Retail sector is undergoing a major transformation as a result of changing market conditions that threaten the ongoing success of established players that have dominated their market segments for decades. New competition is emerging from online retailers that require fewer overheads and can offer more favorable prices and larger product portfolios than bricks and mortar stores. As margins are increasingly squeezed, retailers are looking at more innovative ways to differentiate and add value for their demanding customers by creating in-store experiences that also need to integrate seamlessly with digital channels including mobile platforms.
Retailers’ business and digital transformation strategies are influenced by various factors that will drive the emergence of innovative technologies throughout 2017. Therefore, IT investments will focus primarily on optimizing various business processes through greater insight from analytics, automation and the integration of different systems for better information utilization.
Retailers will increasingly compete on customer experience through virtual and augmented reality in stores, and greater efficiency by reducing any friction such as queuing at checkouts or waiting for shop assistants to look up items. This will be achieved through optimized processes and layouts, driven by new software and hardware that may require sophisticated analytics in the background. The growing popularity of mobile apps and platforms with customers is challenging retailers’ traditional approaches to loyalty schemes and separate eCommerce sites. Retailers are under pressure to integrate their communication tools and develop apps that link to in-store devices such as beacons.
Supply chain management poses constant headaches for many retail decision makers who are looking to establish greater control over suppliers and avoid out of stock situations. By upgrading their supply chain management systems and introducing real-time asset visibility, retailers can achieve cost savings by eliminating any unnecessary steps in distribution and keeping lower inventory levels.
The report "Key Trends in Retail IT, 2017" summarizes the key trends affecting digital technologies in retail in 2017, and discusses the drivers that influence their adoption. Retailers are exploring innovative ways to differentiate and create value-adding in-store experiences while also looking to collect and analyze more data. Digital technologies play a key role in driving retailers’ business transformation efforts, including various Internet of Things based devices, cloud services and mobile apps. In addition, advice is provided for IT vendors and retailers.
Companies mentioned in this report: Target, Philips, Genercal Electric, Acuity Brands, Wipro, Cognizant, Capgemini, Accenture, IBM, Cisco, HPE, BT, Orange, Telefonica.
- Retailers increasingly compete on customer experience through mobile solutions and augmented reality in stores, while also improving efficiency by reducing any friction such as queuing at checkouts or waiting for shop assistants to look up items
- The shift from data center hardware to software-defined and cloud-based solutions will continue in 2017; however the focus is on hybrid solutions with efficient workload management, virtualization and multi-cloud environments to avoid vendor lock-ins
- Retailers look to upgrade their supply chain management systems and introduce real-time asset visibility to achieve cost savings by eliminating any unnecessary steps in distribution and keeping lower inventory levels
- Get an understanding of the key trends in retail in order to better target retailers and tailor marketing and business strategies. This report also provides an insight into retailers' strategic priorities and how these link to specific technologies.
2. Summary & Key Findings
3. Market Drivers
3.1. Advance of online and mobile platforms
3.2. Customer expectations
3.3. Eroding margins
3.4. Hunger for data insight
3.5. Diminishing loyalty
3.6. Expansion into new services
3.7. Control over supply chains
3.8. Security challenges
3.9. IT investment focus
4. Key Technology Trends
4.1. Retailers’ competitive advantage and market value will be linked to Big Data and real-time analytics capabilities
4.2. Major retailers will roll out Internet of Things (IoT) projects for greater operational efficiency and customer interaction, including beacons and sensors
4.3. Social media insight and communication will provide greater competitive advantage for innovative retailers
4.4. Self-service stores with in-store terminals and connections to interactive mobile apps will emerge
4.5. Robotics with machine learning functionality will be trialed for diverse functions from warehousing and delivery to smart shop assistants
4.6. Smart lighting is starting to be rolled out across stores for guiding customers to products and creating specific experiences
4.7. Systems integrators and telcos will battle major hardware and software vendors for leadership in driving smart retail concepts
4.8. Virtual and augmented reality will revolutionize customer experience and improve warehousing efficiency
4.9. Multi-purpose smart devices such as tablets will increasingly replace dedicated hardware
4.10. The ongoing shift from data center hardware to software-defined and cloud-based solutions willaccelerate as retailers go hybrid
5.1. Recommendations for vendors
5.2. Recommendations for retailers
6.2. Further reading
6.3. Contact the author
6.4 Contact Us
List of Figures
Figure 1: Market drivers and key technology investment trends
Figure 2: Retailers’ IT investment focus over the next 2 years
Figure 3: Retailers will ramp up investments in business intelligence solutions
Figure 4: Retailers expect IoT to drive operational efficiency and create additional revenue
Figure 5: Retailers prefer leading vendors with retail-specific expertise
Figure 6: Cloud services spending grows stronger than hardware and software for retailers Global retail IT spending in US $millions