With digital transformation accelerating the pace of change, retailers must take a long-view approach to re-engineering customer experience or risk becoming obsolete. Analysts from IDC Retail Insights will be providing a series of thought leadership guest blogs on the state of digital business transformation for today’s retailers and the key IT pillars to optimize the digital journey.
The retail sector is undergoing a digital transformation. Retailers by and large cannot elect to opt in or opt out – the digital transformation (what IDC calls “DX”) will touch them regardless. Retailers who choose to embrace this inevitability and embed DX in their strategies are doing so because they recognize that they must continually innovate in order to deliver the distinctive and immersive, convenient and frictionless customer experience consumers are expecting. Further, today’s experiential retail mission has to enable customers to engage with the retailer anytime and anywhere, through any channel the customer chooses, through multiple technology and social touchpoints, and to be able to digitally connect with the retailer’s people, products, services, and assets in a way that is easy, convenient, and fast.
Many retailers on their DX journey are experiencing the market advantages that come with embracing DX. IDC Retail Insights has defined 56 high-priority use cases for digital transformation in the retail sector. To support these prominent retail DX use cases, IDC Insights has identified the top technologies that retailers are – and will be – deploying in executing these DX use cases: analytics, artificial intelligence and cognitive, cloud, Internet of Things (IOT), mobile (apps and devices), machine learning, natural language processing, augmented and virtual reality; and blockchain.
In addition to these enabling technologies, there are a high number of other digital technologies that retailers are deploying in their retail environments including: point of sale and payment systems; digital signage; in-store networking WiFi/LiFi; connected retail vending machines; wearables; beacons and proximity marketing systems; store security; self-scanning; store kiosks; intelligent personal assistants; AR/VR, and robotics.
The deployment of these technologies has profound implications for the retail network and infrastructure. Legacy infrastructure technologies were not designed for the cloud-centric, data-intensive, real-time sensing based environments that so many retailers need to build and deploy. These technologies place new loads onto the network and require complex, new supporting technologies to properly deploy the solution. This is requiring retailers to rethink connectivity, and to look at connectivity opportunities across their retail surface.
Every product and service that the retailer offers needs to be take advantage of digitization and connectivity. Every friction point in the customer’s journey and engagement with the retailer results in an opportunity for the consumer to find the next best and most frictionless shopping experience elsewhere.
Connectivity in the store is having to adapt to the new realities of the retail sector:
- The increasing number of applications producing a steadily increasing amount of data; a growing use of the data for customer engagement via email and text across the mobile channels and increasing connectivity of the store across the retail surface.
- Retailers need to strategically re-assess, if they are not already doing so, their DX strategy, what application and technology investments they are planning, and whether their network infrastructure is future-proofed enough to support these investments. In many cases, re-architecting their network infrastructure will be a strategic necessity, and those that take the incremental approach risk losing ground to other retailers that are recognizing their network infrastructure as a strategic asset and foundation.
- Retailers must pivot to embed DX in their strategies and adopt the DX use cases most relevant and appropriate for them. The question is how long the retail sector can continue to adopt the range of emerging retail technologies and continue to sustain their operations on legacy WAN technologies and retail infrastructure.
Network technology is rapidly evolving with such emerging and more established network infrastructure technologies as network virtualization and software-defined networking (SDN); intent-based datacenter network architectures; edge computing; SD-Branch and SD-WAN (software-defined wide area networks); and LPWANs (low-power wide area networks).
In order to succeed today, retailers need to dare to do a radical re-thinking of their infrastructure needs and strategy. The network should be a contributor of intelligence at the edge and into the enterprise and evolve into a virtualized model that can be dynamically provisioned as needed in the retail environment.
Download the latest IDC Analyst Connection paper, “The Digital Transformation Imperative for Retail” for more insights on how retailers can close the gap between digital leaders and laggards.