of removing the step of manual scanning for the shopper. Machine vision can also be used for inventory checks, and to gather other data about customers’ shopping behaviours.
Mixed Reality Technology (MR)
Mixed Reality Technology has many definitions, but is most commonly defined as an “environment in which real world and virtual world objects are presented together within a single display, that is, anywhere between the extrema of the Virtuality continuum.” This includes Real environment, Augmented reality, Augmented virtuality, and Virtual Environment. The concept was defined in 1994, and has been expanding ever since, due to technological advancements and technological readiness. In connection to retail, MR is said to have great potential as the new omnichannel approach as been adopted by companies in the retail industry – meaning both online and in-store retail channels are being merged into one experience.
Mobile / Biometric payment
Biometric payment is a point-of-sale (POS) technology using biometric authentication to authorize payments. By being able to register physical characteristics, such as fingerprint, the system can identify the user and thereby approve a purchase. There are several ways to do this, such as by using fingerprint, retina recognition, face recognition or voice recognition.
Point of sale (POS)
Point of sale (POS) is the place where customers do the checkout, and where the purchase takes place. In order for this transaction to be successful, there is usually a need for a POS-system, containing both POS hardware and POS software.
A point-of-sale system is both the software and the hardware that makes it possible to complete the sales, through accepting the payments and to keep track of what is sold. Naturally, this works in various ways depending on if the sale takes place online, in-store, or both.
POS hardware is the hardware that allows you to accept the payments, for example a receipt printer or a bar code scanner. These interact with each other with the help of POS software.
POS software can be described as the place where sales are completed, the items are registered, and the money is transferred. Depending on how advanced the POS software is, additional features such as reporting tools might be available.
Profit protection
Profit protection can be described as the strategies and solutions implemented in order to reduce shrinkage. As retailers are exploring ways to increase both growth and profitability, minimizing shrinkage can be seen as a low-hanging fruit in order to achieve these goals. For some retailers, focus has been on improved inventory managegement, while others have put most efforts into reducing theft or preventing organized retail crimes.
Various security measurements are used for profit protection - depending on the issue at hand, and the action needed. For EasyShop self-scanning solution, there are several functions available for retailers that want to ensure shrinkage is low.
Omnichannel retail
Omnichannel retail can be defined as “the integration of retail channels like stores, online, and mobile into a single, seamless customer experience”. This means that the previous idea of working with several sales channels separately will disappear, as all these channels will be merged into one. This process has already started to happen, as emerging new channels online has changed the retail industry and companies’ ways of doing business.
Organized retail crime (ORC)
Organized retail crime means large-scale theft in retail setting, where the intent is to steal and resell items in order to make a profit. Professional criminal enterprises, such as regional gangs or international crime rings, are counted as ORC.
Contrary to popular belief, organized retail crime does not only entail shoplifting; incidents such as smash-and-grab account for a large portion of ORC. This topic has gained attention during the last couple of years, with an increasing number of security measures being implemented.
Retail technology
The definitions of retail technology are many, however most of them explain the term as digital tools and other innovations, used by retailers in order to enhance their operations. As retail technology is a broad concept, there are many aspects and types of technology that could be fitted here. For example self-scanning, augmented reality and biometric payments could all be considered different forms of retail technology – even if it is possible to use these inventions in other settings as well.
Radio Frequency Identification (RFID)
Radio-frequency identification technology, abbreviated RFID, can be described as a way for retailers to identify items using radio waves. Basically, it has two parts: a tag and a reader. The RFID tag transmits data to a reader, which then provides real-time updates and inventory data. This type of technology is also used in other industries such as logictics, fulfilment and inventory management.
One can differentiate between two kind of RFID tags: Active RFID tags have their own power source, whereas passive RFID tags don’t have a power source. Learn more about RFID self-service checkouts here.
Retailer-owned device (ROD)
Retailer-owned device means that the retailer is providing the self-scanning hardware, for the shoppers to use during their shopping trip. These devices are usually located at the store entrance. Sometimes a membership with the retailer is required, other times anyone can use this retail alternative. During the end of the shopping trip, payment usually takes place in a designated area before the store exit.
Scan and go / Scan and pay
Scan and go or scan and pay are commonly used descriptions for self-scanning. They illustrate the process of scanning as you shop, and either leaving directly or paying instantly when done (without having to register the items at the checkout). Various retailers and software-vendors are using their own description for this type of retail solution, but scan-and-go or scan-and-pay are some of the most common names.
Self-checkout (SCO)
Self-checkout (SCO) is also known as self-service checkouts or assisted checkouts. It means that shoppers are registering their products and handling the payment by themselves, with the help of a self-checkout machine located at the store exit. Usually, the items are registered with the product bar code, but also scales and other tools can be used. Self-checkouts are the opposite of Manned checkouts (MCO).
Self-scanning
Self-scanning in a retail context means that the shopper is using a portable device to scan the product barcodes as the shopping journey progresses. Self-scanning is a form of self-checkout, but with the difference that all items are already scanned during the shopping trip – without the need to unpack or re-pack later. Self-scanning also makes it possible for shoppers to avoid any payment station at the store exit – as this can be integrated into the self-scanning software.
Smart shelves
Smart shelves can be described as shelves that allow for real-time inventory analysis, price changes, or has the ability to display of product information. There is ambiguity here, as some claim smart shelves is solely referring to the shelf displays and product information showcased for the products, whereas others claim it has more to do with the shelves being able to detect when an item has been removed from the shelf, and purchased.
Smart shopping cart/Smart cart
The idea of smart shopping carts is that there is technology that further enhances the shopping experience, however this can be done in various ways. Some of the functionalities of smart shopping carts include
Providing product information
Showing the location of the products in-store
Providing the opportunity for self-checkout
However the specific features of a smart shopping cart differs depending on the supplier.
Self-service technology (SST)
Self-service technology can be described as technology that enables individuals to produce a service independently, without the need for direct service employees. In connection to retail, the use of self-service technology has been described as a way of improving customer experience, and to control costs. The concept of self-service technology can be used in a variety of ways, similar to technology-based self-service (SST).
Technological Readiness (TR)
Technological Readiness (TR) refers to the ability to adopt and use new technologies. It can be said to represent a mental state where both motivators and inhibitors affect and balance how the user will act when encountering new technology. In a retail technology context, the TR can be indicative of how well-received a new emerging technological solution will be. Moreover, the TR has been said to influence the level of intention to continue using retail technology such as self-scanning.
Technology-based self-service (TBSS)
Technology-based self-services is a concept that became popular during the 90’s, as they described a fairly new type of technology – touch screens, ATMs, information kiosks and online shopping. It was also used when describing technology that blurred the line between on-site and online retail. TBSS is often seen as the predecessor to SST (Self service technology), and is therefore not commonly used anymore.
Virtual Reality (VR)
Virtual reality, abbreviated VR, has been described as the use of computer modeling and simulation that enables a person to interact with an artificial 3D visual or other sensory environment. While virtual reality is not a new concept in itself, the recent technological advancements had made VR both more realistic and accessible. Similarly to augmenter reality (AR), it makes it possible to showcase products and their features in a more interactive way, without the need for the actual product to be present. However, the effects of VR and purchase intention is somewhat unclear.
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