Many would argue Amazon is the greatest retail game-changer of all time. There’s certainly merit to those claims. Amazon built a massive marketplace of online buyers and sellers, offering a breadth of products. They catapulted e-commerce into the mainstream and built a robust logistics network that enables lightning-fast delivery, radically changing customer expectations.
Can you imagine waiting for an item for more than two weeks anymore? Many people have been conditioned to expect a streamlined, personalized and speedy shopping experience, thanks in large part to Amazon’s impact on the retail sector.
But then the pandemic hit. Amazon finally found a formidable challenger to its ‘biggest retail game-changer’ title: COVID-19. The pandemic has impacted life around the globe and the virus has altered how we work, learn, connect and shop.
When the virus first took off in the U.S. in early March 2020, strict stay-at-home and social distancing orders served retailers a tough set of challenges. While grocery stores and pharmacies became as critical and populated as ever, many other non-essential retailers were in a tough position.
These retailers had two options: lean into e-commerce or dramatically adapt their brick-and-mortar stores to support contactless shopping through curbside pick-up, buy online, pickup-in-store (BOPIS), and robotics. Let’s take a closer look at the trends that have redefined retail over the last nine months and some of the technology behind them.
E-commerce is more popular than ever due to the simple fact that shoppers don’t have to leave their homes and risk exposure to the virus. In fact, 10 years of anticipated e-commerce growth took place in just 10 weeks, according to McKinsey. The holiday shopping season will only exaggerate this trend, with some experts predicting e-commerce sales to see a record growth of almost 40% for November and December of this year.
But this spike in online spending places immense pressure on retail’s critical business operations. Retailers must ensure their supply chains — as well as fulfillment and distribution centers — are equipped to handle the increased traffic and demand. This is because there seems to be a shortage in certain goods ahead of the shopping season as suppliers and retailers might have misjudged consumer purchasing behaviors.
To combat these challenges, retail and logistics organizations are investing in strategic technologies, specifically reliable IT network solutions, to digitize their supply chain.
Curbside pickup has emerged as a key offering since the pandemic because customers seek safe, touchless options for purchasing goods. Curbside pickup enables businesses to keep their lights on, keep their staff safe and employed, and meet customer demands. An early adopter of the service, Target Drive Up enables customers to shop in the Target app, drive to the designated parking spot and have items delivered straight to the car.
It’s safe to assume retail brands will double down on flexible shopping options entering the holiday shopping season, such as in-store pickup, curbside pickup, outdoor marketplaces and pop-up retail sites. Reports suggest that two-thirds of retail sales this holiday season will still be driven by brick and mortar stores.
But it’s important to note that these extended services require adaptable, flexible and secure technologies to be effective. For curbside pickup and pop-up sites, retailers must cover outdoor environments with secure connectivity for device support and payment processing. And both BOPIS and ship-from-store rely on IoT devices such as scanners, tablets and mobile phones to accurately keep track of inventory on the floor and in the backrooms of physical stores.
Most stores are enforcing reduced capacity and limiting the number of employees and customers in stores. To ensure customers don’t notice a difference in service, some stores have employed robots to assist in everyday tasks and help keep customers safe. Retail stores are using robotic and IoT technology in fulfillment and in-store locations to handle materials, track inventory and clean surfaces.
For example, Tally, made by Simbe Robotics, is a robot currently deployed in stores such as Giant Eagle and Schnucks. Tally monitors shelves and sends data to employees about when and where to restock items, which is integral to efficiency because stores have reduced the number of employees working each shift.
With the retail industry facing heightened demands because of the pandemic, robotics will continue to be a key technology to assist employees in fulfilling orders, providing safe customer experiences and efficiently checking inventory.
The pandemic’s mark on retail is unmistakable. You don’t need to look any further than your own shopping behaviors. It’s also important to keep in mind that COVID-19 is an ongoing, fluid situation; state and local mandates are constantly changing as infection rates rise and fall. A city could allow physical stores to be open one week, then order them closed the next, meaning stores are having to build flexibility into their strategy.
The greater problem is that not all retailers were prepared to undergo this rapid digital transformation. COVID-19 has exposed a deep retail digital divide and many stores — especially small businesses — are facing an existential inflection point.
This article was originally published to TechTarget IoT Agenda on December 16, 2020.