In 2018, our customers have been head-down focused on integrating critical retail technologies required to thrive intoday’s hyper-competitive environment. Significant digital transformation took place, but there are still more changes to come. As 2018 draws to a close, here are five trends that will shape retail in 2019.
Evolution of omnichannel– The evolution to omnichannel retail is nothing new and has been a tremendous focus in 2018. Many retailers are flexing their omnichannel muscles for the first time this holiday season with options like BOPIS (buy online, pick up in-store), ship-from-the-store and mobile checkout. But the evolution has just begun and there is still much to be done. We expect to see continued investment in omnichannel capabilities from retailers in 2019. There will be a move to increasingly sophisticated frictionless checkout. Retailers will pursue the front-end transformation of their stores to accommodate seamless omnichannel shopping. The current holiday shopping season will fuel efforts with a better understanding of traffic flows, challenges and must-have criteria for the optimal customer experience.
Immersive customer experiences– As retailers strive to differentiate themselves and build brand equity among generations of shoppers characterized by low brand loyalty and instant access to information, price comparisons and alternatives, savvy retailers are adding value with experiences. From digital signage to virtual reality, interactive audio and augmented reality, retailers are mapping out the experience they wish to deliver to their customers and investing in the technologies and infrastructure required to do it. Expect to see more, richer, more engaging activities in stores that are positioned for long-term success.
Network migration– The great network migration began with the transition of the data center from on-site to the cloud. However, with the proliferation of IoT devices, IP video and analytics, retailers are sensing a need to keep efficiency and reliability high by computing “on the edge.” Retailers are still seeking the optimal balance between migrating data to the cloud and keeping it close to the stores. Infrastructure upgrades and adjustments will be necessary to support the optimal network set-up.
Focus on inventory accuracy– Inventory accuracy continues to be a challenge for most retailers. A recent report from ABI indicated that traditional systems can drop inventory accuracy to 65 percent. The delay in adoption of highly sophisticated AI systems plus video and other technologies that offer near 100% accuracy is still largely attributed to the enormous expense of implementing these solutions. With a price tag running up to half a million dollars per store for a big box environment and so many other technologies competing for share of budget, many retailers are doing the best they can with the technologies they already have in place. However, as the pressure for faster, more accurate product delivery mounts, retailers will continue to take the plunge. When investing in inventory tracking systems, they may also realize unexpected benefits. ABI Research calculates that an apparel store with annual sales of just under $6 million can realistically achieve a 44% ROI within the first year, with returns increasing to over 200% in the third year.
Push to self-service– Driven by the desire to offer speed and efficiency as well as reduce the cost and error associated with human labor, there is an enormous push to offer self-serve capabilities in retail establishments of all kinds. From self-checkout in retail and grocery, to ordering kiosks in quick serve, to tablets on the tables in fast casual restaurants, self-service is growing by leaps and bounds. Retailers’ challenge will be to find the right balance between automation and helpful, human customer service. They will also need to ensure their back-end systems can efficiently enable accurate and fast self-service.
With Amazon continuing to push the industry toward the point of optimal efficiency and a completely customer-centric mindset, technology is the key to retailers’ success. Here at Telaid, we’re prepared to help you undergo the digital transformation in the most cost effective and expedient way possible. We’re excited to see what’s to come in 2019!
