Technology buy-in critical for success of APAC retailers
BANGKOK, THAILAND – 20 June 2017 – We are entering a very crucial time in retail, as the blurring of the physical and digital worlds, paired with the ubiquity of mobile connectivity, are accelerating the adoption of the Internet of Things (IoT) in the APAC retail sector. Retailers who don’t evolve quickly enough will fall out of favor with shoppers.
In the industry’s push toward an omni-channel world, IoT promises to deliver gains in productivity, efficiency, inventory visibility and customer satisfaction – just to name a few. According to Zebra Technologies’ recent 2017 Asia Pacific Retail Vision Study, the three main factors negatively impacting shopper satisfaction are products being out-of-stock, lower prices available elsewhere and desired items being unavailable in-store.
On the bright side, there are solutions to these challenges. Retailers are increasingly looking to smart devices coupled with sensors to reinvigorate their business, and the benefits of IoT adoption can be reaped both at the backend of the store, namely the supply chain, and in stores.
Today, many retailers have in-store inventory visibility challenges. The situation is exacerbated as they open more brick and mortar stores, expand into overseas markets, and diversify their business with online platforms. The need for real-time supply chain visibility, therefore, becomes even more urgent.
Globally, $1.1 trillion dollars are lost due to inventory distortion, including overstock, stock-outs and shrinkage. McKinsey & Company estimates that reducing stock-outs and overstock alone can generate a 10% saving of inventory cost.
According to the 2017 Asia Pacific Retail Vision Study, 68% of APAC retailers surveyed are planning to invest in the Internet Of Things, 65% in Machine Learning/ Cognitive Computing, and 57% in Automation.
Retailers can bring their inventory visibility to the next level by further automating the supply chain. Based on our study, by 2021, 73% of APAC retailers plan to reinvent their supply chain with real-time visibility enabled by automation, sensors and analytics.
The trends in omni-channel retail is to go “phygital” – for physical stores to become digital. Today, despite Thailand’s flourishing e-commerce business (7.9 million shoppers in 2016), brick-and-mortar stores are still an important turf to safeguard. To make the in-store shopping experience more intuitive and seamless, retailers are supplementing technology in their physical stores, turning the entire space into a smart store that automatically senses and records the location and movement of virtually everything — merchandise, associates, shoppers and assets — and translates that data into easy-to-read actionable intelligence that delivers real competitive advantage. The phygital retail space combines the best of two worlds – the tactile satisfaction of physical retail and the intuitiveness of e-commerce.
In APAC, 76% of retailers rate integrating e-commerce and in-store experiences as important/ business critical. It is little surprise, therefore, that 68% of APAC retailers will install sensors tracking status of inventory, and 76% will deploy sensors for tracking customer footpath and be able to know when specific customers are in the store and be able to customize the visit.
Personalized customer shopping experience is a key offering of digital retail. The promise lies in knowing what customers want in their precise moment of need. Online shopping websites do well at this, by recording and utilizing a customer’s purchase history to recommend similar products or services they might want.
In a physical space, retailers are turning to micro-locationing technologies to woo customers and customize a personalized experience for them. For example, beacons are outfitted across the store’s digital touchpoints like shelves, signs, and product displays, and can interact with customers’ smartphones via low-energy Bluetooth signals. These beacons deliver contextually relevant, in-store offers for different customers. Other locationing technology can help track the footprint of a given customer in the store and churn out data such as what products or sections of the store experience drive high traffic, and if they led to a sale.
This will facilitate retailers to generate actionable insights on customer shopping habits and purchasing patterns. From there, retailers can make smarter decisions such as rearranging the store in a more appealing manner with the popular products displayed in obvious locations, or boosting inventory level for hot products.
Data analytics is at the heart of digital retail. The process consists of two components. First, the sensors collect large amounts of raw data generated from RFID tags, video, and mobile devices. Second, the sophisticated software is used to translate these events into actionable insights that can improve practically every aspect of everyday store operations. This does away with the manual labor of trawling through data to examine past performance and determine how to improve future operations.
Although digital data analytics is still nascent, especially in the retail space, its promise is boundless, with 72% of APAC retailers rating managing big data as important/ business critical.
The next wave of digital retail is upon us, as the industry continues to see the convergence of physical and online stores in the next couple of years. For APAC retailers who want to strive and thrive in this changing environment, adoption of technology should be a top priority. Many have already, or have plans to empower their frontline workers with technology, including IoT devices, tracking sensors, connectivity, and data analytics tools. For example, 86% of APAC respondents are planning to invest in mobile point-of-sale devices, 84% with mobile computers with scanners, 86% with tablets and 77% with kiosks.
Retailers of all sizes can benefit from increased operational visibility: mom-and-pop stores can start with a system as basic as a barcode scanner and printer, mid-sized retailers can tap into mobile computers such as Zebra’s TC51 for in-store inventory management, and large retailers can harness cloud-based systems to ensure that the supply chain is running optimally.
Enhanced visibility will address existing operational challenges, as well as create new opportunities, which will lead to increased productivity, cost-savings, customer satisfaction, and – ultimately – profitability. In the retail space, an exciting era awaits. Read more about Zebra’s retail solutions.
With the unparalleled operational visibility Zebra (NASDAQ: ZBRA) provides, enterprises become as smart and connected as the world we live in. Real-time information – gleaned from visionary solutions including hardware, software and services – give organizations the competitive edge they need to simplify operations, know more about their businesses and customers and empower their mobile workers to succeed in today’s data-centric world. For more information, visit www.zebra.com or sign up for our news alerts. Follow us on LinkedIn, Twitter and Facebook.