Here’s what retailers need to know about optimizing IT — and operations — in 2017.
Omnichannel. Customer experience. Artificial intelligence. There isn’t one single technology or technology-enabled strategy that will deliver success to the retail industry in 2017. Instead, retailers will need to keep an eye on six key technology drivers.
Driver 1: Retail-Store IT
Store operations built on a solid IT foundation are key to an omnichannel strategy. And IT enables the features in-store buyers look for. Optimizing store IT requires investment in:
IT strategy — A solid strategy lets you maximize return on IT investment. It begins with effective IT governance, especially around store launches and remodels. Smart retailers are working with a partner that can manage equipment procurement, configuration and installation.
Preventive maintenance — Active monitoring and scheduled maintenance of IT devices address problems before they occur. That helps avoid revenue-robbing store downtime. Scheduled maintenance should include regular software updates and security patches.
IT support — Retailers need an effective service desk, especially for the growing number of mobile devices used by store personnel. When CompuCom takes over mobile device management for retailers, it’s not unusual to discover 20 percent of devices are inactive. A service desk can make sure issues with IT equipment are resolved quickly.
Measurement — Retailers are used to measuring sales and customer behavior, but they haven’t applied analytics to IT equipment. A qualified IT provider can leverage robotic process automation, a form of artificial intelligence, to automatically monitor, analyze and resolve certain in-store IT issues.
Learn more about retail-store IT.
Driver 2: Retail Channels on the Rise
Which channels are emerging as mission-critical? Focus on these three for the next three years:
Store — What will keep the store relevant as other channels grow in popularity? Integration with e-commerce and focus on customer experience. Retailers are partnering with e-commerce brands to sell previously online-only merchandise in stores. For the customer experience, retailers will treat the store less as a point of sale (POS) and more as a place to stage memorable events.
Social — Social media is increasingly part of the buying journey. E-commerce shoppers say their buying behavior is influenced by social media reviews and comments (45 percent), promotional offers (44 percent) and ads (30 percent).2 But the social-media universe is constantly changing. For example, while millennials were the first social-media denizens, Gen Xers now spend 40 more minutes per week on social media.3
Learn more about retail channels.
Driver 3: From DX to CX
IDC refers to the application of digital technologies as digital transformation (DX).4 For retail, the goal of DX is largely to improve the customer experience (CX). Which investments will move the DX-to-CX needle?
Digital signage — On shelves, electronic labeling can replace time-consuming paper labels with digital displays of product information and pricing. In storefronts, digital signage is becoming table stakes, replacing printed promotional posters.
Beacons — Beacons are small, inexpensive devices that can be attached to walls and shelves in retail locations to interact with apps on consumer smartphones. Beacons are already influencing billions of dollars of retail sales.5
Virtual reality (VR) — From smart mirrors in dressing rooms that let consumers virtually try on clothing, to headsets that let them experience travel destinations, VR is helping retailers better engage customers.
Artificial intelligence (AI) — AI gives retailers new insights into consumers. Across industries, AI spending will leap from $8 billion in 2016 to $47 billion in 2020. Industries that will invest the most in AI include retail and banking, following by healthcare and discrete manufacturing.6
Learn more about leveraging DX for better CX.
Driver 4: Retail Internet of Things (IoT) Convergence
Convergence 1.0 combined IT systems with telecom for more effective networks and tremendous cost savings. Convergence 2.0 is about the integration of IoT data, and it will be just as transformational.
Retailers can use IoT technology to measure how many people visit the store, how they move through the store, which products they interact with on the shelves and which products they buy. They can also use IoT sensors and controllers to manage space utilization and environmental issues. They can cross-reference that data with customer activity to understand how those factors affect buying behavior.
But to deliver the most value, IoT data needs to be combined in a common platform where it can be harmonized, analyzed and made available in a way that’s relevant to sales associates, store managers, back-office end users and even customers. To realize the full potential of IoT to improve operations, lower costs and deliver an omnichannel customer experience, retailers will have to embrace Convergence 2.0.
Learn more about IoT convergence in retail.
Driver 5: Cloud Computing for Retail
The retail industry was slow to adopt cloud computing because of concerns around relinquishing control of customer information and POS data. But today, as cloud providers address security issues, retailers are moving workloads to the cloud in a big way.
Whether you choose a public cloud, a private cloud, a hosted private cloud or some hybrid approach will depend on your risk profile and individual workloads. For example, elastic workloads that scale up or down rapidly may be well-suited to a public cloud. On the other hand, risk-averse retailers will feel more comfortable managing sensitive data in a private cloud.
Regardless of the provider you select, you need to understand the underlying infrastructure and the nuances of the cloud provider’s offerings to be sure they can meet your needs. One provider might be better suited to housing data you don’t want to physically leave the United States to meet data-residency requirements. Another provider might be better equipped to meet security and audit requirements.
Many retailers begin by offloading messaging and collaboration software to the cloud. They then look at moving more sensitive data, such as POS transactions, and more complex processes, such as omnichannel capabilities.
Learn more about cloud computing for retail.
Driver 6: Retail-IT Innovation
Regardless of the innovation you’re pursuing, you need an innovation management framework that gives you a rigorous way to:
- Assess how well existing IT supports your desired business outcomes.
- Establish the baseline of your current environment.
- Determine your desired future state.
- Identify the gaps between your current IT support and where you need it to be.
Start by interviewing business-unit owners to find out what they’re trying to achieve. Then you can identify the technology requirements needed to support those goals.
Next, develop an innovation roadmap. Your roadmap documents how you will achieve the desired innovation. It also increases the likelihood your innovation projects are implemented on time and within budget. Most important, it helps you make sure you achieve the anticipated value.
Learn more about retail-IT innovation.
1 “Smartphones Overtake Computers as Top E-Commerce Traffic Source,” Bloomberg Technology, July 2016
2 “How Social Media Influences Shopping Behavior,” eMarketer, March 2016
3 “Middle-Aged Americans Beat Millennials in Time Spent on Social Media,” Bloomberg, January 2017
4 “IDC Sees the Dawn of the DX Economy and the Rise of the Digital-Native Enterprise,” IDC, November 2016
5 “Why the CPG Category Is Poised to Become an Early Leader in Beacon-based Marketing,” Business Insider, May 2016
6 “Worldwide Cognitive Systems and Artificial Intelligence Revenues Forecast to Surge Past $47 Billion in 2020,” IDC, October 2016
CompuCom® is a registered trademark of CompuCom Systems, Inc.
Bloomberg® is a registered trademark of Bloomberg Finance LP., and is used by permission.
IDC® is a registered trademark of International Data Group, Inc.
All data cited in this article is used by permission.