Traceability & Sustainability: Key for Traditional Retail to Beat eCommerce Dominance
If 2021 and 2022 saw an uptake in technology adoption in support of the retail sector’s response to Covid-19, we have no doubt in our minds that 2023 is the year for accelerating, future-proofing and resilience-building the sector to ensure that bricks and mortar retailers of all sizes can withstand, and even expand, their operations no matter what challenges this year may bring.
IoT systems for Physical Retail’s Comeback
One thing that should reassure retailers for 2023, is the now-proven impact that advanced technology can have for both the product and customer journey. In a year where every unit of spend, every piece of product, and every transaction matters, an increased embrace of IoT (Internet of Things) to communicate and track data will be a core differentiator for the retailers that succeed in a time of increasing business running costs.
From our perspective, we’re seeing the adoption of smart tag technology, such as RFID, as a critical innovation to ensure that traditional retailers can survive against the domineering rise of e-commerce.
According to McKinsey’s most recent report on the topic, online retailers continue to enjoy markedly higher growth than bricks and mortar retailers (anyone with a physical, consumer-facing store) in almost all categories. Core operational elements of the e-commerce industry, from warehousing to real-time inventory management, have led to the average retail customer’s expectations of accessibility and transparency becoming skewed and unrealistic – when the customer ‘is always right’, this means that accurate communication of product data and inventory is quickly becoming the new norm for every kind of retail store.
Smart tags advancement has allowed the owner of a network with brick-and-mortar to compete with e-commerce retailers like never before. Through this high-tech, data communication technology, retailers now have the capability to accurately track and report on product inventory, further closing the information gap that modern consumers expect from their retail experience.
In short, for 2023 we expect that IoT systems will continue to advance the traditional retail industry to keep up with the technology-enabled warehousing systems utilized by the world’s largest e-commerce businesses. For 2023, we believe that the sharing of best practices in both knowledge and advancement of systems and technology will see retailers in every domain respond to the potential for a bumper year ahead.
Adoption of smart tag technology and a shift towards sustainable practices is critical for traditional retailers to survive the domineering rise of e-commerce.
Sustainability and Credibility
For retailers of all sizes and types, the next big trend for 2023 is a familiar one – Sustainability.
But with each passing year, we’re seeing that consumers and stakeholders across the globe are losing patience with retailers’ empty promises and the challenges of overconsumption. Now, they are demanding far greater levels of detail and transparency on the impact of retail operations on our planet. When we consider one aspect, for example - the carbon emissions of production, transport and product life-cycle - it’s been clear that a lack of operational understanding has been leading to a gap between retailers’ intentions and their actions.
With that in mind, we’re expecting another swell of demand for accurate end-to-end solutions to ensure transparency across the product and operational life cycle, which can be supported through an increasing variety of sustainable solutions, such as paper-based smart tags. The technology reduces carbon emissions significantly, which allows brands to gather a better understanding of their customer, and also supports the recirculation of products – one of the latest trends in the fashion industry.
We know that the retail sector has every interest in securing an equitable and sustainable future for people and the planet, and every shift towards sustainable practices is something that our future generations of retailers and consumers will thank us for in decades to come.
Ricardo Lobo is the President and Chief Executive Officer of Beontag. In this capacity, Ricardo oversees the strategic direction of Beontag in creating value of its distinctive capabilities, innovative portfolio, and customer and stakeholder relationship.
Prior to joining Beontag, Ricardo had more than 11 years of experience in the financial market at BTG Pactual, the largest investment bank of Latin America, leading multiple companies’ business strategy in Private Equity. Early in his career, he served 3 years at Procter&Gamble, being responsible for product strategy, consumer research and product concept and development.
Ricardo Lobo holds a Bachelor degree in Chemical Engineering from The University of Sao Paulo, a Masters from Chimie Paris Tech University and a Business MBA from Harvard University.