“As per a recent report, over 75% of buyers prefer buying from brands that personalize their purchase experience, and close to 54% of brands recognize it as the most important priority.”
Today, the retail landscape has turned more competitive than ever. The customer is in total control, and only personalized, unique retail experiences will capture their attention. This has made retail move to digital and acquire a new term called “Retail tech.”
Traditional retail has largely been business-centric, with the customer holding a secondary position. However, the pandemic flipped the table, and now it’s the other way around, with customers gaining the necessary control over the brands. This trend has given way to a new buzzword in the industry called “Retail tech.”
Retail technology refers to the digital tools and innovations utilized by retail enterprises to manage and optimize their operations. Retail tech has emerged as a result of the global digitalization movement and is a key to the future of retail.
Modern retail firms are leveraging digital technologies such as AI/ML, Cloud, Big Data, and IoT to build robust and streamlined retail processes to enhance the operational efficiency of their businesses. Specific areas such as Inventory management, Customer support, Automated checkouts, Cybersecurity, Data analytics, Smart stores, and Network management are entirely dependent on emerging technologies.
Let us explore the retail tech market and some key opportunities that will arise with this trend.
Major Business Intentions of Retail
Since retail is an ever-evolving market, the enterprises associated have to keep moving with it and eventually adopt retail tech as a part of their operations. We’ve identified three primary business intentions across various digital themes that are being reinvented to suit the current retail tech landscape.
Stores and E-Commerce: Companies are leveraging predictive analytics, AI/ML, robotics, and AR/VR to enhance retail stores, simplify operations and enhance customer experience. Integration of QR code payments, usage of AR-based holograms for shopping, and AI to analyze customer behavior are key developments in this area.
Supply Chain: Enterprises are increasingly trying to leverage AI/ML, blockchain technology, and self-navigating robots to track and deliver products seamlessly. AI-powered cameras in vans, Computer vision sensing systems for monitoring products, and autonomous robots are the key highlights in this area.
Sales and Marketing: Retail companies are utilizing data analytics, AI, and ML to improve sales & marketing operations. Usage of analytics in customer intelligence, blockchain in customer experience, personal assistance in digital selling, and AI-powered Digital marketing are the key focus areas in this segment.
Retail Technology Footprint
The global retail tech footprint is segregated amongst three regions: Americas, EMEA, and APAC, with America dominating the technology workforce landscape.
Out of 524 global technology centers, 187 are in the Americas, 266 in the EMEA region, followed by 71 in the APAC. However, the Americas take the lead in technology headcount, standing at 241k (53%), followed by EMEA at 144k (32%) and APAC with 72k (16%).
Retailers in the Americas are looking towards omnichannel offerings to attract more customers leveraging use cases such as robotic carts, chatbots, and digital wallets. The Americas include Greater New York City, Greater Chicago, and Greater Atlanta, all located within the United States as some significant locations.
Providing enhanced customer service with in-store and post-purchase automation deployments are the key priorities of the EMEA region. The EMEA region has Paris, France; London, United Kingdom, and Frankfurt Am Main Area, Germany.
The APAC region’s focus areas include providing enhanced customer service with in-store as well as post-purchase automation deployments. The APAC region consists of Bengaluru, India, Shanghai, China, and Melbourne, Australia are some focused locations.
Since retail tech is the future of the industry, the race to full-digitalization has paved the way for outsourcing arrangements for enterprises. Companies including TCS, Cognizant, and Infosys are some of the leading service providers in the retail industry.
Other service providers include Capgemini, Accenture, IBM, HCL, Tech Mahinda, and Genpact.
Most of the outsourcing engagements are in the areas of:
- Consulting and Systems Integration (CSI)
- Application Development and Maintenance (ADP)
- Infrastructure Management Services (IMS)
- Product Engineering Services (PES)
- Reporting and Analytics (R&A)
- Digital Services (DS)
The outsourcing engagements in the industry directly reflect the need for digitalization, which further leads to the unlocking of more opportunities in the sector.
Key Opportunities for Service Providers
Outsourcing for retail tech has turned into a major theme in retail making the opportunities for service providers in this market endless. To summarise the service provider opportunities, let us look at the key focus areas and then target each important area individually.
In the figure above, the key technologies and focus areas correctly summarise the market opportunities for service providers in relation to each development. Let us now look at service provider opportunities in relation to the business intentions discussed earlier.
Stores and E-Commerce: Short-term opportunities include QR code payments, Digital wallets, and retail. This is followed by mid-term opportunities in robotics, Electronic shelf label, and Smart shopping carts. Long-term opportunities in this market include AR-powered shopping and In-store drone assistance.
Supply Chain: Inventory demand forecasting, Automated packaging line, and Automated guided vehicles constitute short-term opportunities. Mid-term opportunities comprise of AI-based inventory tracking and retail product provenance. This is followed by long-term opportunities in Autonomous delivery drones/robots and Blockchain-based freight management.
Sales and Marketing: Short-term opportunities include sales assistance bots, email marketing automation, and Geotargeting. Voice-enabled shopping, Product recommendation engine, and customer database automation form the Mid-term opportunities for service providers. Long-term opportunities comprise of AI-enabled customer behavior prediction and In-store product recommendation.
Service providers must prepare themselves by managing things to offer a packaged solution. 2022 and forward, the retail industry has the potential to unlock more significant opportunities for service providers paving the way for better collaborations across various themes.
Draup’s sales intelligence platform provides sales teams with data on prospects’ business intentions and outsourcing roadmaps. It brings their notice to critical signals and trends and converts the insights into action points, allowing sales leaders to target enterprises with IoT solutions that address certain pain points.