The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

Retail IT Spending 2018

Information is now at the center of what retailers need to be successful, thanks to revolutionary changes in how consumers shop. This puts technology in a central, critical role.

Read the full report here: https://www.rsrresearch.com/research/it-spending-in-retail-2018

Or read the eBook here: https://www.rsrresearch.com/research/2018-it-spend-ebook

Thank you again for reading our research.
Brian and Paula, Report Authors

Merchandising 2018: Moving Beyond Price

Research Overview

Many have been declaring the death of the merchant prince. Long supply cycles, fast fashion knock-offs, and the proliferation of private label make “copycat” product easy and quick to produce. This has been both a cause of, and an effect of retailers’ dependence on price as a driver of demand.Retailers claim they want to optimize their assortments, but it remains somewhat unclear what they mean.

Because merchandising and pricing are now so inextricably linked both organizationally and technologically, we have combined the two topics into one report.

Our 2018 Benchmark will seek to uncover how retailers are managing “optimization,” how they’re integrating art and science, and the impact on merchants as a whole.

Approach

RSR will survey retailers to gain an understanding of their current and emerging strategies for optimizing the merchandising function. Is the merchant prince dead? Is pricing the most important driver in optimizing assortments? What exactly does “assortment optimization” mean to retailers in the first place? The resulting report will examine the challenges, opportunities and technology enablers driving decision-making. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

Supply Chain Execution 2018: At the Speed of the Consumer

Research Overview:

Our hypothesis is that speed to customer/same day fulfillment/speed is retailers' #1 priority, followed by cost. Retailers are looking at forward-positioned fulfillment centers to facilitate same-day delivery as needed.

All options are still on the table: Same-day shipment, Same-day delivery, In-store inventory pick for consumer in-store pick-up, In-store reservation of inventory for consumer in-store purchase, and certainly online visibility into in-store inventory

We believe traditional problems still persist: too many slow movers/not enough fast movers.

We also recognize that localization is still hard to do; our data tells us that retailers recognize that localization sub-optimizes the supply chain.

The goal is clearly to increase service levels without over-investing in Inventory.

• Better Forecasting based on where demand is generated; Data from past promotions, Space data (shelf & fixture) for forecasting and replenishment, Automatic feeds of competitive data (pricing and promotions), Weather data, Sentiment analysis as an early-warning to sudden changes in demand, Trade area data such as new stores and events

• Visibility at every stage: System-wide inventory visibility, Visibility into vendor dropship inventory, Inbound to DC inventory or orders, DC available inventory, Online/Direct channel available inventory, Inbound to store inventory or orders, Store inventory levels, Store on-shelf inventory levels, Inventory in returns processing

• Technology’s Impact: Distributed order management/customer order management, Real-time updates to inventory from transactional systems, Store perpetual inventory management, Store picking & shipping of customer orders, Sourcing algorithms for locating the optimal inventory for customer order fulfillment, System-based methods of capturing missed sales opportunities due to local out of stocks, Item-level RFID, Supplier drop-ship management system, Modern granular supply chain analytics, Available to promise forecasts

We hope to find answers to these and other questions about how retailers are positioning IT in their businesses.

Approach:

RSR surveyed retailers to gain an understanding of their current and emerging strategies for using information and technology to enable their businesses. Questions we asked include: What are retailers’ most pressing information and technology needs? To what extent are past investments able to be integrated into new capabilities? Are new solution provider delivery options (like cloud-based micro-services, open API’s, etc.) helping retailers to afford the new technologies they need? What is the role of the CIO in the emerging technology-savvy retail model? What is the influence of new leadership on IT investment decisions, like the Chief Digital Officer and the Chief Marketing Officer?

The resulting report will examine the challenges and opportunities that are driving today’s technology investments.

Digital Selling

People can buy anything anywhere. So retailers need to offer more than just “stuff for sale”. How do the best retailers do that? How do they build something online that makes consumers want to shop with them – instead of their competitors?

• Is it all about price?
• Or are there things that matter just as much?
• We want to know about the value of speed... convenience... even, dare we say it: "fun"

To answer these questions, we need your help. Please take a few minutes to take our 2018 survey. It should take no longer than 10 minutes to complete. In exchange, we’ll send you a pre-release copy of the finished report.

Thanks in advance, and we really look forward to hearing from you.

Sincerely,

Brian Kilcourse and Steve Rowen, Report authors

Take the survey

 

 

The Future of the Store 2018: The Innovation Imperative

Research Overview:

The rise of online retailing has revealed one truth: retailers seriously need to refresh the in-store experience. Mall-based stores have every right to expect mall operators to draw traffic by turning the mall into more desirable and fun destinations. Consumers need a reason to come to stores beyond just a chance to touch and feel products.

This requires innovation and technology investment on the part of all involved. This innovation must go beyond self-service: people have demonstrated it’s more fun to self-serve at home. We know, therefore, that employees are a key part of the mix, and since one size does not fit every shopper, a certain flexibility in customer options. It also requires improved trading area analytics so that the right store model is placed in every new and existing location.

Our 2018 Benchmark will seek to uncover how retailers are managing the innovation imperative while keeping shareholders happy. After a history of under-investment in IT, faced by the continued explosion in digital sales, how much should they expect to spend to innovate in their stores? Can cloud-based technologies help? What do budgets really look like?

Approach:

RSR will survey retailers to gain an understanding of their current and emerging store innovation plans. We’ll learn what retailers expect from landlords and mall operators. The resulting report will examine the challenges, opportunities and technology enablers driving decision-making. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

Retail Innovation in 2018

Research Overview:

When Amazon opened Amazon Go, the company did not put into place any proprietary or innovative technologies that were not already available off the shelf to any retailer. So why did it take Amazon to invent and test a fundamentally different approach to food shopping – why didn’t any other food retailer come up with the idea first?

That question lies at the heart of the challenge facing retailers around innovation. It’s one thing to find new ways to make it easy for consumers to buy products. It’s something altogether different to fundamentally redesign the whole shopping process from top to bottom. Technology companies – which Amazon undeniably is – are far better at recognizing these opportunities than retailers.

Big retailers are responding, by opening innovation labs and investing venture funds in technology startups. But with the ultra-tight margins that most retailers face, investments into pure research & development are far out of reach.

Our goal with this research: to identify if retailers recognize their innovation challenges, and to identify what they are doing to overcome those challenges. Are they investing in innovation labs? Are they partnering with technology providers to reduce the investment required? Are tech vendors aligning themselves to retailers’ pain points?

Approach:

RSR will survey retailers to gain an understanding of their current and emerging innovation and R&D practices. Do they see the need to innovate? Do they perceive their tech vendors as partners in driving innovation? Are they organizing themselves to bring more innovation into their enterprises?

The resulting report will examine the challenges, opportunities and technology enablers driving innovation decision-making. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.

IoT 2018: Making Better and Faster Decisions

Research Overview:

In RSR’s 2017 benchmark on the adoption of Internet of Things (IoT) technologies in retail, we learned that retailers have high hopes for the ability for an IoT-enabled operational environment that will alert them in real-time to changing conditions throughout operations, to help them to understand why operational processes don’t always work as well as hoped and to continuously improve them, and to help them predict events before they occur in order to take corrective actions. In short, retailers want to move their operational processes from being reactive towards being proactive.

That’s a tall order for most retailers’ operational models, which are based on predictable decision cycles that are monthly, weekly, or daily. But retailers know that they need to close the gap between an event occurring (particularly in either the supply chain or the consumer-facing selling environment) and how quickly and how well they respond to it.

Our 2018 Benchmark will seek to uncover how retailers are using IoT and related data management and analysis tools to optimize their operational decision making.

Approach:

RSR will survey retailers to gain an understanding of their current and emerging strategies for optimizing their operations with IoT-based alerts. What conditions would benefit from real-time alerts? How would retailers’ operational decisions change as a result? Is the focus of real-time alerts primarily on operational excellence, or are there also opportunities to improve the customer experience too? The resulting report will examine the challenges, opportunities and technology enablers driving real-time decision-making. The results will be cross-tabulated to retailer year-over-year sales growth and gross margin trends to gain insight into those practices making the most difference to retailer performance.