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How Technology Continues to Change the Future of Retail
Retail is still enduring a major transformation as the physical and digital worlds both collide and complement. In thinking about what the next several years may hold, we decided to explore perspectives from both retail shoppers and industry workers, surveying more than 1,000 consumers and 500 staff across the U.S., the world’s largest retail market. We asked them about their preferences, their frustrations and their future visions for the bricks-and-mortar vs. online retail experience.
Our research revealed compelling predictions as the landscape continues to evolve. From workers’ perspective, understaffing is the biggest frustration. In fact, over 80 percent of retail workers claim that more efficient management of stores and better forecasting would improve their job satisfaction. Also, over 70 percent of retail employees agree that a pay-desk will no longer be the area in the store where the greatest value, advertising, or customer retention is provided. This supports the claim that it is no longer the biggest opportunity to add value to the customer experience. Realistically, innovative technologies can enhance employee engagement and staffing by more accurately providing automated systems to carry out menial tasks.
On the consumer side, availability and accuracy are key regardless of shopping channel. Despite the abundance of online shopping opportunities and the recent closing of many retail outlets, 55 percent of our respondents still enjoy and engage in the in-store experience. Only 27 percent said that they’ve moved to more online shopping because retail closures limit choice; and only 8 percent felt in-store shopping doesn’t offer a positive experience. But that experience perception varies a lot by type of store. Across the product spectrum – grocery, fashion, home & DIY, electronics, health and beauty, entertainment, sports and leisure, and general merchandise – our respondents far prefer the chain store experience over that at a small business. For groceries, electronics and general merchandise, the delta was over two hundred percent more consumers preferring the chain store experience.
In-store shopping brings its share of frustrations, most critically from poor availability of stock (48 percent) followed by poor customer service (34 percent). And 62 percent report having received a voucher or special offer for a product that was not available when they visited the store to buy it. However, a similar frustration exists with online shopping, where 47 percent reported experiencing delayed delivery of an item they purchased. Forty eight percent reported that a product once received was not as it appeared online.
But don’t think shoppers are willing to pay much for a retailer’s poor inventory management. Just 36 percent said they would pay for next day delivery, 34 percent would pay for same day delivery and only 13 percent would pay for precise delivery. And how much would they pay? Not much. Thirty nine percent would pay up to $5.00 for same day delivery; 51 percent would pay up to $5 for next day delivery; far fewer would pay over $5.00 or pay by annual subscription.
Unfortunately for retailers, when it comes to both online and in-store shopping, respondents didn’t show a strong preference for any particular change that retailers could make to enhance the shopping experience. For instance, the highest response we got was the 34 percent who felt that having stock information available via a mobile app would help; 29 percent indicated shorter delivery timescales and more specified timeslots for click and collect; and 28 percent indicated they’d prefer shop staff with in-depth product knowledge and a customer’s buying profile at their fingertips. In fact, of all the options we tested those that could be considered privacy-invasive or profile-building rated low.
So what do shoppers expect the future to bring? For one thing, they expect technology to play an increasingly bigger role in the in-store experience. By 2025, 66 percent of consumers expect there to be even fewer staff but more automated processes, virtual assistants and virtual reality technology. Forty four percent expect consistency in pricing of goods between the physical and online outlets. Other tech-enabled options we tested (e.g., virtual reality, cash free purchasing, purchasing through retailers’ social media sites) were expected by lower percentages of respondents – perhaps because they aren’t aware of what could be possible, and such leading-edge capabilities aren’t yet familiar to them.
The bottom line is that everyone expects technology to have a game-changing role. The retail industry is at a pivotal point in its evolution; it’s one of the ripest arenas for artificial intelligence and predictive business models. Not only does AI improve the customer experience by making the right inventory more predictable and thereby available when shoppers want it, but it also allows in-store staff to do value-added activities that increase customer satisfaction. In the current volatile retail market, the ability to effectively predict and forecast both staff and stock is more valuable than ever. By arming themselves with the right technology, retailers can overcome those challenges, maintain higher staff morale and keep customers happy.
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