COVID-19 has accelerated many recent consumer trends. The Future of Retail-Tech: Emerging Landscape in Israel report from Deloitte discusses eight of them and how retailers and manufacturers can use technology to be future-ready.
The convenience and personalization offered by online shopping has driven consumers to steadily shift to digital. With COVID-19 imposing movement restrictions around the world, these behaviors have only accelerated. Businesses must rapidly adjust to these new consumer preferences — and the right retail-tech solution can help.
Contributing a substantial amount to these solutions, Israeli companies made up 12% of the global investment in retail-tech, with US$791m invested in the sector in 2019. In fact, Israeli companies were targeted in 11 out of the 20 retail-tech mergers and acquisitions in the past two years. These included Survey.com, which was acquired by Trax to address important merchandising needs in any physical store at any time.
The future of retail is driven by technology
In the Future of Retail-Tech: Emerging Landscape in Israel 2020 report, Deloitte Digital and Deloitte Catalyst set out to uncover the state of retail and discovered eight consumer trends — including one that has emerged as a result of the pandemic. The report also reveals the technology that can keep businesses from falling behind, including Trax’s industry-leading tools. Here are the trends, and their impact on businesses.
- Consumer loyalty is shifting
With smaller businesses now able to enter the market more easily, brand loyalty is less important to consumers than the shopping and channel experience. Retailers need to provide customized experiences to get noticed amid the noise.
- Digital success comes at a cost
The growth in competition has led businesses to spend more on advertising, often outpacing sales. For profitability, brands must focus on making ad spend more efficient — and technology can do exactly that.
- Physical stores are evolving
Brick-and-mortar stores are getting smaller and offering new services as part of the e-commerce value chain. To stay relevant, stores can moonlight as fulfillment centers, or be part of omnichannel experiences like showrooming.
- Dynamic business models are the new norm
The binary choice between physical stores and e-commerce is no longer enough for consumers. Their preference for convenience and flexibility requires businesses to explore options like: social shopping; buy online, pick-up in store; delivery lockers; and similar alternatives.
- Convenience is king
Whether online or in-store, convenience drives sales. Making products and services available to consumers anytime, anywhere is key. For physical stores, this could mean rethinking shelf space and keeping them stocked, while for digital it means better tools for discovery and flexible delivery methods.
- Consumers are becoming conscious about health and sustainability
The gradually growing market for healthy and sustainable products has spiked as people become more aware of the importance of self-care during the pandemic. However, this trend currently exists among higher-income groups. Brands can appeal to a larger base by making the value chain more sustainable and affordable.
- One-stop shops are gaining popularity
One-stop shops — both physical and online — are popular choices for ease and convenience. At the same time, smaller players are gaining market share because of low barriers to entry. To thrive, businesses must ensure their presence with large retailers and online marketplaces, while differentiating themselves from the competition.
- Supply chains face increasing volatility
One trend emerged specifically on the back of the pandemic. Movement restrictions caused supply-chain volatility in the form of labor shortages and shipping disruptions. The unpredictability of supply was compounded by fluctuations in demand. These changes show that rather than relying on historical data, supply-chain decisions must be made in real-time with flexibility for changes.
The way forward for businesses: Physical retail presence is still key
These trends point to the exponential growth of digital, but also highlight its challenges. Brands must therefore maintain their presence in physical stores to make the most of both online and offline experiences. However, in an environment where consumers are brand-agnostic — 46% of consumers are more likely to try new brands than they were five years ago — making their presence felt in physical retail stores is harder than ever for manufacturers. It’s not enough to simply be present in the largest stores; brands must also avoid the problem of low on-shelf availability (OSA) caused by poor replenishment practices, inaccurate forecasting and ordering, and improper planning and management.
The Deloitte report points out how these issues can be resolved with the right inventory-management tools provided by Trax. Trax’s research indicates that bulk purchases have increased, and the movement of goods on shelves is so rapid and unpredictable that data on out-of-stock items or share-of-shelf becomes obsolete far too quickly.
With Blue Yonder and Trax’s joint solution Dynamic Workforce Management, retailers can get real-time demand visibility, as well as a experienced flexible workforce to solve rising issues quickly. For example, with Buy Online Pick-Up In Store (BOPIS), margins can be slim since there is an added resource that needs to pick up and pack the order as compared to an in-store purchase. Trax Flexforce can handle these picking jobs and protect profit margins for retailers — 1.4 million workers are available nationwide for any merchandising and fulfillment activity.
Similarly, to avoid issues such as loss of sales due to incorrect product placement on shelves or pricing errors, Computer Vision-powered Trax Retail Watch provides automated, continuous visibility of all the products on every shelf in the store.
Using technology as an enabler
Shifts in consumer behavior are here to stay — even beyond the pandemic. Businesses must therefore learn to adapt to stay in the game and, rather than viewing technology as a barrier, embrace it as the enabler it can be when used correctly.
Read the full report or contact our sales team to learn how you can perfect your in-store execution.
