Retail Executive

JAN-FEB 2018

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MOBILITY: Mobile solutions for use within the store will also be a focus moving forward, and 85 percent of re- spondents to the PwC survey planned an investment in mobile apps. That is taking a number of different forms. Target, for example, has rolled out a myCheckout app that allows store associates to help customers make online pur- chases from the store floor using a handheld device and credit card reader. These capabilities provide a more di- rect connection between the store and the e-commerce channel, while also providing new ways to improve conversion rates. This is part of a broader effort to increase the value of the store associate when it comes to the customer experience. Retailers want employees to be at least as knowledgeable as consumers when it comes to prod- ucts and prices, and that means mobile connectivity. Mobility efforts are also targeted at improving store efficiency. Target also deployed IT support bots that automatically identify and solve mobile software and hardware problems at the store level, a system that the company says has saved more than 1,000 store team hours in the first few months after rollout. SOME TECH NOT READY FOR PRIME TIME Note that the above list doesn't include some technol- ogies that have received a lot of media attention like 3D printing, robotic last-mile delivery, the Internet of Things (IoT), and virtual reality. That's because, despite a high level of interest, many of these solutions don't yet have a proven use case. That doesn't mean they don't have promise. AR/VR is a good example. According to Forrester's data, over a fifth of U.S. online adults have never heard of VR head- sets, and 46 percent don't see a use for it. But RILA's Siegel thinks that AR will be an important component of ubiquitous or ultrapersonal shopping, which is why retailers are testing the technology. "A fur- niture retailer could develop an app for a mobile device so you can virtually place a couch in your living room to see what it looks like," Siegel says. In the case of the IoT, some retailers are taking advan- tage of real-time location tracking, but for the most part they aren't leveraging it to increase interactivity. In its benchmark report ("The Internet of Things in Retail: Getting Beyond the Hype"), RSR found that most re- tailers are not investing in the technology because they don't grasp the use case or don't have the infrastructure or IT bandwidth to tackle an implementation. Moving into 2018, retailers are investing in technolo- gies that will make omni-channel fulfillment more ef- ficient and profitable, while also leveraging mobility to make the in-store consumer experience feel more like a personalized online experience. R in back-end software systems to help retailers improve decision making when it comes to inventory planning or supply chain optimization and scheduling. Siegel says there is also increasing interest in consumer-facing ap- plications like creating bots for retail websites and mo- bile apps that can help shoppers find the right products or make more intelligent recommendations. CLOUD TECHNOLOGY: Cloud platforms can encompass just about any solution, from e-commerce to store sys- tems to analytics. More of these solutions will transi- tion to the cloud moving forward. During a session at the 2017 NRF Big Show, IHL shared that 34 percent of retailers' software budgets were going to the cloud, up from 26 percent in 2016, and those investments will continue to increase. OMNI-CHANNEL INFRASTRUCTURE: Aligning the supply chain, e-commerce, and in-store inventory to accommo- date omni-channel sales will be a big priority for retailers hoping to provide a more holistic shopping experience. When Target announced its mammoth $7 billion multi- year CAPEX spending plan, omni-channel was a key focus. In the PwC survey mentioned above, 51 percent of CEOs indicated they would increase their invest- ments in buy online, pick up in store services, up from 47 percent in 2016. In addition, 48 percent of retail CEOs planned to invest in buy online, ship to store solutions. INVENTORY/SUPPLY CHAIN MANAGEMENT: Along with investments in analytics, retailers will need to parlay that knowledge into more predictive supply chain sys- tems for better forecasting and planning. That will hap- pen alongside what Rosenblum thinks will be a shift in inventory sourcing. "There still needs to be a change in the supply chain network to make it more flexible as we get better data, and there will be more near-sourcing for replenishment. You can't get faster and still do it from half a world away," she says. Victoria Brown, senior research analyst supporting IDC Retail Insights, says that there is also interest in dis- tributed order management solutions that can reallocate goods based on a variety of inputs. Using these solutions can help retailers avoid markdowns, for example, by re- allocating stagnant inventory to different channels (or physical locations) to improve margin. "The return on those solutions is very fast in opposition of margin erosion," Brown says. "Retailers are making back their investment in these systems within weeks by reallocating goods and avoiding markdowns." Geospatial freight analytics is another application be- ing targeted by retailers who not only want to track the location of goods in transit, but also make determina- tions about how arrival times might affect price or in- ventory allocations. RETAILEXECUTIVE.COM JANUARY/FEBRUARY 2018 25

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