Surviving the Next Retail Tech Revolution

How to Avoid Being a Casualty of the Digital Revolution

Many retailers looking to differentiate their brand will tackle the risk of becoming early adopters of new in-store technology. Other retailers will play the more cautious angle of waiting to implement new in-store technology until the difficulties associated with launch are ironed out. Regardless of approach, all organizations are subject to the truth that evolving technology alters the landscape in which they operate.
With the first big wave of online sales environments like Amazon and eBay, we witnessed major retailers begin to close their doors—we think of now-historical examples like Blockbuster or Borders, once market leaders in their respective industries that failed to anticipate, plan for, and react to technological innovation. Learning from the past, it’s now generally accepted that a digital presence is required as a license to operate. However, this does not mean vendors that have gone digital are inherently safe from evolving technologies.

What Will Be the Next Retail Revolution?

For years now, we’ve spoken of omnichannel. We’ve seen elements of omnichannel in practice, but the idea of the complete merging of physical and digital engagement has not come to fruition. Retail is in the process of another revolution— once again, those that cannot properly anticipate, plan for, and react to oncoming technological changes will be left behind.
Digital technology in the physical store offers tremendous advantages to retailers looking to gain insight about their customer and capitalize on engagement. Beyond collecting data, technology allows retailers to further differentiate in-store experiences, creating consumer interactions via touchscreen kiosks, robot assistants and personalized interfaces. Remember “Pokémon Go”? Geo-location allows for customized, time-sensitive offers that allow retailers to capitalize on a beneficiary capacity of new and engaging applications. New mobile payment solutions allow for a truly frictionless experience, offering the consumer the ability to experience and interact with brands as they choose.

Shocks to Employment

Soon, the above-mentioned in-store technological advances will no longer be differentiators—like online sales channels, they will become minimum viable solutions in the competitive retail ecosystem. From a resourcing perspective, these changes, on the surface, all point to the decline of employee resourcing.
Self-checkout has become a dominant force in channels that historically relied on human engagement—convenience stores, tabletop ordering in restaurants, scanning while shopping in large retail stores. Already, an increasing portion of the consumer population has migrated to mobile banking. Millennials in particular have been recognized as a generation that has never handled physical checks, stepped foot into a bank or interacted with a teller. Every day, millions of working Americans order morning coffees on their smartphones, pay via in-app payment acceptance, and pickup their prepared orders without ever interacting with the coffee shop’s employees.
Across retail spaces, we see trends of faster promised delivery times, necessitating more warehouse space. This increased warehousing leads to fewer physical locations, which, in turn, leads to fewer employees.

Looking Forward in a Changing Retail Ecosystem

On the surface, it’s easy to imagine the sci-fi version of the future in which human resources become obsolete. However, as the physical and digital complete their merge into omnichannel, we can’t forget that human resources cannot be substituted for. Even Amazon, who many may argue acted as the catalyst of the first digital revolution, has perceived enough value in brick-and-mortar to warrant the opening of physical stores.
As we transition into a true omnichannel environment, front-line employees will be the number one determinant of whether consumers engage with in-store technology. These employees will perform essential functions of guiding consumers to the technology, instructing consumers on proper and optimal use, as well as ensuring the technology remains clean, attractive, and functional. Customer service is perhaps more important now than it ever was—as retail technology increases, the barriers for a consumer to migrate to a competitor have all but dissipated. The most successful retailers will be those that find a new need for employees beyond product management or cashier work, those that are able to cultivate an employee culture that can serve as a reliable differentiator as the revolutions continue.
For further discussion, contact Daniel at dkahan@wcapra.com.