Ryan Wehner, Industry Director Retail & Logistics, EMEA, VMware
It can be hard to keep up in retail, such is the pace at which it is moving. The rise of online commerce over the last two years and the need for greater competitive advantage, has collided with an increase in customer expectation. It has created this cycle of perpetual improvement where each innovation is more influential than the previous one.
It is putting pressure on retailers to embrace “smart” digital experiences and the reason why we have developed our latest eBook, “Smart Retail”, in partnership with Intel.
Tremendous speed of change
The eBook examines the macro factors shaping retail today and the technology driving these changes. This is vital because creating a cutting-edge eCommerce presence is no longer a “nice to have”, it’s a necessity. We’re now seeing the equivalent of a digital arms race happening but under the pressure of consumer sales cycles like Christmas and Black Friday. While brands may want to evolve their estates, software or processes, they simply cannot countenance failure or downtime around peak periods. This is why we’re seeing such tremendous speed of change. According to Statista, the global retail automation market is expected to grow from US$ 13.5 billion this year to over US$ 33 billion by 2030.
But as retailers look to the future, they’re increasingly recognizing technology as more than just a vehicle for innovation, leveraging it strategically to build rewarding experiences that position the business as a trusted brand. Seemingly overnight, the industry created powerful eCommerce platforms and rolled out new services such as buy-online-pickup-in-store or curbside. The retailers that were most ready to meet the near-instant shift in customer expectations acted as a beacon for others.
This technologically driven change isn’t just impacting the lifting and shifting of goods, but people too. From an employee perspective, we’re in an era of the ‘great resignation’ – a mass exodus of disillusioned employees from the workforce – felt acutely in the retail sector. According to this Forbes piece, in August 2021, 721,000 US retail workers handed in their notice, representing the highest number of resignations in the retail trade sector in over 20 years. The result is that retailers have been forced to think about how they can cultivate better working conditions for staff and have turned to technology to upgrade a retail associate’s experience by optimizing efficiency, minimizing busy work and giving them the opportunity to think creatively, communicate and share their ideas.
This is filtering down to processes too with many merchants transitioning from paper checklists to task-management apps, with reminders and even gamification to help employees stay on track. Instead of confusing lists tacked to break room bulletin boards, managers can use algorithms to forecast when workers will be needed and online calendars to manage shift assignments more transparently.
Meanwhile, digital transformation and innovation have led to major opportunities for efficiency across operations. Whether it’s reconfiguring supply chains to place a much greater emphasis on home delivery, reaching out to new locations, or just adopting smart technologies in warehouses, there are significant gains to be made.
The huge opportunity – and challenge – right now is to maximize profitability. On the one hand, that means making retail operations more efficient. On the other, it means creating omnichannel customer experiences that maximize revenues, both in-store and online. Traditional bricks and mortar retailers have a great strategic advantage in being able to combine in-store experiences with today’s must-have tech. As an example, M&S became the first UK food retailer to incorporate on-the-spot payment in its stores in late 2020. Pay With Me allows customers with a small number of items to check out with a M&S staff member while they are queuing, rather than having to wait for a self-service or manned till to become available.
An innovation arms race
The retail customer has ascended from being just King or Queen, and is now a demi-God. The fast-paced adoption of digital technologies in retail and the corresponding escalation in customer expectations have led to a true innovation arms race. Consumers demand to be able to buy what they want, when they want, online or instore – and, if in store, at any stores – however they want, and have it delivered to wherever they want. So much so that they’re happy to pay for it. According to this PWC report, 86% of buyers are willing to pay more for a great customer experience.
The right technology is key to unlocking the full power of these value propositions — past approaches to technology implementation will no longer be enough. The pace and scale of the transformation that’s now required — and the role that will be played by emerging technologies, where skills are at a premium — demand new approaches to solution and talent development. Success will require retailers to collaborate closely across their technology ecosystems, a significant break from the more transactional relationships of the past.
Dream a richer digital dream
Whether it’s through automation, shifting to smart cloud platforms, providing greater opportunities for mobility, or increasing in-store interactions with technology, smart retail enables businesses to dream a richer digital dream. And by delighting shoppers in innovative new ways, retailers can not only build a larger and more loyal customer base, they can also maximize their revenue and their reputation.
Download the VMware and Intel eBook, “Smart Retail” today to see how we can equip you for the future of retail.