Adapt or die: why IT innovation matters more than ever
The retail industry has long been chastised for not moving fast enough when it comes to technology innovation. Perhaps we are now making up for lost time as the industry has changed rapidly over the past ten years alone and retailers are investing in new solutions to keep pace. The evolution of technology has not only changed the way consumers shop, but changed the way retailers respond and how they operate.
Retailers have long depended on technologies and partners to help make their store experience the best it can be. But for years, loss prevention technology was really the only focus and it was a fairly straightforward game of “keeping the bad guys out.” Today, the industry has become increasingly complex and the “bad guys” even more determined. Loss prevention and shrinkage is a $100 billion dollar issue. Every day retailers need to track and protect merchandise, employees and customers, combat organized retail crime – which has become increasingly sophisticated – and reduce shrink, all while providing a safe and secure store environment.
To complicate matters, shoppers have also become savvier. They want a specific item, in the right size, in the right color and they want the best deal. Customer relationships are shifting towards a one-to-one model instead of a one-to-many approach that was used in the past. The emergence of trends such as omnichannel retailing gives retailers the opportunity to address the shift and offer their merchandise to shoppers at the moment of interest, and sell at the moment of decision, but it also raises shoppers’ expectations with a promise of availability. It also shines a hard light on the ongoing issue of “out of stock” which costs retailers an estimated $456 billion dollars in lost sales annually according to IHL’s 2012 Inventory Distortion Study.
Clearly, the retail market has experienced some dramatic shifts of late and the recent economic downturn has added yet another pressure point. The intersection of all these mounting challenges has created a complex environment for today’s retailers where they must adapt to not only ensure safety and security, but enhance overall store performance.
As many of our customers have learned the hard way, the processes and systems in place don’t always meet today’s challenges. Retailers are used to relying on individual technologies to address individual problems, but none of those systems “talk” to each other. It’s difficult to see patterns emerge or anticipate store needs if information isn’t accessible, updated or timely.
Retailers of all sizes need to capture, interpret, report and intelligently respond to real-time operational data from stores, employees, inventory and shoppers. That data can be collected from existing store systems as well as a number of sensor devices – from traditional EAS tools and newer RFID-enabled solutions, to traffic counting and video analytics. However, it’s not just about the power of the data itself, but rather the integration and analysis of all those data points in real-time. By giving retailers the ability to gain insights into each store, each region and even collectively worldwide, they are poised to optimize store performance, increase profitability, and enhance safety and security.
This is a significant shift in how retailers have historically approached technology. But given today’s dynamic market, empowering customers to maximize the value of their current IT and security investments today while enabling future growth and integration of additional technologies is critical.
Jim Caudill is global director strategic marketing & alliances with Tyco Retail Solutions, a leading global provider of retail performance and security solutions. For more information visit www.tycoretailsolutions.com or email email@example.com.