Over the past few years, technology has been a disruptive element in every industry in the economy. The retail industry is no exception. We don’t need to think long to list the different ways in which technology has had an impact on our lives in the various roles we play – as professionals, as parents, as educators, and as consumers. As consumers, the truth is that technology has been the real instigator of changes to our habits and our preferences regarding what we consume and how we consume it. It has also been a determinant in how we relate to the different brands with which we interact throughout our lives.
In addition to technology, other factors have disrupted the retail industry; namely the change in consumer behaviour, the growth of e-commerce and, more recently, the global pandemic that we’re currently experiencing. Throughout this pandemic and successive lockdowns, new challenges arose for the industry. When you think that only pharmacies, supermarkets and other essential shops were open during lockdowns, this meant that retailers had to quickly adapt and reorganise, or risk not surviving these challenging times.
Online shopping became the obvious choice for consumers confined to their homes, unable to visit the shops where they were used to buying many products. This resulted in a dramatic explosion in e-commerce activity, which, according to a United Nations article, went from 16% of all retail sales to 19% in 2020. Nevertheless, many retailers, including the Irish giant Primark, did not even have the digital channels to continue their operations while their physical shops were closed. Others did have digital channels (a mobile app or an online store), but the accelerated increase in online sales ended up exposing vulnerabilities that weren’t previously noticeable: difficulty processing orders, systems that weren’t versatile or agile, information dispersed across different organisational systems, and lack of agility throughout the supply chain, among others.
As we can see, the challenges retailers face nowadays are manifold. Technology can help answer many of them, however, allowing organisations to restructure business models and optimise operations, whether internally or externally. Several technologies are currently contributing to innovation within the sector: Business Intelligence, Big Data, Augmented Reality, Artificial Intelligence (AI), and automation, among others.
For instance, Artificial Intelligence (AI) is a crucial technology for improving different processes in the sector. It has several use cases: implementing a chatbot for customer support, optimising the delivery process, building more digital, cashier-less stores, stock control, and more. Another of the most prevalent technologies for this sector is automation. Automation is another technology that offers several use cases and has many benefits: using RPA (robotic process automation), it is possible to automate different internal processes, such as delivery information, order invoicing, product categorisation, campaign planning and even returns. Both technologies can help revolutionise many of the processes that are still dependent on human interventions. As such, they are crucial to generating internal efficiencies that, in turn, have a visible impact on customer experience and satisfaction. According to a McKinsey study, 50% of activities in this sector have the potential for automation using technology that we already have available, such as AI and automation. This means there are still many processes that can be transformed, improved and optimised. The important thing will be identifying specific use cases where technology can make the most significant difference and starting there.
Retailers are under enormous pressure to adjust to the market and the consumers they serve quickly. They constantly need to find ways to innovate, using technology to revise their business models, and ultimately, reinvent themselves, becoming more resilient businesses capable of weathering abrupt and unexpected change.
As technology experts, Xpand IT can help you explore how you can use technology – via its different applications – to address the challenges you’re currently facing.