The store of the future has arrived and it is threatening to leave technology laggards behind.
The modern store is equipped with cameras that look at you, guess your tastes based on your gender, age and behaviour and send deals to your smartphone accordingly. It also has the technology to reduce endless checkout lines and speed up the process for picking up something ordered online.
The deal-sending screen, made by Intel and used by Sears and others, was just one example of cutting- edge technology on display at this month's National Retail Federation (NRF) conference in New York, showcasing the innovations that retailers are trying out as they fight for shoppers.
New technology can help retailers know their customers' habits and preferences better and further integrate physical stores and e-commerce to make the most of the online sales boom.
"It's anticipating what the consumer wants," Don Kingsborough, the executive overseeing the push of eBay's PayPal online payment processor into physical stores, said at the convention.
To succeed, technology has to bridge the chasm between how people shop online, in stores and on their mobile devices, with more customers now doing all three simultaneously, he says.
Wall Street envisages success in this area as a decisive factor in who will thrive in a tight retail environment: The NRF says retail sales in the United States rose 3 per cent during the holiday season, below its forecast of a 4.1 per cent gain.
US retailers are expected to increase technology spending by 1.4 per cent this year, even as they cut 0.7 per cent from total capital investments such as store renovations, says Deborah Weinswig, an analyst at Citi.
According to Forrester Research, US retailers with 5,000 employees or more spent US$19.8 billion (Dh72.72bn) on technology last year.
Those retailers have an array of technology to choose from, as evidenced by the 500 or so companies exhibiting at the NRF event, which drew 27,500 attendees.
The recent payroll tax increase means that many US shoppers are taking home less money, upping the stakes for retailers, particularly those catering to middle-class shoppers, says Ms Weinswig.
"They're going to need to get the shopper in the store. They're going to need to get the shopper to read their email."
Nordstrom, Saks and Macy's each have spent tens of millions of dollars in recent years to integrate stores into their e-commerce to speed delivery and improve inventory management. A Citi report this month gave those three top marks for using technology, along with Wal-Mart.
"Historically, retailers have had very 'silo'-ed inventory and they have not known as much about the customer as they wanted to," says Eddie Capel, the president and chief executive of Manhattan Associates, whose clients include Macy's and J Crew.
Struggling chains such as JC Penney regard technology as essential to improving sales. The company is far along in a project to tag all of its items with radio-frequency identification devices so that it can track them as they move. One day, this could eliminate the need for cash registers and allow for self-checkouts.
Adidas is expanding its use of screens in stores to display hundreds of shoes on a "virtual wall", helping it compete with its rival Nike. Shoppers who use the screens often trade up to higher-priced shoes, spending as much as €60 (Dh296.39) to €70 more in a purchase than planned, says Chris Aubrey, the company's director of commercial experience.
Several companies at the NRF show devices they say can help retailers get sales staff to better roam the floor.
Certainly, in the race to catch up to Amazon.com, eBay and other e-commerce leaders, retailers must guard against turning off shoppers with technology that is "cool" but ultimately too invasive, such as facial recognition that tells them exactly who just walked in.
"Shoppers will tell us quickly, 'no'," says Jon Stine, the director of the retailer and consumer products practice at Cisco's internet business solutions group.
Still, intense competition leaves retailers with little choice but to push forward to keep up with consumers.
After the collapse in consumer spending that followed the financial crisis in 2008, companies pulled back on technology spending, says Diana McHenry, the director for global retail product marketing at SAS, a provider of business intelligence software.
But she says the risk of falling behind for good is making them focus on bigger, longer-term projects.
"It's like seeing new construction."
* Bloomberg News