Technology tailwinds

  • Technology tailwinds: How and why retailers are transforming into technology firms in 2020

    It seems all leading retailers are doing it – slowly, but surely morphing into technology companies. Online fashion retailer Zalando has publicly stated it wants to become the Spotify of fashion, John Lewis & Partners is working closely with a robotics company to harvest crops for its Waitrose stores and the second-hand clothes sector is set for a boom thanks to the rise of digital marketplaces. So, what is driving this increasing demand for technology, what form is it taking and what are the benefits for both retailers and their customers?

    There’s a long list of trends that are set to drive increased tech adoption in 2020, with virtually all of them made possible by digitised value chains and the proliferation of data. Swathes of individualised customer data is making personalised shopping experiences, such as clienteling, a reality, while customer demand for increasingly fast and frictionless interactions is pushing tech-driven customer-centricity to the fore.

    Meanwhile, in the retail back office, technology such as artificial intelligence is helping to automate labour-intensive repeatable tasks such as merchandising, pricing and promotions. This is liberating store staff, enabling them to spend more time selling to customers.

    Expanding the definition of retail

    The result is that successful companies are using tech to expand the definition of retail. This approach is enabling firms to broaden their offerings and experiences across new locations, channels and moments across the customer journey – fulfilling real customer demand.

    For example, retailers such as Wingstop and Applebees are partnering with General Motors and its Marketplace app to enable in-car purchases for 4 million car owners in the US, while Lufthansa has worked with the REWE grocery chain to offer in-flight shopping for its customers, so their kitchen isn’t empty when they return home. Or consider US DIY retailer Lowes which uses an AR to guide customers around its store and describe product features.

    Retailers are also focusing on lifestyle with John Lewis & Partners providing a concierge service to connect consumers with its classes on topics like hair dressing and tech training, and Toyota has tailored its car-sharing service to incorporate nearby activities and experiences.

    Employing tech experts

    Retail’s transformation would not be possible without a significant sea change in culture and hiring habits. This can be summed up by retailers like Ocado, who now employ more than 1,300 tech engineers to develop its Smart Platform warehousing and logistic solution which it has licensed to Kroger and Coles in North America.

    Other examples of retail’s digitisation include the new CTO of Tesco, Guss Dekkers, who previously worked at Airbus, Continental and Volkswagen. Dekkers has been given the remit to “translate rapidly evolving technological and digital capabilities into innovative retail solutions”. Tesco’s Clubcard loyalty app has been digitised, allowing customers to redeem vouchers using their smartphones. Shoppers can also pay for groceries and collect Clubcard points simply by scanning a personalised QR code in the Tesco Pay+ app.

    What tech do customers want now?

    So, what are the technologies that customers want to see introduced into their shopping experience right now? In-store tech that eliminates unnecessary queuing is the most likely to enhance bricks-and-mortar experiences for consumers. A recent report carried out for RetailExpo reveals that at 52%, queues remain the biggest source of frustration for in-store shoppers.

    Self-checkout options and ‘scan and go’ capabilities, where customers can scan an item and automatically pay, were the other top two technologies that would improve customer experience. 27% of shoppers said self-checkout would improve their in-store experience while 34% called for scan and go smartphone apps.

    Meanwhile, 28% of customers want faster ways to pay in-store that replicate the friction-free purchases now available online from the likes of Amazon. Queue-busting is something for both technology and design companies to work hard on, judging by shopper demands for seamless in-store encounters.

    When considering online technology, consumers’ standards are high, with 31% abandoning their purchase and shopping elsewhere if a retailer’s site navigation is poor. More than a quarter (28%) of shoppers get annoyed when online checkout takes too long and a similar percentage (27%) are irritated if the online address and personal details capture process is too onerous.


    Forward-thinking retailers are embracing a growing variety of experiences, offerings and channels. They’re evolving away from a narrow set of offerings focused on a large, homogenous market and toward a wide breadth of offerings for an increasingly fragmented market.

    The result is a more exciting, more diverse industry in which retailers are constantly pushing the boundaries of what they offer and what they do…and technology is the key.