The modern-day retail environment is anything but stagnant. With a rise in e-commerce shopping and delivery, consumers’ desire for efficiency and convenience reigns supreme. With this, traditional brick-and-mortar retailers cannot rely solely on historical insights to guide them through the next phase of buying and selling. SAP’s recent study, conducted by leading industry analyst Forrester Consulting, highlights retailers’ desire to not only undergo digital transformation, but also adopt technologies that allow them to keep up with market innovation and, ultimately, provide competitive edge.
A Redesigned Retail Experience
The path-to-purchase for consumers isn't what it was years ago. Consumers no longer plan a trip to local malls to be guided by employees in their search for products. On the contrary, shoppers have become spoiled with the ease and efficiency of at-home browsing and purchasing with the click of a button. Store employees have been replaced with chatbots, which can answer questions at the drop of a “ping.” Because of this, consumers crave instant gratification, seeking immediate answers and options, which retailers can accomplish through the implementation of digital technology.
Driving the Path to Digital
To gauge the status of the retail industry’s transformation, SAP commissioned a study in January 2019, assessing enterprise adoption of intelligent technologies to support the digital transformation journey. The research examined companies that were actively undergoing digital transformation and had already implemented at least two innovation technologies, including machine learning (ML), artificial intelligence (AI), the Internet of Things (IoT), blockchain, and augmented or virtual reality (AR or VR). According to our results, 93 percent of companies believe that intelligent, innovative technologies are foundational to digital transformation success.
For retailers that have begun their transformation journey, over 90 percent feel prepared for innovation across their strategy, people, culture and technology. Additionally, 94 percent of them have already implemented, or plan to implement, IoT technology. This is followed by machine learning technology, at 81 percent. This tells us that companies feel confident in their adoption of new technologies and that their employees feel prepared to execute on new processes.
Meeting Consumer Expectations
Retailers are prioritizing digital initiatives, including customer centricity, smart retail technology and personalized service, as they work to parallel the personalized one-to-one connection that can be formed between shoppers and products in the brick-and-mortar retail experience. Based on survey results and business goals, retailers tend to be largely focused on using big data and predictive analytics to make decisions on product assortment. With this data, they're better able to serve their customers’ needs by connecting location and market data with transaction history and loyalty status data, and then using those insights to provide intelligent recommendations.
Retailers currently have a number of in-store technologies in place, with many planning to implement additional tech in the future. Over 80 percent of those surveyed already have data-driven assortments, automated and optimized pricing and promotions, as well as digitally tracked items. Over 75 percent have already implemented smart store technology, which allows in-store buying processes to be more efficient and tailor-made to the customer.
To ensure that this technology is being implemented properly, companies look to platforms to address their challenges. Almost 90 percent seek a platform that enables scalable intelligent technology deployment, unifies data collected and used by intelligent technology for business processes, and embeds technologies in business solution software. Users expect these platforms will provide them with easier and more streamlined information sharing to address today’s customer needs and provide the best quality shopping experience.
To implement a successful digital transformation journey, retailers must understand their goals and needs. Before implementing intelligent technologies, it's critical to understand and outline how these technologies are expected and desired to support and strengthen business processes. Ultimately, as the modern-day retail environment continues to shift, technology is the key to keeping up with the competition and keeping customers happy.
Lori Mitchell-Keller is co-president at SAP Industries, a software and technology solutions provider.
Related story: 2019 Retail Technology Report