The Return of in-person shopping
Retail technology must help retailers hold those trial customers who tried their stores during Covid. Especially the ones who tried their private brands. They want them to become returning loyal customers. For retailers who lost some loyal customers during Covid, technology needs to invite them back. They need to re-build habits to shop their stores and sites regularly again.
Strategically, retailers are reviewing their marketing, operational and IT spending to invest in knitting a single view of customers. Too many retailers had systems prior to Covid that did not recognize a customer as a single entity. A customer was one entity in the POS system. Then another in the promotional system. And another in the services or subscription system. Now, retailers need to recognize the same shopper across all their systems and at every touchpoint. Omnichannel shopping requires it.
Retail Technology Metrics that Matter
Retailers focus more than ever on fill rate, delivery accuracy and reduce food waste or returns in online delivery. Some are moving away from the Instacart shoppers. They believe by managing the end-to-end shopping and delivery service, they can control the shoppers experience. But that will be expensive. So they are offsetting that investment through subscription models. It remains to be seen if that will build closer relationships to retail banners as it is intended to do.
More than ever, retailers learned that their systems and their functional silos need to be more integrated. Stand alone systems (POS, Inventory, Replenishment, WMS) did not synchronize fast enough to give retailers insight and flexibility. Some see value in retail technology that moves toward a single solution platform (ERP-lite) or they will deploy modules to make integrations across systems more quickly.
Another thing that has retail IT attention is enhancing supply chain and logistic insights. Prior to covid there was momentum behind machine learning and AI to optimize pricing and promotional planning and assortment. Then Covid hit and all those plans got tossed out. Retailers scrambled just to cover the basics: Where are my orders? When will they arrive? How quickly can I get them onto the sales floor? When you have to focus on just getting your supply chain right, you recognize gaps usually filled by reliable demand and competent vendors. When vendors hit their limits and couldn’t deliver, retailers saw how fragile their supply chain really was.
What Will Get Funded
It will be hard for any retail technology to get approved if it doesn’t support omnichannel retail. Solutions that focus on e-commerce or brick and mortar alone will be difficult to fit into a retailer’s technology roadmap. Every solution has to demonstrate how it will strengthen and integrate across every channel. Retailers are looking at every technology investment through an omnichannel lens.
There is also a growing understanding, finally, that Software as a Service (SaaS) is a good model for retailers. In the past, retailers relied on implementing their own solutions or customizing off the shelf solutions. They each believed they had unique needs and that owning proprietary solutions would provide a market advantage. What retailers understand now is that building custom IT solutions and maintaining them, makes them slower than SaaS-deployed retailers. So retailers are finally more open to the idea of deploying SaaS solutions. Because SaaS systems are easier to upgrade and keep a retailer more nimble.