Can Technology Truly Deliver On The Business Front?
Visual Merchandising and Retail Design|November 2020
That technology will increasingly become an indispensable part of retail operations and experience is a no-brainer. But what does it really mean for the retail business, especially at a time when a global pandemic has ushered in never before economic challenges and caused further squeeze on margins? Well, contrary to what one might imagine, investing in cutting edge technologies in retail, particularly front-end retail, is not about having futuristic, jazzy and cool stuff inside the stores. On the other hand it’s about being well integrated across all aspects - the store layout and design, VM, lighting, fit-outs, staff performance, inventory, customer interactions and the overall store operations. And all this in a manner that delivers a smooth and seamless shopper experience leading to higher store stickiness and sales. It also means allocating budgets and resources in a way that technology becomes an integral part of all the business processes. Here’s a look.

A Mckinsey report released last year called ‘Automation in retail: An Executive overview for getting ready’ unequivocally lists out four current ‘retail realities’:

  • Margin pressure has made automation mandatory and no longer a choice.

  • In most cases, the challenges in automation are to do with internal issues with the retailer, rather than external reasons like lack of right solutions. According to the report, one of the key issues found is that about 90% of the surveyed retail companies simply followed the same old budget allocation cycles, whereas integrating technology would mean a fresh way of planning budgets and allocating resources to different business units.

  • Without automation a retailer can easily slip behind; the report cites enough examples to reiterate this.

  • Automation is not just about operations. As the report points out, the automation opportunity is bigger than operations, and it equally involves merchandising and supply chain functions. It also shows that with the right planning systems, tools and automated analytics, retailers can significantly reduce the time spent on merchandise planning.

Well, the above report was released last year and all of it may not strictly apply in the Indian context. Still, given that the pandemic has this year transformed many things across the spectrum, much of what the report highlights holds greater relevance now.

Fact is that stores, even brick and mortar ones, will inevitably follow the path taken by all other aspects of our life, namely the ‘smart’ path. And ‘Smart’ today connotes anything that’s connected and delivers on speed and efficiency, an imperative today when business pressures are mounting and shoppers are increasingly counting on technology to deliver on the safety and efficiency front. In fact, a new report commissioned this year by Mckinsey’s Periscope, a suit of marketing and sales analytical solutions, also shows that tech driven consumers are redefining retail’s next normal.

But interestingly, even when consumers are not digitally or technologically savvy, their key expectations from retail brand are those that necessitate the greater integration of technology - safety and hygiene, contactless/socially distanced shopping experience, easy check-out, speed and efficiency of delivery, etc.

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