Predicting 2023: Knowing When to Invest and When to Save

By Michael Jaszczyk

CEO, GK Americas

The last few years have been challenging to say the least. Money was tight, supply chains were tumultuous, and labor was in short supply. Yet, 2022 still led to strong sales including a record-breaking $9 billion spent online on Black Friday alone.

The ups and downs of 2022 may be mirrored in 2023, but this time retailers won’t be rocked by the waves. Retailers have been studying customer behavior for years and cautiously altering their strategies and technologies accordingly. In 2023, however, these retailers are ready to take a leap of faith and invest in the tools that can increase adaptability, efficiency and profits.

The way retailers react to disruption will change next year, and with the right technology, they will be better for it. Here’s how.

The retailers that prioritize strategic pricing, organizational efficiency and great customer experiences will reach new heights in 2023 and position themselves well for the future.

Michael Jaszczyk is the CEO of GK Americas, where he works to maintain and enhance the company’s global reputation as the supplier of one of the most innovative and complete retail software platforms and suite of services. GK provides a future-proof foundation to support retailers’ customer engagement strategies. Jaszcyzk has been a part of GK for more than 12 years, previously serving as CTO.

He draws on an extensive wealth of experience, both in software development for the retail sector and as a manager at international IT companies, including MCRL AG, Pironet AG and SA2 Retail AG.

Consumers and Retailers Will Prioritize The Right Price

Supply chain optimization will continue to be a key conversation in 2023, especially as it pertains to unique ways to lower the cost of logistics. Procurement is just as important, if not more important than sales, because without efficient and effective procurement methods, retailers won’t have the products they need to meet customer demand.

Retailers will look to cut costs elsewhere throughout the supply chain. For example, retailers could try direct store delivery. This is when the manufacturer delivers products to the individual store, and sometimes, even stock the shelves for the retailer. By enacting direct store delivery and minimizing excessive logistics costs, retailers can optimize the stocking process and keep prices stable for shoppers.

Retailers Will Take the Leap Into New Investments

With three years of unpredictability as a backdrop, retailers spent much of 2023 striving to stay afloat and prepare for disruption. For many, this meant cautiously making minor software and architectural changes to meet customer demand.

But now, retailers have been able to ground themselves in customer data and accept the ongoing disruption. As a result, these retailers are ready to try new technology to futureproof their businesses.

In fact, many retailers will take a big leap when it comes to technology investments in 2023. For example, retailers may no longer be interested in buying a single point-of-sale (POS) system that meets most of their needs. Instead, they will invest in a POS architecture that allows them to pick and choose the capabilities they need and design the front-end customer experience specifically for their customers.

Seamless, Efficient Journeys Won’t Go Out of Style

Retail trends come and go but one theme has remained constant – customers expect convenience. Any technology that simplifies the customer journey will engage savvy shoppers this year. For example, self-checkout technology – whether it’s a traditional kiosk, a scan-and-go solution or scanless technology – will grow in popularity in 2023.

Retailers have begun experimenting with scanless checkout in recent years, particularly as stores became increasingly understaffed during the labor shortage. For many, this experimentation took place in small pop-up stores or within one section of a store. But in 2023, this will expand to a wider percent of the store footprint.

Scanless technology is just one way that retailers can create efficient in-store journeys. They can also move to accept alternative payment methods. This will not only create more payment options for shoppers, but it will also help retailers reduce credit card network and transfer fees.

How To Stand Out in 2023

It’s time to put the learnings of the last few years to the test. In 2023, retailers need to take a leap of faith and turn their customer data into action with new technology. The retailers that prioritize strategic pricing, organizational efficiency and great customer experiences will reach new heights in 2023 and position themselves well for the future.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31

Calling Retailers to Re-Invent: The Future of Brick and Mortar is Here Now

By Will Glaser, Founder & CEO, Grabango

Will Glaser, Founder & CEO, Grabango

Will Glaser is the founder and CEO of Grabango, the leading provider of checkout-free technology for existing, large-scale store chains. A modern-day pioneer at creating impactful, user-centric solutions in data-intensive industries, Will has been recognized as a technology leader in Silicon Valley for the past two decades.

Prior to Grabango, Will co-founded Pandora Media and served as its CTO and COO during the first five years of the company's history. The technology Will built at Pandora became the first machine learning algorithm ever deployed on a large consumer scale. Additionally, Will co-founded Hydra Systems, where he served as its vice president of engineering. In addition, Will owned and operated a technology consulting business specializing in new product architectures and technology turnarounds, with clients ranging from pre-IPO start-ups to multinational corporations such as Hewlett Packard.

Will currently serves on the board of Blue Shield of California and Berkeley Earth. He was previously the board chair of The Boyer House Foundation. Will was named as one of the 100 most influential people in high technology for his work at Hydra Systems. He earned his Bachelor of Arts and Sciences from Cornell University with a triple major in Computer Science, Mathematics and Physics. He currently lives in Berkeley, CA, where Grabango is headquartered

2023 will be the year of the store. Despite continued growth in e-commerce, the store is more important than ever for driving sales, cementing shopper loyalty and powering omni-channel shopping behavior. With the surge in e-commerce use during the pandemic having receded, brick-and-mortar shopping accounts for over 90 percent of US grocery sales and the figure is likely even higher for convenience stores. But the store cannot stay the same. I see retailers investing in three critical areas of in-store innovation in 2023 and beyond:

2023 will be the year that checkout-free shopping technology goes mainstream as more and more retailers deploy the technology across chains and regions. The mature checkout-free systems use computer vision to automatically add items to a shopper’s bill. At checkout, all that's left is to pay and go, eliminating the greatest friction point in the shopping experience. Checkout-free provides a fundamentally better experience than self-checkout and scan-and-go, two technologies that have struggled to gain retailer and shopper adoption despite decades of trying. As consumers prioritize convenience, we will see checkout-free become a routine part of many shoppers' daily routines. Moreover, in addition to driving increased trips and revenue, checkout-free technology eliminates shrink and provides new insights that retailers can use to optimize store performance.

Checkout-Free Shopping

The need of the hour for retailers is to re-think the store experience and invest in store automation and checkout-free shopping.

E-Commerce & Store Automation

Enhanced In-Store Experiences

Grocery and c-store retailers are increasingly using the store as fulfillment hubs for e-commerce orders. Automation is critical to making online grocery profitable. For example, retailers are using robotic fulfillment centers, including smaller micro-fulfillment centers and larger customer fulfillment centers, to sharply increase pick volumes; they are also investing in artificial intelligence, augmented reality and other technologies to optimize in-store picking. In addition, the same cameras we use to power checkout-free shopping also track out-of-stock rates so that retailers can keep shelves full and reduce the high substitution rates that plague online grocery shopping. Computer vision also identifies opportunities to redesign in-store picking and store flow to increase retailer ROI while improving the pickup experience for shoppers.

As they automate the store, retailers have an opportunity to dramatically rethink the in-store experience. By automating checkout, retailers can free up space and labor to offer cooking classes, nutrition services, product demos, and other value-added services. Computer vision also provides deeper insights into how customers shop the store (which has been a black box until now). Retailers can use this data to improve assortment planning, in-store marketing and digital signage, and to optimize the overall shopping flow.

Retailers need to re-think the store experience as technologies such as checkout-free shopping go mainstream. Many retailers are on this path already, but those choosing to wait-and-see are effectively choosing to be left behind. The good news is by selecting the right partners and deploying the right technology, retailers can deliver both increased revenue and improved margins. The future is here now.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31

Beyond Frictionless: Meaningful Brand Interactions

By Diane Palmquist, CEO, Flooid

Diane Palmquist, CEO, Flooid

Diane joined Flooid in 2020 with 25 years experience working with enterprise retail clients with a focus on ERP, Supply Chain and Master Data Management at companies such as SAP, Infor, GT Nexus and others. Diane brings global experience in selling and delivering platforms and products into complex ecosystems.

The year 2022 brought customers back into stores signifying the importance of brand loyalty and profitability. While shoppers were looking for frictionless experiences during the pandemic, now the trend is shifting toward convenient, meaningful brand interactions. Retailers who cannot keep up with the trend will find it difficult to grow or even to retain market share.

Brick and mortar stores are the heart of brand experience: The pandemic had consumers shunning face-to-face encounters and shopping turned to click and collect or online journeys. These days consumers are looking to complement those convenient shopping methods with more meaningful engagements. The store is at the center of these experiences. Well organized stores with empowered and knowledgeable staff encourage shopper loyalty.

Personalization: The creation of personalized experiences both online and in the store is another important way to nurture consumer loyalty. Expect to see retailers offer new or improved loyalty programs, special personalized offers, easier returns and regional targeted promotions linked to localized buying patterns.

Profitability: There have been thousands of store closures in the last three years. This will continue in 2023 as consumers demand more brand value from each journey. Retailers who don’t deliver on an excellent brand promise will not be profitable due to misalignment of inventory selection or unsatisfactory store experiences. This, in turn, will drive lower prices and higher inventory carrying costs. Ultimately these failures are predicted to drive more store closures in the coming year. The opposite is also true. Retailers that successfully deliver on their brand promise to delight consumers will thrive both in store and online.

Digitalization and Technology: Technology investments are crucial and wise strategies should be employed. All technology decisions should be evaluated and prioritized based on the direct value to the consumer. Consumers value modern ways of purchasing, a consistent omnichannel experience and convenience. That translates to a composable commerce strategy enabling shopping journeys such as cashierless consumer mobile checkout, self-scan checkouts, buy online - return to store, buy now/pay later (BNPL) payment options, associate-driven clienteling and more. All of these are technologies that have a high experiential value to a consumer and promote brand stickiness. A technology platform built upon a composable commerce structure, allowing retailers the flexibility to change technologies and technology partners as markets evolve is an essential component of this strategy.

Shoppers were looking for frictionless experiences during the pandemic. Now the trend is shifting toward convenient, meaningful brand interactions. Retailers need to keep up with the trend to grow and retain market share.

Loss Prevention: Inventory shrink (shoplifting) is one of the key drivers behind loss of gross margin for retailers. Target predicted that 2022 will reflect an unexpected additional $600 million loss in gross profit over 2021 due to theft and similar losses are being predicted by other retailers in not only the grocery sector, but across all other sectors, regardless of geography. This is not sustainable for retailers that have already seen heavy losses due to the pandemic. Technologies that assist retailers in the reduction of shrink will see an upswing in adoption in 2023. Facial recognition on video surveillance, AI to identify suspicious transactions and anti-theft tags that are tracked are just a few of the technologies that will surge. Excellent store operational practices also reduce loss. Retailers with stores that are well organized with empowered and knowledgeable staff have less shoplifting. This also increases brand satisfaction resulting in a win/win.

In closing, retailers need to invest in technologies and solutions that support an excellent consumer experience to deliver on their brand promise. They will be the winners in 2023.

The State of the Retail Industry 2023

JAN 2023

07/05/2024 15:52:31