Retail Executive

JAN-FEB 2018

Retail Executive is the trusted advisor to top retail executives from the industry’s most profitable retailers. We help retail executives succeed in their job role and grow their business via exclusive, actionable, peer-driven content.

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Page 23 of 43

Retail Technology: Where Are Investments Going? Omni-channel and personalization are driving new investments both in the store and the supply chain. B R I A N A L B R I G H T Contributing Writer knows for sure whether consumers will engage with them or what the ROI might be. "But experimentation is critical," Siegel says. "The more retailers experiment, the more likely they are to find what the right solutions are, even if there isn't an immediate payback." KEY INVESTMENT AREAS Before making those investments, retailers have to de- termine what pain points they are trying to address, and which components of the customer experience ar- en't fully optimized. According to Forrester's "Top Retail Technologies to Watch in 2017" report, 68 percent of companies have made "delivering personalized experi- ences" a priority, and that includes new omni-channel analytics and digital store technology investments. In support of those efforts, retailers plan to invest in a variety of different enabling technologies. For compa- nies trying to stay competitive, those investments fall into a handful of focus areas: BIG DATA AND ANALYTICS: According to Forrester, near- ly three out of five data and analytics decision makers classify big data/analytics as a high or critical priority. "Analytics is one of the most profound fields that is going to be critical for the future of ubiquitous shopping," Siegel says. "The foundation for all of these initiatives is going to be good data and analytics. A number of our members are hiring data scientists or looking for data scientists to hire. That is one of the biggest challenges — finding the right talent around data science and engineering." As an outgrowth of those analytics investments, artifi- cial intelligence (AI) systems are also playing a role with- ast year, IDC Retail Insights predicted that digital transformation investments would triple by 2019, and a PwC survey of 350 retail- ers on behalf of JDA Software Group found that 69 percent of executives plan to increase invest- ments in digital transformation. Omni-channel and personalization efforts are affecting how those investments are targeted. According to sourc- es contacted for this story, those investments will in- clude better inventory optimization and planning tools, data analytics, and in-store technologies that can help enhance the overall customer experience. Many of these investments will also focus on bridging the retail store with the e-commerce storefront and mak- ing brick-and-mortar stores more interactive. "Retailers are going to attempt to reinvent the in-store experience as best they can," says Paula Rosenblum, cofounder and managing partner at RSR Research. "At some point, we will reach stasis when it comes to online versus in-store. The online market is big, but it's not infinite." Adam Siegel, senior vice president of research, inno- vation, and sustainability at the Retail Industry Leaders Association (RILA), says that in addition to investing in proven technology, retailers plan to test out more bleed- ing-edge solutions. RILA and Accenture launched the (R)Tech Center for Innovation in early 2017 to generate new research and help retailers experiment with some of these newer technologies. Transformative technologies, on the other hand, are ones where the use case is still being defined. Retailers are experimenting with blockchain and augmented re- ality or virtual reality (AR/VR), for example, but no one L Retailers across vertical markets — both large and small — are poised to make major technology investments in the coming year. INVESTMENTS technology By B. Albright RETAIL TECHNOLOGY: WHERE ARE INVESTMENTS GOING? RETAILEXECUTIVE.COM JANUARY/FEBRUARY 2018 24

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