This article will look at some key applications of these technologies in the retail and banking sectors. It will explore the benefits these technologies offer and consider the disadvantages they pose.

This is the second of three articles looking at technology applications. The first article considered technology in the home and in the travel industry, and the third article considers cloud computing.

Technology in the retail sector

The retail sector has made significant use of new technology, with developments such as self-checkouts and checkout free shopping, the introduction of beacon technology in and close to stores, and chatbots to support online and in-person shopping.

- Self-checkouts (SCOs)
SCOs allow customers to complete retail transactions themselves, rather than use a staffed checkout. The customer scans the barcodes on the packaging of each item, places them on a weighing-scale (known as the packing area) and makes payment directly at the machine. A member of staff will be available to supervise and assist where necessary.

SCOs are used mainly in supermarkets, but can be found in a wide range of retail settings.

They offer several benefits, both to the store and its customers:

  • Reduced labour costs: one attendant can supervise multiple checkouts.
  • Space saving: SCOs are smaller than traditional checkouts.
  • Reduction in the transmission of disease: customers can carry out transactions with no human interaction, minimal physical contact with the system and pay via a contactless bank card or a banking app on a smartphone (covered later in this article).
  • Speed: self-checkout is usually faster than traditional cashier lanes.
  • Multilingual: some SCOs operate in several different languages. This is particularly useful in large cities and tourist destinations.

Disadvantages of SCOs:

  • SCOs are not well designed for use by disabled customers.
  • SCOs emit loud, repetitive messages which can be irritating for both staff and customers.
  • SCOs make shoplifting easier. In the UK some SCOs combat this by recording and displaying a video of the customer using the machine to help prevent and detect theft.
  • Inventory records may become corrupted if customers do not scan correctly – for example, scanning the barcode of a different product that has the same price.

- Self-scanning
An alternative to SCOs is self-scanning where customers use a portable barcode scanner, or smartphone app, to scan and immediately bag shopping items. When finished shopping, the customer uses a checkout kiosk to download the information from the device and pay for their items.

Self-scanning offers some benefits:

  • It is a more efficient customer experience as customers bag items straight from the shelves, saving time at the checkout.
  • It saves space in shops as smaller areas are needed for the checkout kiosks.

- Check-out free shopping
Some stores take the concept even further and offer a check-out free shopping experience. For example, Amazon Go requires customers to use an app linked to their Amazon account to scan a QR code when they enter the store. Camera and sensor technology is used to see what items customers put into their bags and when leaving the store the customer’s account is automatically charged for the items in their bag. This technology has now also been made available by other retailers.

This provides further convenience to customers and requires fewer staff, however the heavier reliance on technology presents the possibility for more issues, such as downtime or system corruption. The potential for theft is also much greater.

- Beacon technology
Beacons are small wireless devices that transmit Bluetooth signals to nearby smartphones. In retail, beacons can reach customers who have Bluetooth enabled apps on their phones. This allows them to connect with shoppers at key decision-making moments.

Benefits of using beacon technology include:

  • Proximity marketing beacons know the customer’s exact location so they can target the customer in the same aisle as a particular product.
  • Beacons can send discount offers when a customer is passing a store, thus incentivising customers to make purchases or visit shops they otherwise would have passed by.
  • Store layout can be optimised using beacon information about the routes customers take through their stores and how long they spend in each location.
  • Beacons can help customers locate items within stores by proving an indoor mapping experience.
  • Customers can create digital shopping lists and smart adverts can be sent. For example, if the customer puts ‘bread’ on their digital list, the app can ask ‘do you need butter?’ while the customer is close to the correct aisle. This can be helpful to customers and increase sales.
  • Beacons connect with customers in-store and online simultaneously. For example, customers can be prompted to unlock an offer on social media when they enter the store and show them user generated content about products while in-store.
  • Beacons can notify nearby shoppers of in-store events, such as make-up tutorials or book signings. People are more likely to come to events if they are already nearby.

Problems with beacon technology:

  • Beacon signals can be reflected or absorbed by some materials or proximity of other beacons. This creates ‘blind spots’ which may cause irrelevant or delayed notifications to be sent.
  • If customers perceive the notifications to be too pushy they may turn them off permanently.
  • The beacon system is internet based so may be hacked and customer data may be compromised.
  • Some customers may find the concept intrusive and wish to protect their private data.
  • There may be privacy issues as customers may not fully understand the consequences of enabling ‘location services’ and have limited knowledge about beacons, their locations and how they are used.
  • A further privacy issue is that retailers want to track all customers, not just those with the app. This has led to beacon-tracking codes being sold to retailers by app developers.

- Chatbots
A chatbot is a software application that conducts on-line conversations with customers. They are designed to replicate human interactions and are increasingly used in the retail industry. They are mostly used via website popups or virtual assistants, however communications with chatbots via retailer apps, text message and instant messaging are on the rise.

Benefits of using chatbots in retail include:

  • Available 24 hours a day, seven days a week, allowing customers to contact the store out of hours.
  • Chatbots remember user information so offer several benefits when making purchases:
    • Fast and efficient – for example, if a user types in 'order a bag of coffee' the chatbot knows the user’s preferred brand and adds it automatically to their basket.
    • Cross-selling by the chatbot – for example, before checkout it may say 'you haven’t ordered tea for a while, your brand is on offer'.
    • The order can be automatically placed by the user – for example, by telling the chatbot to 'complete purchase with the card on file'.
  • In-store assistance, so if a customer cannot find a product they can ask the retailer’s chatbot and receive information about whether it is in stock and its location in the store.
  • Chatbots can send automatic messages informing customers when home deliveries will take place removing the need to wait at home all day.
  • Many customer service queries can be efficiently handled by chatbots, reducing the number of customer service operatives required.
  • Chatbots can also assist customer service agents by quickly finding the answers to customer queries and providing them with accurate, up-to-date information.
  • Sales can be increased by making recommendations based on purchase and browsing information.
  • Details of complaints can be quickly obtained.
  • Multilingual functions can enhance customer experiences.
  • Integration with loyalty schemes – for example, alerting customers when thresholds are met and encouraging the user to visit the website or store.
  • Customer satisfaction questions can be sent to gather feedback from customers.
  • Some chatbots can use artificial intelligence (AI) to analyse customer interactions to gauge their satisfaction without the need for feedback forms or questions.

Disadvantages of chatbots:

  • Some customers may find the approach impersonal and may not want to deal with a machine.
  • Chatbots cannot handle all queries, particularly complex or non-standard queries.
  • Conversation can be limited due to the inability to handle multiple questions simultaneously.
  • The efficiency and effectiveness may be limited due to typing errors or accents.
  • Chatbots struggle with non-linear conversations which jump around an issue.
  • Developing chatbots is expensive and time consuming.

Technology in the banking sector

The banking industry has transitioned from in-person banking to online and mobile banking.

Mobile banking apps provide users with smartphone access to features to better manage their finances, such as checking balances and statements and paying companies or other individuals. For more involved tasks, the app re-directs users to their website to carry out the task.

Even complicated tasks, such as opening new bank accounts, can now be carried out online using software that compares the applicant’s face to a passport photo. 

Benefits of these developments in the banking sector include:

  • Efficient and convenient and reduces dependency on bank branches.
  • Banking information can be accessed at any time and from any location.
  • It provides fully up to date information, making it a useful tool for monitoring finances.
  • Many transactions are carried out immediately, so payment will be with the recipient instantly. The information in the app also updates to display the new bank balance.
  • Easy access may mean users check their account more regularly increasing the likelihood of a user quickly identifying unusual activity on their account.
  • Operational savings for banks due to requiring less staffed counters in branches.
  • Staff are freed up to carry out other roles which require more human input.
  • The layout of banks is more open giving a more spacious feel and improved environment.
  • Queuing in banks is reduced.


  • Internet connectivity issues can prevent access to user’s accounts.
  • It can be challenging for those not technologically fluent.
  • Account numbers could be compromised where an individual stores passwords and other sensitive banking information on their smartphone.
  • Privacy may be compromised through facial recognition technologies. Individuals may not be happy to have their image recorded, and potentially stored, by the bank.
  • Queues in branches may be longer in reality due to the significant reduction of counters.


Innovations in technology are affecting different aspects of everyday life. Some of the technologies that are mentioned in the Strategic Business Leader syllabus have been discussed here with examples to illustrate how they work in the retail and banking sectors. Although these technological innovations offer a number of benefits, there are also some disadvantages and additional risks to consider.

The third article will consider cloud computing.

Written by a member of the SBL examining team