The Store is Still the Future — But Change is Necessary
The ongoing disruption in the retail market is causing all retailers to re-examine how they leverage their key asset – the store, where face-to-face interaction takes place. What will be the role of bricks-and-mortar assets going forward, and what needs to be done to optimize the competitive advantage they can deliver?
While the impact of e-commerce continues apace, the reality is that physical retail is still set to account for 80% of global sales by 2025, thus it has a significant role to play. How can technology make it easier and more cost effective for retailers to leverage their store networks?
If physical retail is to play to its strengths as we move towards the “store of the future,” it needs to keep up with the changing demands of consumers, who expect ever growing levels of convenience and innovative in-store experiences. New technologies such as micro-personalization, AI, AR and VR will all play a role. While these can help to further drive engagement and loyalty, retailers need to also ensure they can bring these technologies onboard while delivering cost savings.
The challenge in this regard, however, lies in the limitations retailers currently face due to their existing IT store infrastructures. Many of these are effectively barriers to achieving the store of the future, and so the solution involves a shift in IT approach.
The store of the future demands an agile, secure and easy to maintain IT infrastructure at ‘the retail edge’ — in the store where retailers and customers meet face-to-face. This will enable new services and applications to be implemented in a quick and cost-effective manner, turning IT from being a barrier to an enabler of in-store innovation. And retailers need to be able to monitor, update, and control all stores through a centralized platform to deliver greater simplicity and a reduction on the bottom line. The store IT infrastructure needs to be seen as an integrated system, not a collection of disparate parts.
For this to happen new technology needs to be embraced. Firstly, powerful virtualization technology, designed for the rugged and dispersed retail environment is now available, making it much more attractive to deploy for retailers, and enabling multiple applications, peripheral hardware and more to be run securely in-store. Secondly, the infrastructure should be ‘in-store’ rather than ‘in-cloud’. While data centers or cloud resources are ideal for some services, the risk of downtime and in-built latency is simply too great for many aspects of a high-performing retail environment. Thirdly, automation is key. This is the technology which allows businesses to manage, control and update the entirety of their IT estate across all branches remotely, thereby simplifying the whole IT process and maintaining a safe, secure infrastructure.
The role of the store is going to change, and store technology needs to be nimble, secure and manageable to support this change. To deliver the ultra-convenient and immersive new in-store experience that shoppers are craving many retailers will require a IT facelift. The important thing to remember is that they can implement this via an inexpensive step by step process, ensuring they get the most out of their legacy hardware. Better that than waiting for the wolf to come to the door.
-Nick East, CEO, Zynstra