Technology is revolutionising retail – but are retailers ready?

Retailers can’t afford to let their technology needs distract them from their main business goals. So, how should they proceed?

When consumers are browsing the shelves at their local supermarket, they don’t consider the intricate supply-chain logistics behind what’s on display. They just want to make a tasty dinner.

Similarly, the retailer’s focus is on providing the best possible consumer experience and selling those dinner ingredients instead of worrying whether their cash registers and security cameras will connect to their network every day, or whether their data is protected from cyberattacks.

IT spending in the retail market – including on security – is expected to rise to USD 9.1 billion by the end of 2030 at a compound annual growth rate of 8.4%.

Add to that the adoption of game-changing AI technologies – including GenAI – for retail forecasting and trend analysis, fraud detection, customer chatbots and more, rising volumes of data to be converted into insights on business and operational efficiencies, and the ongoing migration to cloud, and it’s clear retailers have plenty to take care of when it comes to IT.

Technology is changing retail for the better

Let’s look at five examples of how new technologies are changing the UK retail industry:

Smart-shelf technology: Advanced sensors and IoT devices are being integrated into store shelves to provide real-time data and analytics about product inventory, pricing and customer behaviour. For example, smart shelves can automatically detect when products are running low, send restocking alerts to store employees and update prices in real time.
Item-level radio frequency identification (RFID): Using RFID tags can enhance the customer experience in stores, make inventory tracking and management more efficient and strengthen antitheft and other loss-prevention measures. Imagine connected fitting rooms that know instantly how many items a customer is holding.
Immersive experiences: Technologies such as augmented and virtual reality are now forming part of unified commerce platforms – comprehensive software solutions (used by more than 60% of retailers globally, according to IDC) that integrate sales channels, customer touchpoints and backend systems into a single platform. Customers can use these technologies to try on clothes virtually, walk through a virtual showroom or see how furniture or decor items would look in their own homes.
Industry cloud platforms: Retailers are turning to industry clouds – specialised cloud computing platforms that cater to the needs and requirements of a particular industry – to ease supply-chain planning, demand forecasting, digital commerce activities and more.
Sustainability: According to Deloitte, 53% of CXOs in the consumer industry are already using energy-efficient or climate-friendly technologies as part of their sustainability efforts – for example, to reduce carbon emissions in their supply chains, digitalise paper-based procedures and deploy smart energy-management in their stores and warehouses.

New challenges

While these are all valuable use cases, each needs an IT strategy aligned with a retailer’s overall business strategy – which also considers the skill sets required for installing, maintaining and upgrading the technology.

That’s already likely to sound daunting to most retailers – and we expect AI and IoT to play increasingly pivotal roles in this industry. IDC expects that by 2027, 95% of retailers will have tested or invested in GenAI to enhance their product data, customer support and customer experience initiatives.

So, how do retailers deal with the rapid digitalisation of their industry without neglecting their overall business goals?

The power of partnerships

The answer lies in partnerships. Experience and expertise in managing IT in the retail industry are key considerations for retailers looking for a reliable partner to support them on their transformation journey.

Equally as important, when retailers are selecting a service provider, they should choose one with a range of service offerings and a collaborative approach that will help them scale their business effortlessly through proactive support. A critical area of expertise should be data security – especially in retail, where large volumes of customer data must be secured.

At NTT DATA, we offer an ecosystem of key partners to support retailers in doing what they do best – selling! We work with a number of retailers across key infrastructure and application-based projects that allow us to do what we’re great at.

Retailers trust NTT DATA because of the breadth and strength of our solutions that support their business challenges and their transformation into retailers of the future. With more than 190,000 employees in over 50 countries and regions, we offer the expertise, services and infrastructure needed to transform our retail clients’ businesses globally.

Read more about NTT DATA’s Connected Retail services to see how we can give your organisation a competitive advantage.

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