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Understanding The Tech Challenges of Retail Giants

With more and more people embracing digital and smart shopping experiences, the retail market is scrambling to adopt new retail technology to remain viable and sustain growth in a rapidly changing landscape.

In this article, we’ll highlight some of the major challenges businesses are facing and the solutions they are looking for. For a more in-depth look at the trends of the retail industry, head over to our Retail Investment 2021 report.

 

Challenge 1: Evolving and Enhancing CX

 

Customer experience is expected to shift even more in 2021 and as consumers become more conscious of their spending, retailers will need to optimize every step of the customer journey to maintain loyalty, and spark growth.

Improving customer journey optimization will involve significant investments in retail technology trends, a key touchpoint of which will be the tech that improves process efficiency such as AI, automation, and customer touchpoints (as well as mapping them out).

A quick view at the core focuses among retail leaders shows that many organizations are prioritizing smart solutions and digital competency to handle customer needs and ensure quality CX.

 
 

What Are They Looking For

 

Improving the experience for customers by delivering fast and accurate responses through CX software which integrates marketing automation, customer service, CRM, CPQ, sales force automation (SFA) solutions, and customer data platform (CDP)

 

Challenge 2: Deciphering The Data

 

Achieving effective customer journey optimization will require targeted investments in retail technology and a high priority tech among retail leaders is data and analytics.

With the influx of data available due to rapid digital transformation, organizations are scrambling to adopt big data and real-time data analytics to better refine their business actions according to customers’ needs and profiles.

As the global big data market is forecasted to be worth $103 billion by 2027, data analytics is no longer just a buzzword, but an important retail technology investment needed for day-to-day efficiency in organizations and individuals.

Given the current talent gap, however, businesses will still look to third-party solutions in terms of building an infrastructure that allows them to utilize data analytics effectively.

 

What Are They Looking For

 

Platforms that implement easy-to-use analytics, data mining, and automated forecasting. Department-specific data such as marketing, sales, and customer analytics will also be a key factor for many businesses.

 

Challenge 3: Digitalizing Stores and Scaling e-Commerce

 

A shift towards improved digital storefront experiences is in line with customer market behavior as globally, 49% of the population is shopping online more now compared to pre-COVID times.

Nevertheless, customers still prefer shopping on-location, with a recent survey done by Shekel showing that 87% of customers prefer to shop in stores, but with touchless or seamless self-checkouts.

As such, improving the infrastructure for businesses’ e-commerce platforms and brick-and-mortar stores has become a race. Those who are able to achieve seamless online shopping experiences and frictionless smart payments will get the lion’s share of the market.

 

What Are They Looking For

 

The ability to transition from an analog business model to a digital, omnichannel model through cloud solutions or optimizing current digital channels such as mobile apps, IoT, and smart shopping.

 

Challenge 4: Improving Digital Security

 

Machine learning and cloud computing continue to be high priorities in tech adoption for retail leaders. Cybersecurity, however, has seen a significant rise due to demands for safer and more secure digital/smart shopping.

The confusion caused by the coronavirus and the massive shift towards digital/remote working has led to cyberattacks becoming frequent with large data breaches increased by 273% in the first quarter of 2020.

 
 

Retailers will face an uphill battle in the “new normal” of post-COVID to assimilate all the necessary digital security strategies, be it upgrading vulnerable software and hardware components or strengthening customer data protection, to ensure customer confidence and loyalty.

However, with the global market for cyber security software expected to grow to $230 billion in 2021, they can expect exponential growth in the practices and solutions for digital security.

 

What Are They Looking For

 

A simplified platform that allows them to reduce security risk through robust privileged access management (PAM) and optimal solutions for customer data storage and protection that comply with GDPR.

 

Overcoming The Challenges

 

At the start of 2021, it’s clear that retail giants are making big investments when it comes to innovative retail technologies. Certain technologies, such as digital transformations, continue to be a major priority for retailers.

The big changes, however, come from renewed interest in improving customer journeys through data analytics and scaling up digital channels via e-commerce or smart shopping experiences.

For any organization, it’s essential to identify which areas of retail technology they are trailing behind, then network with the right solution provider, invest in skilled talents and have the necessary tools to maintain growth in a soon-to-be revitalized industry.

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Business Continuity: How Industries Are Adapting To A Post-COVID-19 World

As countries ease restrictions and lockdowns, organizations are taking strategic steps to recover their business and revenue streams.

From the high adoption of virtual reality by the property industry to the increase of AR in retail, companies are accelerating change in many aspects of their business as part of their business continuity plan.

But first, what is a business continuity plan?

 

The Basics of Business Continuity

Every organization has a framework called business continuity management, or BCM, which identifies potential external and internal threats that can threaten the company.

Consisting of disaster recovery, crisis management, contingency planning and business continuity planning, BCM enables the company to effectively respond to an event and ensure the operation of critical business functions.

Business continuity planning (BCP) outlines protocols and procedures that ensure the continued functionality of the business during and after a crisis.

BCP often gets mixed up with disaster recovery, but the two are quite different. Disaster recovery involves the “recovery or continuation of technology infrastructure, systems and applications” while BCP covers all aspects of the business, including human resources, infrastructure, technology, contracts, and communication.

Designing a business continuity plan requires extensive steps, from business impact analysis and recovery strategies to plan development and testing. For examples of building a BCP, view this template by Sitel or Lumiform’s business continuity plan template for IT.

 

Recovery Steps After The Outbreak

Many businesses are still reeling from the effects of the lockdowns. But most are tackling the challenges by implementing innovative changes, which may become permanent fixtures of their processes.

  • Digital Transformation In The Property Industry

The real estate and property industry faced a big blow due to the coronavirus. Not only were there bans on open houses and limited viewings, there were also less people buying properties due to the economic situation.

“Market activity will be lower in the next couple of months. I won’t be surprised if sales activity could be down 30% or even 40% in the next few months.”

– Lawrence Yun, Chief Economist of the National Association of Realtors (NARS)

in Yahoo Money

Still, the sector is taking things in stride, shifting to online real estate transactions and digital closings.

For instance, New York real estate companies set up remote closing processes, including electronic notarization, e-signing, live video conferences, and money transfers for their transactions.

In Hong Kong and Singapore, virtual tours and viewings have become “a megatrend” that is accepted among buyers and agents alike. In fact, Hong Kong’s largest property agency, Centaline Property Agency, stated that virtual reality property videos helped to generate HK$100 million in April.

Additionally, online marketing is seeing more emphasis in the industry with the rising utilization of digital marketing automation, chatbots social media, and email marketing.

  • The New Manufacturing Normal

According to Statista, manufacturing shares the spot for the topmost coronavirus-impacted sector with the travel industry, seeing a severe impact on personnel, operations, supply chain and revenue.

On the upside, COVID-19 is the impetus that’s pushing traditional manufacturing ecosystems to be more agile, flexible and digitally enabled. As mentioned in a Forbes article, the sector is expected to experience five years of innovation in the next 18 months with high adoption of technologies.

Automation is set to be a top technology investment as manufacturers look to move their productions on-shore or near-shore. While off-shoring provides low labor and productivity costs, IndustryWeek believes that the advancement of robotics and automation “have drastically increased productivity across a number of manufacturing processes [which] can be easily reshored and deployed domestically].”

Aside from manufacturing processes, automation is also being utilized for task and order processing. For instance, IBM used an automated order management system to help a global manufacturer of contact lenses to maintain its supply chain continuity during the outbreak.

Internet of Things (IoT) is another manufacturing technology that is predicted to gain traction with a projected growth of up to USD 136.83 billion by 2026. The rise in IoT will in turn bring higher demand for a faster, more stable network, such as Vodafone’s Mobile Private Network (MPN) solution.

  • Digitized Retail Sector

The retail landscape, on the other hand, saw a boost in e-commerce and digital marketing as movement restrictions drove more retailers online.

Retail giant, Majid Al Futtaim, accelerated their online strategy by launching the e-commerce channel, carrefouruae.com. With more than 250,000 products, the online marketplace saw a ten-times increase in sales over a period of 10 weeks with average daily orders of 1,300.

China alone recorded online retail sales of $360 billion in the first four months of 2020, an 8.6% increase compared to the same period in the previous year. It’s evident that the upsurge of sales is not just limited to online grocery sellers, but expands to non-food e-tailers too.

“[T]here will be a further acceleration in the digital transformation of the retail sector, with the pandemic encouraging more people [to] experience online shopping.”

– Hou Yi, Freshippo CEO & Alibaba Group Vice President,

in FoodNavigator-Asia

Another expected post-COVID-19 retail trend is the use of augmented reality (AR) and artificial intelligence (AI), with the latter predicted to record $8 billion investment within the retail sector by 2024.

Shopify is a prime example of successful AR implementation, which saw a 250% increase in conversion rates after allowing its sellers to add 3D models. As for AI, My Beauty Matches uses algorithms to simplify consumers’ shopping experience by suggesting items from 400,000 products based on their past searches and purchases.

Other retailers, including ASOS, are also maximizing the benefits of these two technologies to thrive in the post-coronavirus world.

  • Online Security Concerns

As companies extend remote working to ensure business continuity, security risks have shifted from the fortified corporate landscape to the more vulnerable off-site areas. And cybercriminals are using that to their advantage.

According to a survey by Barracuda and Censuswide, among global businesses that are working remotely:

  • 46% have encountered at least one cyber security scare
  • 51% witnessed a rise in email phishing attacks
  • 49% expect a data breach or other threats in the coming month

However, contrary to expectations, cyber security spending is forecast to drop for the rest of 2020. Gartner, which predicted an 8.7% growth in cyber security for 2020, revised the value down to 2.4% while Barracuda revealed that 40% of surveyed businesses have cut their cyber security budgets to save costs.

Chief Technology Officer of Barracuda, Fleming Shi, calls the cost-cutting measure a bad move, seeing as more than half of the workforce is not properly trained to handle cyber attacks.

On another note, Gartner foresees an increase in cloud security, which is in agreement with Barracuda’s finding that 53% of businesses are moving their data to cloud-based models. Unfortunately, almost 85% of IT professionals expressed concerns about the vulnerabilities of remote cloud environments.

In an interview with Digital Journal, Chris DeRamus, the Vice President of Technology, Cloud Security Practice at DivvyCloud by Rapid7, mentioned that “Nearly 50 percent of developers and engineers bypass cloud security and compliance policies,” citing Zoom’s bypassing of common security features as an example.

To strengthen cloud security, he believes that engineers should “tackle cloud security flaws earlier in the build pipeline”, and further states that cloud identity and access management (IAM) will see a greater emphasis in the near future.

The above are just a few examples that show the beginnings of major shifts in various industries as organizations strive to recover from the outbreak effects and ensure business continuity.

As the year moves into the second half, there will undoubtedly be more innovation investments ahead, and more companies will be looking for better and more sustainable solutions.