The face of retail is changing fast. At a rate that has never been seen before. Staff shortages, changes in customer expectations, problems with the supply chain, environmental pressures, and rising product costs are all playing a role. The fact that all of these pressures are at play together is why the pace of change has to be so fast.
Retailers who are too slow to evolve are going out of business. Those involved in the industry are highly aware of this fact, which has led to them adopting technology at an unprecedented rate. A response that has created ripples within the industry that few would have predicted, a few years ago. Including the fact that the retail industry would accelerate the rate at which it adopts tech to the point where they are currently spending billions on doing so.
Below, we look at some of those effects and ask – who is benefiting from the high level of tech development within the retail sector and who is losing out. To do this we look at three types of new technology and consider the pros and cons of the early adoption of each of them.
Over the past few years, the use of digital signage in retail stores has become commonplace. Even small retailers are now using screens for marketing and to share important information with their customers.
Installing them does not cost much. Yet, they create immediate benefits for both the retailer and the customer.
Retailers have a marketing medium that they can edit and update whenever they like. So, if a product is about to go out of code, they can discount it. Then, draw the customer´s attention to this fact via their digital screens. The retailer benefits by not having to throw the product away and suffer the loss. While the consumer gets cheap goods and does not see prices increase over time to cover stock losses, which is what would otherwise happen.
Digital screens are an example of win-win technology. Their use means everyone wins. However, that is not always the case.
Some of the technology that retailers are installing is going to lead to job losses within the retail industry. According to a recent study carried out by McKinsey about half of the roles will disappear as tech takes over and automates simple processes. That´s a lot of jobs. The Aspen Institute estimates that, as of 2020, around 1 in 10 people are employed within the retail industry. There will be some negative fallout when 5% of the work-age population loses their jobs.
Interestingly, this is something that concerns consumers. In London, some retailers have met resistance when they have tried to roll out cashier-less stores.
So, while retailers eventually benefit from lower-wage bills, there is still the potential for this type of technology to hurt their bottom line. Plus, this tech is not cheap, which means only the larger firms can afford to buy and use it. This means that inevitably smaller retailers will find themselves unable to compete and end up going out of business.
But not all technology, including automation tech, negatively impacts the workforce. Some of it brings benefits. Letting customers use kiosks for returns or to have their queries answered frees up workers to do more interesting work on the shop floor. Lifting technology helps to protect them from injury and better in-store security makes it far less likely that they will have to deal with break-ins, hold-ups, or shoplifters. Read more about technology that benefits retail workers if you want to read this article.
When it comes to who is benefiting from the tech and who is losing out because of it the picture is complicated. There are no clear winners or losers, except the retailers themselves.
After the initial investment, they stand to make higher profits. But even they are going to see that benefit eroding as their competitors do the same. Once that happens, retailers will once again find themselves in something of a price war with each other. That will eat into the bigger margins using technology created.
Customers will initially benefit from the introduction of the new technology. They can expect:
· Lower prices
· More convenience
· Fewer out of stocks
But they are also likely to see the following service-related issues:
· A loss of personal one to one service
· Difficulties in getting refunds or questions that are not regularly asked going unanswered
This is going to be a big issue for customers. They still want the personal touch. A JLL study showed that 65% of senior shoppers still wanted to be helped by a person. Something that is going to become less likely to happen as retailers replace people with machines.