Technology in Retail: A Lifeline
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1 Technology in Retail: A Lifeline OmniChannel Media, June 2014
2 The numbers: 1 - The amount, in trillions, of retail product sold online in Annual % growth rate of ecommerce globally 30 - The number of minutes Amazon believes they can deliver goods ordered online 5 - The amount of people, in billions, who are currently not using the internet The estimated % of Australian retail sales coming from online 2 Copyright OminChannel Media PTY. LTD.
3 Technology in Retail: a Lifeline Overview The Retail industry is using technology to create a modernised platform that enables global commerce. In an industry that acts as an intermediary between the producer and consumer, the impact of consumer technologies and increased digital power is revolutionising the landscape. What was once a business of bricks and mortar, based around streamlining supply chains and making product available, is now a business of access, digital connectivity and agility. The concept of availability, which is integral to the success of the industry, has become digitised, multi-channelled and without borders. Traditional distribution networks are seeing increased competition as access to all products, at any time, is assumed by the customer. With the globalisation of ecommerce, global competitive price-points are now non-negotiable. The traditional Retail store of the future will no longer be about simply moving product, rather creating a unique customer experience whilst complementing its digital marketplace. This wholesale change in the status quo can be directly attributed to technology. With a new global digital market, the Australian Retail industry must create a new presence that has the ability to evolve. This is a major challenge for an industry so entrenched in a culture that no longer supports an efficient business model. 3 Copyright OminChannel Media PTY. LTD.
4 The Key Changes: Customer: Every industry in the world has been impacted by the sophistication of technology available to the consumer. Technology is raising consumer expectations and creating personal empowerment. The big question for the Retail industry is: if your customers can view accounts, pay bills, interact socially and have access to unmeasurable amounts of information, what role does a physical shop have in the transaction? Leading Retail organisations have accepted that the customer is no longer browsing down the aisles. Rather they see their customers on the couch, connecting with multiple digital devices and engaging with multiple sources of information in order to complete a purchase. The concept that the Retail industry needs to become multi-channel is a conversation that leading organisations have already had and executed. Digital Enablement and Market Growth: Technology has impacted both the size of the market and the types of products available in Australia. With the advent of online and the increasing speed of bandwidth of personal devices, the consumer is now a part of a global Retail network that expands countries and regions. Over a trillion dollars is being spent in this new marketplace and it is growing at a rate of 20% a year. The exciting news for businesses is that this market is in its infant stages, with 5 billion people not connected to the internet. This number indicates the amazing potential for growth for companies who are equipped to work off a global platform. 4 Copyright OminChannel Media PTY. LTD.
5 The potential for the Australian Retail business is incomparable to any other time in the history of the industry. Should companies be able to compete at a global level, their marketplace will continue to grow. On the flipside, for the businesses whose networks are only equipped for Australian conditions, their marketplace will become overcrowded and ultra-competitive. The Golden Age of Distribution: Traditional distribution networks have been shipped out to the abyss. Technology is now attempting to create a new order for distribution networks based on speed, agility and geographic expansion. This is an area of technology where drones are a reality and the ability for a product to be delivered to you in a pub (when you ordered the product from your mobile) is the end-game for companies who want to shake things up. On the ground floor, the Retail industry faces several challenges with enhancing their distribution networks for the modern consumer. Most of these concerns are based around dealing with the legacy of previously successful channels such as stores, mailing and courier services and thirdparty networks. In a world where the consumer demands instant access, speed to consumer is paramount and a key point of innovation. Price-Points & Efficiency: In a free market the connection between an effective technology strategy and price is intrinsic. The premise of technology is to increase operational efficiencies and therefore can heavily impact the price of production and value proposition for the customer. 5 Copyright OminChannel Media PTY. LTD.
6 Due to the impact of technology, there is a new industrial revolution occurring. Organisations are being forced to invest in innovation as the market has increasingly opened. The amazing aspect of this change is the various points of the supply chain and distribution networks that are being affected. Technology is being implemented from production, with things like 3D printing and robotics, all the way through to the point of sale, with retail automation. Technologies Leading the Revolution: Artificial Intelligence: No industry stands to benefit more from Artificial Intelligence (AI) and predictive analytics. Giving companies the ability to use collected information to enhance the customer experience in real time and across multiple channels is incredibly powerful. Big Data: Whether it s real-time, segmentation, collection, analysis or prediction, the power of data in Retail extends across the entire operations of the industry. The evolution of data has seen organisations shift focus from concentrating on data collection, to identifying the data that offers the greatest insight. As the IT industry concentrates on building out-of-thebox solutions for Big Data, the Retail industry will be a key market. 6 Copyright OminChannel Media PTY. LTD.
7 Social Listening: The retail industry must respond to the wants and needs of its customers. Social technologies, in particular social media platforms such as Facebook and Twitter, offer the ability for the industry to respond to the needs of their customers in a predictive manner. Social listening is the next big step for businesses who engage with their customers through social channels. For the retail industry it will give them the opportunity to be prepared for shifts in market behaviours and demands. Phygitalism: Phygital is a phenomenon that focuses on integrating the real world with the digital. For the retail industry, who need to create purpose in both, this technology represents the opportunity to truly capture their customers. Integrating the two worlds can be as mechanical as the concept of Citibike, that harnesses the power of both space and technology, or it can be as creative as Ebay s digital shopfront. Wearable Technology: Wearable technology will bring in the next set of shock waves for the Retail industry. Wearable technology will give retailers the opportunity to engage with their customers in a way that will surpass that of the mobile phone. A channel that provides instant access and live information, wearable technology must be harnessed as the next big distribution network for the industry. 7 Copyright OminChannel Media PTY. LTD.
8 Augmented Reality: Augmented reality gives retailers the opportunity to integrate the benefits of brick and mortar stores with the convenience and cost benefits of the digital world. Augmented reality allows customers to try things on digitally as well as take a virtual tour of a product. This technology will focus on the customer experience and creating real life interactions in the digital world....in Australia. The power of the technological revolution in the Retail space is readily available for Australian retailers. Ultimately it is about an organisations willingness to improve processes and infrastructure where these opportunities become available. Like in many industries, how Retail organisations approach technological innovation becomes a key business asset. Allowing access to new markets as well as fostering closer relationships with existing customers, technology is not only a game-changer, it is a lifeline. The OmniChannel Media Editorial Team. 8 Copyright OminChannel Media PTY. LTD.
9 About OmniChannel Media: OmniChannel Media is an ICT media company. We assist technology firms with the conceptualisation, production and execution of high-level strategic engagement with their target market. We are C-Suite engagement specialists. We do this via custom-built, face-to-face events and digital marketing initiatives. Put simply, we streamline the go-to-market process and provide you with a platform to build relationships with decision makers. Contact Us: w: omnichannelmedia.com.au e: info@omnichannelmedia.com.au 9 Copyright OminChannel Media PTY. LTD.
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