Retail Automation: One of ISVs’ and VARs’ Biggest Opportunities
Retailers are searching for ways to draw consumers back into brick-and-mortar stores – and they’re looking for value-added resellers (VARs) and independent software vendors (ISVs) that offer the IT solutions that will help them achieve this goal. If there were just one factor driving change, it would be a worthwhile prospect to pursue. However, four macro trends are impacting the space, making retail digital transformation and automation a profitable opportunity for solutions providers:
- Need for business continuity: The COVID-19 pandemic proved that brick-and-mortar retailers need a digital strategy to ensure customers can continue to engage when normal operations aren’t possible. A McKinsey Global Survey revealed the percentage of digital customer interactions increased from 41 percent in December 2019 to 65 percent in July 2020. Furthermore, 62 percent of survey respondents believe new customer behaviors and expectations will continue. Those businesses are primed to deploy solutions, for example, customer service kiosks that encourage customer engagement when traditional brick-and-mortar models don’t work.
- Labor shortage: The U.S. Bureau of Labor Statistics reported 1 million retail job openings in April 2022. Retail automation can fill gaps created by the labor shortage and allow businesses to continue to operate and provide delightful customer experiences even when short-staffed.
- Inflation: From May 2021 to May 2022, the Consumer Price Index increased 8.6 percent. This represents the largest 12-month increase in more than 40 years. Retailers need to control costs, both to operate profitably and to be able to offer merchandise at a price point that their customers will accept. Retail automation helps keeps operating costs low while increasing profitability.
- 5G: Advancing technology is driving change. 5G’s speed, lower latency, and support for more connected devices will make Internet of Things (IoT), augmented reality (AR), and virtual reality (VR) more practical for tools to personalize customer experiences both virtually and in the retailers’ locations. 5G will also allow IT teams to maintain and update in-store systems over the air, minimizing disruptions and keeping the total cost of ownership (TOC) low.
New Opportunities for Retail Automation
Some automation has become commonplace in retail. For example, barcode solutions make inventory control, returns, and checkout fast, efficient, and accurate. Additionally, payments integration with point of sale (POS) technology eliminates manual data entry and quicker end-of-day reporting. However, retailers want more automation, and your industry knowledge and tech expertise can bring solutions like these to the market:
- Self-service: COVID-19 raised awareness of health safety best practices, such as maintaining a safe social distance and limiting interactions during seasons when respiratory illnesses are active. Intuitive touchscreen solutions allow consumers to find the information they need, order out-of-stock items, and manage payment transactions without interacting with sales associates.
Touchscreen kiosks running software, for example, to allow consumers to find a wedding or baby registry, order an item, or check out without the assistance of a cashier, benefit retailers by allowing them to decrease the number of employees scheduled for a shift. One associate can cover multiple self-service kiosks rather than scheduling one employee per checkout or specific customer services.
- Endless aisle: Supply chain slow-downs may mean that some retail locations may have fewer items on the shelves. However, the growth of e-commerce also means more consumers are used to interacting with retailers digitally. An endless aisle solution leveraging a touchscreen monitor, kiosk, or all-in-one system enables consumers in a brick-and-mortar store to find and order the exact items, colors, sizes, or styles they need from another location for in-store pickup or delivery to their homes. It can also allow the retailer to save the sale.
- Electronic signage and shelf labels: Manually updating signs and labels to reflect SKUs and pricing is labor-intensive and error-prone. Electronic signs, which can range in size from a few inches to a few feet diagonal, and electronic shelf labels streamline the process, require less labor, and enable centralized management so information and prices can be automatically and consistently applied. Grocers, who still often rely on paper-based processes, can see tremendous gains in efficiency with these solutions.
- Digital engagement: The increasingly digital-first culture also has retailers eyeing solutions that personalize in-store ads, much like online pop-up ads. Retailers can deploy Digital Out-Of-Home (DOOH) solutions to recognize consumers based on demographics and the merchandise they’re interested in and display relevant offers. For example, when a 5’ 11’ male in the golf department of a sporting goods store triggers the solution’s touchscreen display to make offers for clothing or clubs that the shopper could use or enable interactions that allow the shopper to choose to learn more, browse products, or call for assistance.
- Wayfinding: Interactive digital signage can save consumers and sales associates time to locate the items they need. Wayfinding signs can display locations in a mall or shopping center, allowing shoppers to select a store to learn more about it or help customers in a superstore find the department they need. Navigational kiosks can also better direct consumers to the stores where they want to shop.
- Upselling: People can forget to upsell, but technology won’t. ISVs and VARs can provide retailers with solutions that automate upselling and deliver a higher return on investment (ROI). Each time a consumer uses a touchscreen solution to place an order or check out, the system can offer to upsize the order or add complementary items, boosting revenues. The average per ticket price increase is around 18-26%, with upselling on a touchscreen solution directly benefiting retailers.
Overall, automating tasks results in greater convenience for consumers and more efficiency, accuracy, cost control, and decreased demand for labor for retailers. ISVs and VARs can also show their clients how to increase the value of automation by using data from the digital solutions they deploy to understand their customers better, target marketing, and ultimately, improve the bottom line.
Yours for the Taking
VARs and ISVs who are skilled problem solvers can package solutions that address today’s retail challenges. Tailoring solutions specifically to retailers will continue to assist them in operating short-handed, increase efficiency, control variable costs, and keep up with customer expectations – and most importantly, provide a competitive edge over merchants who aren’t as willing to change to new market trends.
Choose your market, focus on its needs – whether the aim is to build advanced, cashierless environments or take first steps toward digitized operations – and build total solutions that solve your markets’ pain points through automation.
About Tyler Wells
Tyler Wells is the North American Sales Manager for MicroTouch. Since joining the company in July 2021, his focus has been on developing sales and implementing the US distribution strategy. He brings over 14 years of experience in the built-for-purpose computer hardware and sports entertainment industry. Prior to joining MicroTouch, Tyler served as the Global Distribution Sales Manager and Manager of Business Development at Mimo Monitors, Marketing and Business consultant for DYT Solutions, and Inside Ticket Sales for Red Bull. Tyler has a degree in Marketing Management from the University of Wyoming.