Understanding Gartner’s 2019 Technology Hype Cycle in Retail

Ryan Hall Manager, Vertical Solutions Marketing Published 26 Nov 2019

Digital transformation is driving change in the retail industry in countless ways. less than half of retail companies have been implementing or have implemented a business model change.

“Only 22% of retailers indicate digital initiatives are a top priority versus 31% of top performers.”

-Gartner, Hype Cycle for Retail Technologies, 2019

The Gartner Hype Cycle for Retail Technologies report reviews 25 innovation profiles for CIOs of large retailers to consider for investment activities. It details this year’s retail Hype Cycle to assist CIOs in prioritizing high value investments to effectively conduct retail commerce within the digital business environment.

Each phase of the hype cycle defines technology trends, advice for users, business impacts, benefit ratings, market penetration and more in extensive detail. To provide a high-level overview, we’ll be highlighting what we feel are key trends from three out of the five phases below.

Technologies On the Rise

Unified commerce ecosystem

“A unified commerce ecosystem (UCE) includes the necessary components to support unified retail commerce, including the customer’s ability to browse, transact, acquire and consume across touchpoints.”

-Gartner, Hype Cycle for Retail Technologies, 2019

A UCE extends across all retailer touchpoints, including stores, alternate physical locations (lockers, kiosks, pop-ups), web; mobile; social and IoT devices, regardless of input mechanism.

How it impacts business:

Today, retailers should bring UCEs into their long-term roadmap for a converged offering, and as a way to deliver a consistent, value-added experience for retail shoppers. According to the report, “Outcomes and goals should not be limited to an elevated customer experience; visibility across a retailer’s entire commerce offering can drive improvements in operations and better decision making due to the availability of data.”.

Smart Shelf

Gartner defines it as “Smart shelf refers to the connected shelf in a physical retail store, which can include weight measurement and computer vision for product detection, inventory accuracy, customer sensing, as well as provide a foundation for advertising media and personalized messaging.”

How it impacts business:

Smart shelf technology is making its way into grocery, home improvement, convenience stores and more. Cloud-based solutions enable retailers to initiate activities from anywhere. We believe digital shelf technology can improve retailers’:

  • Marketing
  • Merchandising
  • Space planning
  • Store operations
  • In-Store Shopping Experience

Technologies At the Peak

Customer Engagement Hub

“A CEH ties multiple apps together in order to optimally communicate with customers. The objective is to connect all departments, enabling synchronization between marketing, sales and customer service.t includes proactive and reactive communication, allows personalized, contextual customer engagement, whether through a human, artificial agent or sensors, across all interaction points.” * .

How it impacts business:

Customer experience remains a key focus for retail. CIOs and IT decision-makers are using technology to enable customer retention and loyalty.  according to Gartner, “At this stage, the feasibility of a true CEH is limited as most of the components of a CEH are not bundled as a suite. This limits the feasibility of a true CEH. We anticipate that large CRM software vendors will increase new capabilities to bridge this gap through acquisitions, partnerships with system integrators and their own R&D efforts.”.

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Robotic Process Automation

“Robotic process automation (RPA) tools perform “if, then, else” statements on structured “data, typically using a combination of user interface (UI) interactions, or by connecting to APIs to drive client servers, mainframes or HTML code. An RPA tool operates by mapping a process in the RPA tool language for the software “robot” to follow, with runtime allocated to execute the script by a control dashboard.” 

-Gartner, Hype Cycle for Retail Technologies, 2019

How it impacts business:

RPA brings the potential for labor cost savings. For example,, “a global retailer used RPA to connect an internationally diverse general ledger project spanning 35 countries. The automation connected two separate systems, saving significant manual effort.”

“Gartner predicts that by the end of 2020, merchant leaders will rely heavily on algorithms, prompting the top 10 retailers to cut up to 33% of headquarters merchandising staff. Through 2022, at least two large, multichannel retailers will replace 10% of store associates with nonhuman resources.”

-Gartner, Hype Cycle for Retail Technologies, 2019

Technologies Climbing the Slope

Unified Merchandise Planning

Gartner defines it as, “Unified merchandise planning enables retailers to simultaneously plan merchandise assortments, purchases, inventory levels and prices across all physical and virtual channels or touchpoints, while taking into account various marketing and event planning calendars, seasonal influences, and differentiated fulfillment strategies.”

How it impacts business:

Multichannel merchandise planning gives tier 1 retailers a competitive advantage by enhancing customer loyalty, services and brand perception. Demand-planning activities will support:

  • Better forecasting and inventory management
  • Accurate, open-to-buy planning
  • Supply chain information for vendors, logistics and transportation functions

The Road to Digital Success in Retail

 To remain competitive, sustain growth, and continue to deliver strong customer experiences, we feel retailers must focus on their digital initiatives while managing costs simultaneously.

That said, the 2019 Gartner CIO Survey indicates that digital maturity and progress in retail is behind cross-industry top performers.

49% of top performers are currently harvesting digital business benefits, compared to just 15% of retailers (see “2019 CIO Agenda: Retail Industry Insights”). *

Lack of a clear plan and agreement for the future can prevent IT decision makers in retail from identifying the changes necessary to implement and scale digital business benefits effectively. Further, emerging technologies may lack tangible use case implementations in the market, making it difficult for retailers to determine where and why to invest.

To learn more about the 2019 Hype Cycle for retail, gain access to the full Gartner report and learn:

  • What you need to know about the Hype Cycle
  • Hype Cycle phases
  • What innovations are on the rise
  • Innovation benefit ratings

Disclaimer:

* Gartner, Hype Cycle for Retail Technologies, 2019, 31 July 2019, Kelsie Marian

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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