Here’s RSR’s List Of Hot Topics For 2023 – What Are We Missing?
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RSR has been benchmarking retailer attitudes about the challenges and opportunities that they are managing through in the marketplace since 2007; in fact, we’ve conducted about 150 benchmark studies over our last 15 years together. As luck would have it, that span of activity has coincided with an era of tumultuous and unprecedented change throughout the extended retail industry, and virtually none of the business processes that comprise a typical retail operation have been immune to those changes.
At the heart of it all is the dramatic digitalization of everything in the world today, i.e., for every physical thing or process, there is a digital equivalent. The net result of that reality is that virtually every process in a retail business has sped up to a remarkable degree.
But the elephant in the room of any discussion about the changing retail environment is the fact that consumers now routinely use digital assistants to shop. Smart phone penetration throughout the world is astounding; for example, in 2021 over 82% of the US population had a smartphone, while the UK saw an 80% penetration, and France and Germany reported a 79% penetration. In practical terms that has meant that retailers can no longer depend on demand to always be triggered in a store – consumers can initiate a shopping journey anytime and anywhere. Likewise, that demand can be fulfilled in one of several ways: in a store or shipped directly to a consumer either by the retailer, the manufacturer, or a third party – or some combination of methods.
These two megatrends (the digitalization of everything, and consumer adoption of smart mobile devices) have complicated how retailers bring demand and supply together, and the supporting technologies are vastly different than what most retailers have employed in the past.
What this all means to RSR benchmarks is that nothing is static – everything is fair game, and that can be overwhelming! So, to get a focus, the RSR team queries our contacts throughout the industry to arrive at a subset of possible topics to explore in the coming year. Below is our list, along with a brief explanation of why each subject is so important:
The Transformed Store
RSR has conducted a store-oriented benchmark in every year we’ve been in business. But the role of the store is changing fast. Once, the store was the nexus of all retail activity; it was the one place where demand and supply came together. That is no longer entirely true; the new role of the store is to be one component of a selling environment that includes several consumer touchpoints (the store selling floor, eCommerce, mobile, social, etc.) and many ways to fulfill demand. That has triggered big changes in instore processes and supporting technologies.
The Agile Supply Chain
In 2015, after having focused on the changes in the consumer facing side of the retail business triggered by consumer adoption of smart phones, RSR declared the retail supply chain to be “the next big thing.” What an understatement! Retailers and their trading partners are challenged today to better balance the need for a highly efficient supply chain and the need for greater agility and flexibility. A huge part of that is the ability to see flow of goods in real time as well as the ability to model alternative scenarios to mitigate risk.
The Transformed Workforce
In RSR’s 2022 benchmark on the state of the retail workforce, we highlighted that the incoming labor pool has a far different perspective about what a “good” job is. We also highlighted the impact of new customer expectations on what and how work needs to be performed, particularly in the store. At the intersection between employee and customer expectations is a new generation of technology-driven capabilities. Employee enablement to meet those expectations is still in its early stages, but retailers know they need to address the challenges while still holding down labor costs.
The Role Of Analytics To Optimize The Business
Three dynamics are triggering big changes in how data analytics are used in the retail industry. First, there’s an explosion of non-transactional data sourced from both within the enterprise and from the outside world that can alert retailers in real-time changing conditions in the supply chain, the marketplace, and in internal operations. The second is the infusion of insights derived from those data and advanced analytics to help operators respond quickly and effectively to changing conditions. The third is the automation of operational decision making as a response to changing conditions. Retailers are just learning how important the new insights that advanced analytics can deliver are.
What Commerce Looks Like Today & Tomorrow
Consumers don’t see “channels”. For them, retailers are either trusted problem solvers, or they are irrelevant. Consumers expect far more than a good in-store assortment offered at low prices and an easy checkout. Now, retailers must consider customer “omnichannel” order management, different fulfillment strategies, direct-to-consumer “last mile” optimization, returns handling, and the rise of sales from new social, video, AR, and “meta” environments. Consumers expect these things to work together seamlessly – and they are unwilling to pay more for the resulting additional complexity that retailers must manage. Are retailers ready?
Digital Transformation Of The Retail Business Model
The idea behind digital transformation is that everything physical can have its “digital twin”, and those digital twins can be observed and analyzed in ways that make it possible to hyper-optimize business processes. Retailers are late to the digital transformation agenda – is the concept even applicable? And which business processes are the best candidates for digital transformation strategies?
Resiliency & Sustainability As A Business Strategy
Some leading retailers like IKEA, Starbucks, Walmart, and Eileen Fisher, have begun to embrace strategies that can help them to mitigate the effects of climate change on where and how they source products, while meeting the demands of consumers who are growing increasingly aware of the environmental impacts of the products they buy. To what extent are retailers thinking about the challenges and opportunities associated with business resilience and sustainability? What information, technology, and processes do they need to address those challenges and opportunities?
The Future Of Consumer Engagement Platforms
With so many consumers beginning their shopping journeys in the digital space, retailers and their marketing partners are challenged to generate consumer demand by delivering content and value propositions that are relevant, consistent, attractive, and compelling. Technology companies are promoting content management, digital marketing, and search optimization technologies merged with customer analytics to enable a coordinated presentation of personalized products and value to consumers. Is this just the latest example of solutions looking for problems, or are retailers looking forward to addressing real world challenges with the new capabilities?
What Are We Missing?
The RSR benchmark agenda in 2023 will cover these topics – look for an announcement of our webinar to reveal the batting order for RSR’s 2023 benchmark agenda, scheduled for February 2 at 2PM EST. But before then, we’d love some feedback: what are we missing? What challenges and opportunities are retailers grappling with that you’d like to hear more about?
Please give us your thoughts by dropping us an email to ‘mailto: firstname.lastname@example.org’.
Of course, if your company would like to work with us to develop a research project around any of these subjects, reach to our business development manager, Linda Wolfe.