by Jarek Matschey, Director Retail, VMware EMEA The world of retail is changing rapidly. And not just the stores we buy from, but how we shop, when, how we pay for goods and the way in which those goods move through the supply chain. The impact of which has redefined the perception of customer experience […]
Ed Durbin, Global Director of Retail Solutions, End-User Computing, VMware
If I told you the world of retail was advancing at a rapid pace, you’d be forgiven for thinking I was going slightly mad. This is considering the current situation of boarded up shops, redundancies, a catalogue of big-name collapses and the ongoing challenges related to social distancing measures.
But the fact is the impact of the COVID-19 pandemic has hit fast forward when it comes to retail innovation. A by-product of which is always going to be casualties as slower to evolve businesses are overtaken and replaced by those designed for the digital era. And that is precisely what we’re seeing right now.
Like all of us, I have had to hit the shops – both online and traditional brick and mortar – and been both impressed and inspired in the way that many retailers large and small have risen to the challenge via live streaming services, offering pre-orders and moving into new markets. Or, in the case with companies like Amazon, ramping-up a supply chain and redoubling efforts to continue getting the right product to the right person rapidly.
Irrespective of the scale or type of disruption, retailers have not only had to massively adapt to unprecedented change in the short term, but prepare themselves for a new world in the aftermath of this pandemic. In the same way 9/11 brought about lasting changes to the travel industry, I believe COVID-19 will do the same for retail.
Accelerating retail change
This is because the crisis has underlined and proved the need for technology-based solutions. As consumers, we have now become accustomed to overnight delivery, click and collect services and online ordering from places that would otherwise have been in-location only like boutique retailers and restaurants. We’re already seeing many examples of this. Supermarkets, for instance, have been in unprecedented demand. Tesco, a UK supermarket chain, had to double its online delivery slots and was still unable to keep pace. According to Nielsen, between 24 February and 21 March, UK shoppers spent an extra £2bn on food and drink. Elsewhere, a McKenzie report found that retail fashion executives expect online penetration will increase about 13% within the next year alone.
We won’t be going back just because we find a cure, vaccine or way of living with the virus. Organisations throughout the retail sector that want to keep up with customer expectations and keep pace with this speed of innovation are now totally intertwined with technology to reach their consumers and provide seamless, shopping experiences.
Thee trends in retail technology
Globally, I am seeing three key trends emerge that are likely to propel the next wave of retail activity. Firstly, the dichotomy between online and brick and mortar is amalgamating. For years each has been pitted against the other in an ‘either/or’ scenario. I know several local stores that are being closed as consumer-only destinations and evolving into fulfilment centres for local (and therefore rapid) delivery. US department store Nordstrom is a great example of a retailer doing this with its stories acting as hub destinations for tailoring, bio-safe shopping and cross-channel orders, collection and returns. It’s something I believe will be the blueprint for many stores in our new normal.
The next major trend is the move to cashless. Of course, this is not new but has been hugely accelerated during the pandemic in how smaller stores have been able to trade. On a larger scale, the replication of the AmazonGo model is prevalent too. Way before the crisis Tesco was trailing its own version (of AmazonGo) in the UK and it won’t be long before it’s a mainstream presence in convenience stores where the connection between digital bank accounts, online profiles, web platforms and physical goods are totally amalgamated.
But it’s not just the consumers impacted by all this. So too are the staff, particularly where safety is concerned, which is the third big change. On the front-line companies are looking for ways where shared contact (such as tills or communication devices) can be deployed. Brands like Startbucks and a major worldwide cosmetic company are already doing this via VMware’s WorkspaceOne solution but many more will follow suit. There are innovations coming to the market too. For example, Samsung has created a device that can be submerged in alcohol for up to three days after usage. In the back office, brands are not only looking at ways in which desktops (and costly office space) can be removed, but also at how people and operations can be virtualised should there be a resurgence in this, or any other, virus in years to come.
There will always be exceptions that prove the rule. High-end stores like Harrods will continue to attract in-person visits and the type of clientele that wants hands on service. This market will bounce back quickly, as it always does. But away from this, there’s a retail revolution afoot.
Retail: Ready for anything
Today, technology is central to the shopping experience and retailers need to make sure they are equipped and ready for anything. And while much is written about the massive dominance of Amazon or the likely closures of high street shops, there are stores doing great business that we’ve most likely not yet heard about selling everything from wine to make-up.
And there’s a big opportunity here because the demand is there from the consumers and the technology is in place to make it happen. Being online is one thing but creating a mobile app or environment where a customer’s personal data is saved – sizes, preferences, address and shipping requirements and payment details – will become the norm. But this needs delivering seamlessly and securely. Once again, we can cite Amazon as a shining example here.
This means having a platform, a digital foundation, in place capable of delivering it. If this pandemic has taught us anything it is the need to be flexible and have the capacity to react to and reflect demand. The reason why the major supermarkets or cosmetics retailers have been able to cope with massive surges in demand is that there they have built in flexibility into their IT strategy. Whether it is cloud, security, storage or new app development, these retailers have been able to do what is required, when it has been needed. Key to success will be the mantra we serve our customers by, and that’s the ability to create, run, manage, connect and intrinsically protect any apps, across any cloud, and deliver to any device, simply and at speed. Target in the US is a good example. It is trying to do everything on a single platform to adapt and support any requirement, irrespective of what it is. And no-one wants to tell their CEO that I can’t deliver this service to customers and / or employees because our tech doesn’t allow it.
This is key for survival. The last thing that any retailer wants is to worry about whether the infrastructure will survive because there’s too many people trying to buy something.
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