Preparing for Tomorrow: Three Trends Shaping Retail in 2023

By Ellen Brune, Head of Global Strategic Accounts, AutoStore

Ellen Brune is Head of Global Strategic Accounts at AutoStore, the world’s leading warehouse automation company. Prior to joining AutoStore, she served as GM – Integrated Storage Solutions, Intelligrated at Honeywell and Director – Emerging Technologies and Product at Walmart. She holds a PhD in Chemical Engineering from the University of Arkansas.

The past few years have proven to be volatile on several fronts in the retail sector, from the pandemic to the ever rising cost of everyday items. This trend is expected to continue into 2023, signaling that now is the time for retailers to prepare for how to best serve consumers in the coming year.

In 2022, we witnessed a continued ramp-up of online buying by consumers who have become accustomed to receiving goods delivered either directly to their doorsteps or available for curbside pickup – a fact that is especially true for grocery. According to the United States Census Bureau, quarter three of this year saw a 10.8% increase in e-commerce sales over the third quarter of 2021.

Despite the popularity of online shopping, retailers would be remiss to put all their eggs in the e-commerce basket. Consumers want choices; more than that, they want an experience. If retail is to thrive in the coming year, a fundamental mindset shift is required, otherwise buyers will take their shopping elsewhere.

In 2023, e-commerce will remain a core component of market strategy, while retailers will need to emphasize in-store experiences and how to resolve last-mile obstacles.

1. Online is Here to Stay

If there is one thing we learned from the pandemic, it is that online shopping is a viable and crucial component of any company's market strategy. While COVID-19 accelerated e-commerce's rate of adoption, it is clear that online shopping is here to stay.

Consumers have become comfortable navigating the digital environment to acquire a broad range of products, whether it's a new pair of shoes or grocery list items. Now that this shift in buyer behavior has occurred, it will be impossible to reverse it. This means retailers must rethink their approach to e-commerce as a long-term element of their business strategy. Those who fail to adapt and implement core infrastructure to support e-commerce now will quickly fall behind in winning and retaining customers.

2. Retailers Need to Rethink In-Store Experiences

Although e-commerce is not going away, neither are brick-and-mortar facilities. Both platforms are important for attracting and maintaining customers. There is no "one size fits all" shopper. Retailers must realize that the consumers of tomorrow are omni-shoppers, meaning they will expect exceptional service both online and in-store.

Stores will have to give customers a reason to come into their physical locations. Simply having a product in stock is no longer sufficient. Because of that, retailers will benefit if they can get creative about how they service customers in-store and what experiences they intend to offer.

3. The Last-Mile Puzzle Remains

The last mile has long been a pain point for logistics operations, but the pressure to find the best solution for closing the gap between customer and product will become even greater.

In-store experiences that bring customers directly to a facility easily eliminate the delivery issue. For those shopping online, however, retailers must determine a winning strategy to successfully bring products to doorsteps.

There is no clear answer to this problem. Whether it’s deploying drones, hiring gig drivers, or perhaps implementing driverless technologies, retailers will need to select the right option(s) to ensure fast, reliable delivery to customers.

E-commerce will take its place as a permanent component of market strategy, but customers will be watching to see which retailers come forward with compelling reasons for them to travel to physical store locations.

Summary

As we look to 2023, it will be those who heed the lessons of years past who will find success. E-commerce will take its place as a permanent component of market strategy, but customers will be watching to see which retailers come forward with compelling reasons for them to travel to physical store locations. Despite all this, solving last-mile transportation will remain crucial. It will be intriguing to see how organizations will adapt.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31

2023: A Year of Smart Technology

By Jamal Khan, Chief Growth and Innovation Officer, Connection

As Chief Growth and Innovation Officer, Jamal Khan is responsible for designing and effectively executing strategies to increase innovation and growth at Connection. Khan joined Connection through the company’s 2016 acquisition of GlobalServe Inc., where he served as Chief Executive Officer. Prior to GlobalServe, Khan worked in leadership capacities at Instinet, VeriSign, Arpatech, and Merck Medco.

As a leader with two decades of broad spectrum experience, from core technology and sales to marketing and operational P&L management, Khan has nurtured and developed high-performance organizations through the adherence of operating principles garnered and developed over years of multi-disciplinary senior management roles. Khan’s skills are ideally suited for bringing technology solutions and products to market, as well as leading ongoing operations that require strategic alignment, turnaround, or positioning for breakout performance.

Khan is an industry expert with years of engineering expertise in the areas of Trading Systems, eCommerce, and Cyber Security. He is a Guest Lecturer at Columbia University’s Graduate School of Business, on the subject of Artificial Intelligence. He is also an inventor of six approved patents related to human-machine interface design, data orchestration, and machine learning, and has been actively involved in technology startups as both an investor and mentor.

The retail industry has seen more disruption and greater transformation over the last three years than the last thirty years combined. Every retailer—big or small—has been forced to rethink the customer experience and develop a laser-sharp understanding of where, why, and how their brand drives engagement. Maximizing profitability remains a key priority, but retailers who can develop a more insightful understanding of customer behavior—earned through consistent, focused efforts across omnichannel touchpoints—will identify smarter growth strategies and find sure footing on the path ahead.

Looking to 2023, there has never been a more clear-cut need for innovation in the retail space, or greater value to be found in technology’s ability to deliver on that promise. Smart retailers will focus on three critical areas that complement the customer experience, improve productivity and employee satisfaction, and highlight brand value in an increasingly competitive marketplace.

Smart Store Technologies

You’ve already adopted smart technologies in your home—cameras, thermostats, coffeemakers, and refrigerators that deliver greater savings, efficiency, and convenience. These technologies will enhance your business in the same way they improve your personal life. Embracing smart store technologies such as AI, Edge Computing, IoT, or Computer Vision will improve worker productivity while providing customers with an experience that amazes. Imagine in-store displays with AI-enabled cameras that allow you to present two unique experiences: one for a busy parent with five children in tow and one for a solitary, leisurely shopper. Or consider a device that not only spots empty shelves and creates a pick list with suggested alternative products but also anticipates future stock-out based on sales velocity—helping you avoid subpar shopping experiences. Smart store technologies do all this and more, with endless business applications to improve the customer experience and employee productivity.

Point-of-Sale and Payment Solutions

When today’s consumers are ready to purchase, they expect to have multiple payment options, including tap and mobile pay. Yet most POS systems in use are incompatible with these offerings. Any POS or payment device more than five years old is already a relic and can’t support the omnichannel integration your customers crave. The new generation of wage earners, Gen Z, don’t always carry credit cards—and if they do, they’ll avoid putting them into a card reader for security reasons. Successful retailers will update POS and payment systems to integrate with omnichannel business, enhance the customer experience, and reduce security risk—while short-sighted organizations will alienate customers and increase security exposure by relying on outdated tech.

Your customers and employees have provided clear insight into winning strategies. Listen to them.

Digital Signage and Marketing

Bringing It All Together

Customers don’t just want a secure, convenient shopping experience. They expect interaction tailored to their unique needs and habits—including the digital signage inside your store. This is a constant challenge for marketing teams, but the right combination of smart store technologies, content management systems, and traditional displays provides amazing outcomes. The creation of hyper-personalized messages to the right shopper, at the right time, can drive exponential returns—strengthening both your sales and your brand.

The most important step in any plan is the first step. Start your journey by developing a multi-year roadmap inclusive of the entire organizational vision. The design of your technology roadmap against your specific business challenges is critical to customer experience and employee productivity.

Having the right roadmap in place—and the technology to make the most of your existing investments—will help you adapt to changing markets, augment your workforce, and deliver an unparalleled customer experience in 2023 and beyond. Your customers and employees have provided clear insight into winning strategies. Listen to them. Smart technologies deployed by smart retailers provide amazing results.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31

Retail Tech Investment Priorities for 2023

By John Pruban, President, Level 10

John Pruban’s leadership in the retail IT services industry started over 30 years ago when after acquiring the assets of R2 Corporation he began tekservePOS, a business focused on POS hardware procurement. Technology advancements quickly made the marketplace evolve and retail IT professionals were challenged to do more with less. As such, tekservePOS evolved into Level 10 and is now committed to increasing its value to its customers with a full range of value added services to support their procurement, deployment and maintenance of their IT solutions. John leads the organization as its President and ESOP Board Chairman.

It’s no secret that there is more technology in stores than ever before. The number of devices in stores and the pace at which retailers have been deploying them has increased rapidly in the past two years alone.

Consumers have come to expect digitized shopping experiences, and demand for omnichannel and hybrid purchasing – from BOPIS and curbside pickup to in-store kiosks and digital displays – continues to grow. To remain competitive, retailers must invest in new technology and tech infrastructure.

I’ve had a front row seat to the expansions and quick pivots in retailers’ technology roadmaps as they respond to shifting consumer behavior. Based on my experience with major retail clients, winning retailers are prioritizing the following technology investments in 2023 and beyond.

Network Refreshes and Upgrades

For starters, almost every IT initiative a retailer is taking on will drive the need for greater networking capability. With huge pushes for virtualization, greater advertising and communication needs, and ongoing cross-channel initiatives, retailers must invest in updated network infrastructure to ensure they can support the growing number of devices in stores.

New Stores and Store Reformatting

Despite conventional thinking as of late, retailers continue to open new stores at a strong level. That said, perhaps even more popular is store reformatting overall. While historically we’ve seen retailers more commonly downsizing square footage, a newer trend is increasing store square footage to support more experiential-based concepts. Whether new stores or reformatting existing stores, technology deployments in these areas are a priority as consumers demand modernized locations.

Mobile

Both retailers and restaurants continue to enhance their mobile technology stack. Initially, the mobile explosion we saw was in the restaurant space with mobile ordering and drive-thru projects. Currently and into 2023, mobile is taking shape in all things POS-related as well as refreshes and upgrades of existing mobile computers.

Another key driver of mobile investment for retailers is supply chain and asset management. The proliferation of BOPIS and curbside pickup and importance of inventory accuracy has driven an even greater need for mobile devices for store team members.

Remote Workforce Management and Support

While the office recovery debate rages on, retailers are forced to support more remote workers than ever before. From our perspective, the management of laptops and other equipment in the addition and/or subtraction of remote employees is a newer and very robust product opportunity that wasn’t present just a few years ago. This will continue in 2023 and beyond while companies work to solve the inherent problems with the asset management associated with this aspect of their support.

Changing consumer behavior has led to more technology in stores than ever before. With an ever-increasing amount of devices in stores, there are more challenges. To stay ahead of the curve, continuous investment in the latest in-store technologies is a must.

New and Refreshed Technologies and Software

Retailers will continue to deploy new technologies at a rapid pace in 2023. As retailers continue uncovering opportunities to establish new channels, grow into new markets, and cater to new audience segments, they are forging new paths toward brick-and-mortar successes. And almost all those new initiatives involve the deployment of new devices or a refresh of existing technology.

There is certainly no end in sight for consumer demand for digital shopping journeys and outstanding customer service, so for retailers who wish to stay ahead of the curve instead of playing catch up, continuous investment in the latest and greatest in-store technologies is a must.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31