We saw the gradual decline of independent mom-and-pop stores when e-commerce juggernauts, led by Amazon, took over the global retail industry. The next to crumble were the brick-and-mortar stores that were forced to shut down, as they could not keep pace with the rapid technological disruptions shaking the online retail landscape.
There seems to be no stopping the online shopping wave that has reshaped local economies and transformed consumers’ shopping patterns. According to recent forecasts, global retail e-commerce sales will touch US$4.5 trillion by 2021. The online retail market in the U.S. alone is set to grow at a CAGR of almost 16 percent by 2021, eight times more than brick-and-mortar retail. Reality reflects such data as witnessed by the startling collapse of several iconic retail stores in the U.S. in 2017 that was forced to file for bankruptcy. Eventually, the big-box stores lost the struggle against the innovative business models of their digital competitors.
However, before we rush to blame any particular e-commerce entity for this transformed ecosystem, I guess we all know where the real source of disruption lies: digital technology. Engineering processes, fuelled by leading-edge technologies, are driving the future of retail. Besides the Internet of Things (IoT), mobile and Internet-connected devices, technologies such as artificial intelligence (AI), cloud computing, augmented reality, and big data have enabled the fluid nature of today’s retail environment. At Wipro, we believe that this will call for an “Engineering NXT” approach, which will enable organizations to engineer products, platforms, people and technologies in this new world at scale. We foresee it shaping the way retail companies will add value to customers at various stages of the product or platform lifecycle. In fact, engineering R&D is already the fastest growing segment within the IT sector and is globally expected to reach a valuation of USD 145-55 billion by 2020.
Smart technology keeps retail relevant
In the new increasingly digital world, retail organizations are now using big data to analyze customer behavior in real time and provide personalized offerings. Big data has also resolve critical issues, such as inventory distortion, managing stock, and streamlining delivery options. Real-time Engineering capabilities have brought end-to-end visibility across the board covering consumers, associates and organizations, and are able to connect the dots to fine-tune efficiency, reduce wastage, and mine new business values. Other data-driven strategies now look at targeted advertising platforms on social media sites that help retailers forecast shopping trends.
In recent years, we have also seen AI revolutionizing retail to optimize customers’ shopping experiences. AI’s true disruptive potential is being deployed in the supply chain, merchandising, and customer engagement, among other emerging applications. AI-enabled devices, like Google Home, not only locate our car keys but also help us research and compare product prices, thus making the competition for retailers fiercer than ever.
At Wipro Industrial and Engineering Services, we recognize engineering driving the innovation story and offer our clients next-generation technology integration to scale that enables organizations to go to market faster. For instance, we recently re-imagined a client’s customers’ shopping experience, delivered through a cutting-edge cloud platform that provided digital transformation in real time. Our solution enabled the retail organization to reorient its processes and drive revenue.
Across the retail landscape, in similar ways, retailers are using technology to work harder and smarter. For instance, digital twin technology is gaining currency in the consumer retail industry to reduce stock wastage and minimize the cost of delivering goods. Here, the creation of a digital replica of a physical product is used to predict, track, and optimize an object’s real-time performance. In this way, using a digital twin throughout a product lifecycle, gives businesses valuable insights into a product before it builds its final version. For example, data pulled from IoT sensors embedded in supermarket shelves can create a virtual replica of a brick-and-mortar store. Store managers can also closely monitor inventory and ensure that shelves are stocked in keeping with product demand and movements. Thus, a digital twin not only improves strategic decision planning, but also enables an integrated supply chain.
Further, savvy retailers are increasingly turning to engineering capabilities within their stores and manufacturing plants/distribution centers while leveraging the cloud to improve efficiency, reduce costs, and simplify a complex IT infrastructure. A variety of retail functions are suited to cloud computing, including space planning, sourcing strategy, merchandising, transport management, and demand forecasting. For example, the cloud captures an accurate digital model of the floor plan and attributes of all store locations, improves visual merchandising, and makes key data-driven decisions about purchasing. High efficiency and self-running distribution centres functioning round-the-clock are leveraging Engineering solutions like Digital Twin, Track & Trace and Autonomous. Solutions such as video analytics based intelligence and Drone-based monitoring are helping elevate the retail operations to a brand new level of productivity and agility. Food Safety monitoring solutions like Cold Chain are bringing end-to-end transparency for grocery stores, supply chain and distribution organizations, while making it easier for customer choices.
What’s in store for the future of stores?
With customers becoming more informed and demanding, retailers have to go out on a limb to provide stimulating and unforgettable experiences to their shoppers. When I see intelligent digital kiosks and hyper-customized concierge services, I wonder what else could augment the customer experience in the future.
But for now, it looks like technology is all set to pamper customers even further. Chatbots are helping customers find the right products, place orders, and even alert retailers about disgruntled shoppers! Augmented reality offers virtual trial rooms equipped with touch screens and smart interactive mirrors that check the availability of outfits in real time.
There is more to come. In the coming years, sophisticated holograms will help shoppers visualize products and even tweak their design. Ultra-fast delivery would be possible using drones that will also be used in warehouses for improved inventory control.
At Wipro, we aspire to meet the needs of our clients through our Engineering NXT framework that keep pace with evolving customer preferences and dynamic market trends.
With so much happening in the industry, the new era of retail seems poised for an exciting journey ahead. So, the next time you forget your shopping list, don’t worry. Let the friendly hypermarket chatbot take care of that for you.