Retailers have faced challenges from all angles this year. Between the ongoing effects of COVID-19, the labor shortage, supply chain difficulties and consumers’ rising expectations around digital and omnichannel experiences, many brands are aiming to keep their heads above water through the New Year.
Retail technology solutions provider NCR shared insights on the retail industry at large and what technology trends we can expect to see retailers embrace to solve the puzzle of evolving experience expectations.
Impacts of the labor crisis will continue
In August 2021, the Bureau of Labor Statistics found that over 850,000 retail workers left their posts – and many have yet to return.
Amid retail’s busiest season, retailers continue to struggle to fully staff their stores, warehouses, and fulfillment centers. A recent survey found these jobs are the most in-demand in Q4 2021. Yet, even as companies have begun raising wages and bolstering benefits, the pool of labor available to retailers continues to shrink – and likely won’t recover any time soon.
To fill the growing gap between understaffed stores and an increase in consumer demand, retailers are beginning to go beyond quick fixes to temporarily attract talent and turn to a more sustainable solution – technology. Specifically, NCR predicts retailers will prioritize and invest in technologies that power end-to-end store management, labor automation and alternative checkout options in 2022. These solutions will help enable the efficiency and productivity gains required to keep up with the ongoing labor crisis by allowing for staff reallocation, streamlined tedious operations, and less stress on the job for the current employees.
In the same vein, these technology solutions will enable employees to have higher-value interactions with customers to enhance their in-store experience. And shoppers can continue to enjoy their preferred shopping methods – which will often hinge on convenience – whether that’s in-store, contactless, buy online pickup in store (BOPIS) or online. This also fuels another trend we’ll see more of next year.
Micro-fulfillment will continue to transform stores
As consumers have increasingly welcomed the convenience and safety of same-day delivery and curbside pickup, retailers have homed in on improving their last-mile delivery capabilities. Individual stores have become fulfillment centers with pickers scouring the aisles for consumer orders. Larger chains with bigger budgets have added warehouse space to stores specifically for fulfilling online orders, or they have opened ‘dark stores,’ which are smaller fulfillment centers closed to the public but located closer to where customers live to enable quicker delivery and pickup.
Having the right technology has been and will continue to be crucial to efficiently manage micro-fulfillment. One key example is retailers looking for their own e-commerce fulfillment system that can seamlessly blend in-store and online experiences, as well as integrate with existing software, all while being consumer-friendly. For example, e-commerce platform Freshop provides a consumer-facing app and a fulfillment app that communicate seamlessly, allowing a frictionless ordering process for customers and a simple fulfillment process for pickers and delivery personnel.
Another technology transforming micro-fulfillment is automation. For example, Walmart is adding small fulfillment centers beside their stores that use automated bots to retrieve goods for online orders. Some of these fulfillment centers will also have automated pickup points for customers and delivery drivers to quickly grab orders. Additionally, Walmart now has fully driverless trucks that transport online grocery orders from a dark store to a nearby consumer-facing store for pickup.
Retailers will continue to use these technologies and more to streamline micro-fulfillment and last-mile delivery in 2022, but digital and automation integration don’t stop there.
Edge development and as-a-service will prosper
Once a luxury in-store, e-commerce-savvy consumers now expect the digital touch at every point in their brand experience – regardless of time, channel or location. To make matters more complicated, consumer buying behavior is constantly changing, making it unviable for retailers to simply set and forget. Whether it’s personalized loyalty notifications sent to consumers when they enter a store or frictionless check-out, delivering on these evolving expectations requires stores to create adaptable infrastructures that can continuously integrate and deploy new, modern capabilities and experiences.
And in 2022, NCR predicts more brands will beef up their retail edge and as-a-Service engagements to accomplish this goal.
Taking operations to the Edge allows companies to consolidate old computing infrastructure by virtualizing applications to not only drive operational efficiency, but also embrace new high-data, low-latency use cases that improve customer experience. The ability to deliver and manage applications with more flexibility on a lower cost curve is key.
Edge for retail will provide virtualization, containerization and automation by integrating in-store touch points, including front-of-store as well as back-of-store devices and associated peripherals, under an intelligent retail store architecture managed from the cloud. As a result, the devices and applications running the store become significantly smaller and faster, optimizing performance and giving retailers true agility, more capabilities, technology that is resilient to internet outages, and accessible data collected on-site.
To successfully integrate Edge and maximize its capabilities, smart retailers are implementing powerful endpoint devices that support the cloud such as tablets, in-store kiosks, and display screens. Critical, too, is strong connectivity infrastructure such as SD-WAN networks, which can enhance performance through greater uptime, end-to-end visibility, and reliable security that today’s retailers crave. But these implementations don’t need to be a cumbersome, rip-and-replace effort. Thanks to the shift towards as-a-Service platforms, retailers are expected to level up their existing infrastructure with tailored solutions for speedy deployments, efficiency and scalability.
Cryptocurrencies will become mainstream
Cryptocurrency has continued to pick up steam for consumers and the retail industry. According to one report, 14 percent of American adults currently own cryptocurrency and another 22 percent of Americans – over 50 million consumers – that have never owned cryptocurrency will likely buy in the next year.
To cater to these consumers, both retailers and payments vendors have added in-store and online capabilities allowing consumers to use cryptocurrencies like Bitcoin to make purchases. For example, Sheetz, a major Mid-Atlantic restaurant and convenience chain, became the first convenience store chain to accept Bitcoin and other digital currencies in-store and at the pump earlier this year.
NCR signed a definitive agreement to acquire LibertyX, a leading cryptocurrency software provider, in 2021, to give its retail customers access to buy and sell cryptocurrency, conduct cross-border remittance and accept digital currency payments across digital and physical channels.
This trend will continue into 2022 and beyond, as more consumers invest in cryptocurrency, and retailers continue to demand the latest in payments methods to cater to their customers.
“As an industry, it’s become abundantly clear that certain aspects of COVID-19 and our shifts to accommodate its impact will remain. Consumers are now shopping brands from a variety of channels simply depending on their mood and schedule, and retailers are expected to deliver on all fronts at any time,” said David Wilkinson, president and general manager at NCR Retail. “The most important thing retailers can do in 2022 to get on the offensive is to make strategic investments in technology, from micro-fulfillment to the Edge, that is cloud-enabled and ready to connect to retail and commerce platforms. It enables the adaptability that stores needs to be agile and respond to changing conditions fast. Because the only thing now certain in retail is that both consumers and the market are changing quickly, and we’ve got to be ready.”