3 Tech Lessons From the Retail Industry
We live in the information age and lie on the cusp of the next dramatic shift in humanity’s future.
Modern information technology, not unlike the industrial revolution and assembly lines in the automobile industry, is causing disruption and job displacement.
Though it isn’t immediately clear or intuitive, advancements in technologies like robotics and artificial intelligence are affecting shifts in the retail industry that many experts have dubbed the retail apocalypse.
Naturally, transformation and continuous improvement are necessary for the survival of any business.
Take the car industry, for example.
Henry Ford was on the forefront of disruptive changes and strides and has adapted and made his business successful. He also forever changed the car industry – those who didn’t adapt and accepted the improvements he made soon closed shop.
Technology acts as a catalyst for natural selection – this is especially true in the retail industry where those who wish to succeed have only two options: They will either adapt to the modern shopping environment or they can close their doors.
Whether you like it or not, Amazon has been teaching a tough lesson in the retail space for years now.
Retailers have been dropping like flies as Amazon gains more and more market share in a variety of industries.
And even though it’s counter-intuitive, two key drivers of Amazon’s growth and its effect on retail displacement are robots and artificial intelligence.
No, we don’t mean that sentient kiosks or humanoid robotics clerks are running the retail industry.
However, through Amazon’s expansive network of fulfillment centers, robots, and artificial intelligence are becoming more efficient than ever before.
As more customers shop online to have products delivered to their doorstep, their purchase hinges on an underlying infrastructure of technology, as opposed to human interaction at a retail point-of-sale (POS).
It’s no secret that Amazon has been putting many brands and physical retail locations out of business for years. However, most people don’t understand that technology is the key driving factor of this disruption.
With the expectation of Amazon’s burgeoning drone and robot delivery systems, the displacement is expected to widen to delivery jobs too.
2. Time, Shipping, and Convenience
Believe it or not, most humanity has access to the Internet. And a large chunk of the current workforce, and all children in developed countries can’t imagine a world in which the Internet does not exist.
Many people are used to having information and products right at their fingertips.
Google’s primary concern with its search engine is to provide the best user experience possible, whether its customers are aware of this or not.
If a website takes more than a few seconds to load, users get irritable. This acclimation customers have towards getting what they want as soon as they demand it echoes throughout the retail world.
In eras past, customers would have to wait days – or even weeks – for an ordered product to arrive at their home. In these times, it was quicker and more convenient to visit a brick-and-mortar store to make a purchase.
However, modern customers find it more convenient to shop online because of one-day and two-day shipping.
In fact, sometimes, online retailers can provide same-day shipping. Technology has shortened delivery times so much that many customers find it inconvenient to visit a store and make purchases in person.
3. IoT and Machine Learning
If you thought people were the only things making intelligent purchasing decisions, think again.
IoT, or the Internet of Things, is rapidly affecting change in the retail landscape.
The main concept of IoT is that there are more things (e.g. electronic devices) connected to the Internet than people.
Emerging technologies driven by IoT and machine learning help provide customers with information that better informs and guides purchasing behaviors.
Just look at any new home appliance that is labeled a smart-device.
For instance, consider a refrigerator that, through the Internet and a smartphone application, communicates to its owner what items to purchase at the grocery store.
As time marches forward, we expect more devices to share Internet connections to provide us with more data.
We also expect those devices to become more sophisticated and refined with the advent of narrow (and perhaps even general) artificial intelligence and machine learning advancements.
Astoundingly, the IoT market is projected to reach over $1.1 trillion dollars by 2025, which is less than a decade away.
Given the boom of big data and the projected growth of the Internet of Things, we cannot ignore these trends.
If you don’t offer customers a means of making purchases from your business online, you’re missing out on massive chunks of revenue.
Even if you don’t have the wherewithal or skills to set up an e-commerce site, you do still have options.
Even though small and medium-sized businesses frequently demonize Amazon for hurting their revenues, Amazon offers online retailing opportunities.
If you need an outlet and means of retailing products online, selling your products on Amazon is a viable channel to reach untapped streams of online revenue.
Contributed by Jen McKenzie who is an independent business consultant from New York. She writes extensively on business, education and human resource topics. When Jennifer is not at her desk working, you can usually find her hiking or taking a road trip with her two dogs. You can reach Jennifer on Twitter @jenmcknzie.