When we think of innovation, we almost always and immediately think of technology. In the world of retail, we think about innovations like drones that deliver, beacons that track us and artificial intelligence (AI) that helps us buy things. The list will grow as new technologies emerge and existing ones improve.
It's Not the Technology; It's The Outcome it Delivers
Technologies that Improve the Customer Experience
The rise of e-commerce has vastly raised consumer expectations about the speed and convenience of shopping, and we carry these expectations with us into the store. In the era of the “high-maintenance consumer,” technologies that improve and enhance the customer experience, both online and off-line, will be critical to growth. “Convenience” is repeatedly cited as the number one reason consumers shop online. Long lines and inadequate parking are the top reasons why consumers avoid the store. From mobile payment platforms to digital mall maps to parking sensors, tech investments should make shopping easier and more enjoyable for the consumer.
Technologies that Save Money
The era of the high-maintenance consumer is also the era of new and rising costs. Minimum wage increases have raised labor costs, while the need to quickly fulfil and deliver e-commerce goods has placed considerable pressure on profit margins. Focusing on technologies that save money and cut costs will be critical to protecting and growing retail profit margins over the next five years. Restaurants, especially in the fast-food and fast-casual segments, have leveraged automation in the form of digital kiosks and order-ahead apps to save on labor costs. Most importantly, cost-saving technologies like automation can insulate profit margins from future price fluctuations, ensuring longer-term growth for retailers and landlords alike.
Technologies that Enable Agility
The third area of technological innovation that will improve retail over the next five years is happening behind the scenes and affects retailers’ operational and logistics platforms. The rise of e-commerce and omnichannel has changed the way retailers get goods from point A to point B. It’s no longer just about delivering goods to a set number of stores on a regular schedule; it’s now about delivering millions of products to millions of doorsteps, on-demand. In order to do this efficiently, retailers must rethink the way they warehouse, stock and distribute products. Retailers must have a better grasp on inventory and supply-chain management, and technologies like radio frequency identification (RFID), which enable live merchandise tracking, will be key. Investing in the technologies that enable this kind of operational efficiency is going to be paramount for retailers in the omnichannel era.
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