Retailers Expand Use of Technology Solutions
From big-box behemoths to mom-and-pop neighborhood stores retailers provide a vital link in the flow of goods and services from producers to consumers. With an estimated $4.5 trillion in annual sales, retail is one of the largest and most important sectors of the U.S. economy.
The retail sector has experienced many changes throughout its history. Over the past 10-15 years the impact of disruptive technologies has been especially pronounced. Almost every aspect of retailing – from the supply chain that brings goods to store shelves to the sales transactions at the cash register or online store – has been touched by technology.
Given its size, retail has historically lagged other industries when it comes to tech spending, though it’s not an insignificant sum. Estimates of the annual spend on technology solutions by the nation’s retailers range from $23.5 billion on the low end (U.S. Census Bureau) to $47.4 billion on the high end (research firm Gartner).
Clearly there is an enormous hunger among retailers for technology that delivers meaningful return on investment while addressing business objectives.
Thus, the desire to become more efficient and more customer friendly, and the intent to use technology to accomplish this goal.
In the CompTIA research report Retail Sector Adoption Trends, retailers identified their top business priorities. They included:
• Finding and implementing strategies to reach new customer segments.
• Reducing costs and overhead.
• Improving staff productivity and capabilities.
• Leveraging technology to improve customer services and engagement.
• Enhancing and refreshing product lines.
In the same CompTIA study, 83 percent of retailers surveyed said technology was important to their business. The survey also revealed that retailers’ technology priorities clearly match up to their business priorities. Their top five tech areas of interest in technology included the following:
• Modernize IT infrastructure
• Upgrade website and e-commerce capabilities
• Upgrade mobile presence
• Improve security (digital and physical)
• Enhance marketing automation, social media, m-commerce, digital signage and related tools to improve the customer experience.
With its characteristics of intense competition, thin margins, expensive overhead and fickle customers, the retail sector is clearly a tough environment to do business in. Thus, the desire to become more efficient and more customer friendly, and the intent to use technology to accomplish this goal.
But the security element is rapidly moving to top of the priority list for many retailers. Physical security – combatting retail shrinkage due to employee theft and shoplifting – has long been a challenge for the retail community.
Physical security systems were historically dedicated, independent systems services by physical security specialists. But in recent years the emergence of technology convergence, abundant and affordable storage and inexpensive computing power and endpoints has moved many physical security systems firmly within the IT realm.
Digital, IP-based security cameras capture video that can be transmitted wirelessly to a cloud-based storage systems for processing. Intelligent motion-tracking, facial recognition, analytics and remote monitoring via mobile devices have also become standard features of IP-based security systems, many of which are offered at price points attractive to even the smallest retailer.
Retailers’ need for digital security is as important, if not more, as physical security.
Retailers come into contact with large quantities of customer data; process high volumes of online transactions; and may hold significant amounts of currency (at least temporarily). That makes them an attractive target for hackers and cyber-criminals.
However, in a pattern that unfortunately continues to play out, an alarming number of retailers – one in four in a CompTIA study – fail to see the potential risks associated with cybersecurity threats. Moreover, micro retailers demonstrated far less concern about security than large retailers (45 percent vs. 79 percent). This may be due to a belief that they don’t have sufficient assets to be a target. Unfortunately that’s not the case. VISA has reported that 95 percent of credit card data breaches occur at small retailers.
Another factor to consider is a lack of technology sophistication, especially among the small businesses that account for the large majority of retail establishments. Few small retailers have dedicated IT staffs. Most rely on a do-it-yourself approach, where the business owner or some other staffer assumes IT duties on a part-time, informal basis. But someone capable of resetting a router or replacing a toner cartridge my not be qualified to take the necessary actions to secure customer data and digital assets.
There’s also a dollars-and-cents aspect to the DIY practice. Every minute a business owner spends handling a technology matter is a minute taken away from what they know best – running a retail business. Retailers should run the numbers to determine where going the DIY route with their technology makes business and financial sense, or whether they’d be better services by partnering with a technology solution provider.
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Check Out:- Retail Tech Insights