In the classic movie "Groundhog Day," Bill Murray experiences the same day repeatedly, beginning with the melody of Sonny and Cher's "I Got You Babe" on his clock radio. Over and over and over again. Many people have noted that the pandemic has turned the last couple of years into an extended Groundhog Day: another covid variant, another day at home, more time away from the things we love.
But as we rounded out 2021 and headed into 2022, things gradually started to change. Especially as we focus on retail. Unlike in 2020, customers felt more comfortable returning to brick-and-mortar stores over the holidays and we saw the marriage of physical and digital storefronts take center stage. In fact, according to IHL, approximately 80% of all retail revenues still have a store fulfillment component. And although retailers are continuing to deal with staffing, COVID, and supply chain challenges, many retailers are overall more optimistic than they have been in months.
This is particularly true for those retailers that focused on digital innovation over the last 24 months; with many being rewarded with increased revenue and loyalty for their efforts. Increased store counts, greater market share, and getting a leg up on the competition; are all benefits of effective technology investments. Of course, those retailers that did not invest and focus in the right areas continued to play catch-up, lagging behind the competition.
According to the IHL’s 2022 Study Retail’s Once-in-a-Generation Tech Reset, last year, despite inflation, COVID, staffing, and supply chain challenges, the retail and hospitality industries demonstrated their resilience. After the battering they received in 2020, retailers’ sales recovered with soft goods (+ 56.8%) and department stores (+ 52.1%) doing particularly well. In a survey of 19,000 consumers by the National Retail Federation and IBM, 72% of respondents said the store is all or part of their primary purchase method, and 27% preferred hybrid shopping. This points to a continued need for technology to enhance the customer experience and serve as a driving force in retail’s continued reinvention.
If the pandemic has taught us anything, it’s that technology can be used to adapt and pivot to unexpected circumstances. In many respects, retail may be ahead of the curve, and other industries, in terms of embracing technology to help them navigate challenges. Perhaps unsurprisingly, business agility and flexibility were common themes at the recent National Retail Federation Big Show in New York City.
To address ongoing supply chain challenges, retailers are looking to embed artificial intelligence and data analytics into their platforms to improve inventory management and sales predictions. Additionally, technology that provides better visibility of the entire customer journey can help retailers make better choices about shipping locations and optimize fulfillment.
Another common theme, retailers continue to cope with staffing challenges. Changes in the labor market are increasing the need to embrace digital channels, cloud, and IoT to create a better work environment for employees, increasing effectiveness and retention.
IoT is extremely important in augmenting staff operations while also becoming more critical to the distribution and warehousing aspect of the supply chain. Many organizations are turning to robotics and automating as many day-to-day processes as possible, in case the labor shortage continues and retailer can't hire enough staff. If a retailer can automate the elements of a process that requires six people, so it only needs three, they can not only alleviate staffing shortages now, but also potentially improve efficiency and effectiveness longer term.
This influx of IoT is not without challenges, or risks. For example, robotics deployed in hotels, restaurants, and retail locations requires robust connectivity to operate effectively. This connectivity also enables the always-on customer experience, enhanced by new digital touchpoints throughout the physical store. Secure SD-WAN has become a necessity to achieving this with LTE/5G connectivity making deployment possible in more places than ever before. Secure SD-Branch ties everything together, providing complete visibility and control over the sprawling network edges.
Historically, technology has been seen as a cost center. A line item on a budget sheet as opposed to a revenue generator. Although the idea of technology being a business driver has been a point of discussion for some time now, the dialogue has started to change. Across all levels of the organization, retailers are looking to technology to create new opportunities to optimize their business, achieve greater revenue share, and increase loyalty from their customers (and employees).
Looking ahead to 2022, retailers are moving forward with new initiatives that focus on the intelligent use of technology. Those that make smart investments in technology will find themselves reaping the benefits and driving their business forward instead of living the same day on repeat or stepping off the curb into the “puddle of irrelevancy.”