The retail business is the one that gives you real-time insights into customer behavior and spending apart from hospitality. Over the years retail spending has varied from shopping essential to lifestyle and then luxury and now with post covid19 customer behavior shift, we are back to essentials. People are prioritizing their spending. But that is just a part of the complex imminent challenges retail business faces. According to eMarketer, the worldwide ecommerce grew in 2020 while retail growth overall was down. What does that tell you? It means people in 2020 preferred browsing internet and shopping over the internet to actually visiting stores and shopping in-store. But that’s understandable as the world was struggling with the pandemic.
The real issue that one mustn’t ignore is the radical shift in consumer behavior post covid19. A report by Deloitte on 2023 retail industry outlook highlights that people not only not visiting stores as they did before, but they are also sticking to essentials. The Deloitte report also highlights that customers are dipping into their saving to spend, making up for lost years during pandemic and consumer spending is steadily rising but 2023 recession forecast in United States (35% probability) will impact the economy and inflation would curb spending power amongst consumers once again.
Under these circumstances retailers should think of a technology-led digital transformation that focuses on enhancing the customer satisfaction and improving the inventory visibility in retail and retail supply chain. Integration and intragration of technologies such as RFID, BLE, QR Codes, Wi-Fi, LPWAN, LoRA, UWB etc. can not only improve customer experience but enhance the retail supply chain and item level visibility in retail stores as well.
Retail Disruptions at Present
Retail business faces multidirectional disruptions at present. Wild demands, shift in consumer expectations, increased focus on order fulfillment, ecommerce, unreliable supply chain, inventory visibility issues are some of them. This is why Bain and Company highlighted that top two challenges causing retail disruptions are Inventory visibility and Optimized fulfillment, as reported by GS1 US.
Inventory Visibility in Retail and how technology can help?
Nearly all retail channels rely on inventory, which means real-time inventory updates and accuracy matters the most. Having real-time inventory data can allow for better shopping experience for the customers and prevent out of stock scenarios that retail businesses often struggle with. Processing data to generate valuable insights is another herculean task. Integrating IoT in retail inventory infrastructure can help you with that. Radio Frequency Identification (RFID) and Bluetooth Low Energy (BLE) can help you get real-time inventory updates whenever a product is moved inside or outside the premises. Technology can help with fast and accurate inventory count and audit and allow you to put items on clearance to prevent losses. At the heart of any digital inventory lies the core principle of product identification and RFID is a great tool to do just that.
Inaccurate inventory can lead to extremely disappointing customer experience and brands can lose customers. Technologies like LoRaWAN can enable a wide area network tracking of inventory and create a robust supply chain.
Optimized Fulfillment in Retail and how technology can help?
Order fulfillment in retail is the last step. And why this is a challenge? As I mentioned above, with the rise of ecommerce, people are increasingly shopping online. After placing any order online, customers want real-time updates on the dispatch status of their delivery and a tracking solution that provides real-time location. That has become the standard norm now in eretail. The longer a customer waits for updates on product delivery, the higher is the chance of dissatisfaction, order cancellation and added costs.
Normally, it just takes 2-3% of total order value to fulfill the order and using technologies like RFID and GPS and SMS/email services, retailers can provide customers with real-time updates and optimize the fulfillment without inflating the costs.
The Retail business suffered a lot during covid19 pandemic. Customer expectations and spending also witnessed a paradigm shift leading to more concentrated efforts by retailer to integrate technologies in day-to-day business operations. Inventory visibility and fulfillment are also important challenges for the retail sector in the post-pandemic world. They refer to the ability to monitor stock levels in real time and to deliver orders to customers efficiently and effectively. Businesses in retail sector now realize how important technological transformation in business is and how important 360 degree inventory visibility and connected supply chain that technology can unlock is.
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