Retailers are looking for gold, trying to implement technology that can create new profits and achieve operational efficiencies.
Information from vendors, analysts, consultants and the media is everywhere – but it is hard to make sense of it all. As well as talking to a lot of retailers, and the analyst community, my colleagues and I do a lot of reading and believe we have found common threads in terms of things that retailers are looking for from their technology.
There appears to be clear consistency and commonality to what they are saying. It’s very simple - retailers want just three things from their technology: insight, efficiency and smart response.
So what does this actually mean?
- Insight – a clear, consistent, understanding of their own business, its operations, customers, products.
According to the World Economic Forum, the future of retail will be built on insights derived from data – in particular, consumer data. This data will not only come from systems within the business but in the near future it will come from Internet of Things enabled sensors and technologies.
“Businesses must act now to reap the rewards of the consumer data gold rush by moving from simply collecting consumer data to using it to support, scale and systematize better decision-making,” said WEF in its Future of Retail Insight Report.
Stores need digitalized, personalized, omni-channel experiences that meet and exceed customer expectations. Clear inventory visibility is an important example of this and appears on the agendas of many of the conversations Software AG have with our customers.
- Efficiency – the elimination of waste and the automation of complex processes that are supported by systems and people within the business.
Although 67% of retailers consider business operations efficiency to be highly important, only 27% consider themselves able to manage this well. This alarming statistic comes from a study of digital industry strategies by Forrester Consulting, commissioned by Software AG.
Fast, efficient processing of orders and returns, cost efficiencies, streamlining processes – all of these can add to the bottom line. A Barclays report noted that Amazon may be able to break even sooner in its budding grocery business by using automation to improve efficiencies. “Automation could significantly reduce labor costs, driving massive improvements to fulfillment and delivery efficiency overnight," said a Barclays report.
- Smart Response – the need to automatically respond to what is taking place within the business.
Smart response primarily means two things. It is about taking advantage of technologies such as predictive analytics and artificial intelligence to respond to business events – be these driven by customer or other factors – in an intelligent manner. But more than this, it is about responding in a timely manner.
“It is about using computers where it makes sense; in gathering and analyzing huge amounts of data, then testing and refining the merchandising response in real time,” said IT Portal.
But, even though 63% of retailers consider the ability respond in real-time to risks & opportunities to be of high or critical importance, only 25% consider themselves able achieve this, according to the Forrester report.
So, if there are just three things retailers need (or want) from their technologies, the next question is how can these be delivered? From our perspective there are four very clear steps retailers need to take which I will outline in the next couple of weeks.
For more information on how Software AG’s are helping the world’s most successful retailers Digitally Transform, please visit www.SoftwareAG.com/retail.