Unsurprisingly, AI still featured heavily, but in a much more matter-of-fact way – there was the underlying assumption that everything is AI powered now, and people have moved on. By contrast, I didn’t see or hear a single mention of the Metaverse. Apparently, it’s just been buried, and everyone wants to quietly forget it.
Imagine I'm constructing a wordle to reflect my impressions off the back of the event: the following words would feature heavily.
Data
Cloud
Eco System
Complexity
Composable
Attention-span
Shrinkage
Loyalty
Basics
Sustainability
I’ll draw these words together into a pattern to show why the task faced by retail technology team is getting harder and why it’s more important than ever to bite the bullet on some of the large strategic decisions that many retailers still face. These include moving away from hard (and slow) to change legacy solutions, killing off the industry of manual processes based around Excel and getting to grips with data.
It feels like the breadth of retailing activity that retail technology teams are being called upon to support is mushrooming and this poses some real challenges. Much of this new functionality must be bought in and integrated with existing services. It’s more important than ever to be able to do this quickly and robustly, as there is far too much complexity to hold services together with sticking plaster and strings. The prize to miss is great too: being unable to join up the data collected through the full portfolio of retail services.
The first talk of the day was by Flooid, who provide what they describe as a unified commerce platform, explaining the benefits of Composable platforms for retail. The points made were very solid. Retailers, who are still mainly using on premise solutions, should migrate to the cloud, for the speed, flexibility, and abundance of off the shelf functionality that this brings.
Coupled with that, retailers who are stuck in a dead end with customised software packages that can no longer be upgraded need to make the investment to move a strong suite of solutions that are benefiting from healthy levels of product development funding and to allow users to embrace new technologies.
Adopting a service-based architecture and keeping functional extensions in an ‘extension’ layer will serve to further proof investment and enable pieces of the puzzle to be swapped out individually in the future. It’s hard to achieve this both technically and to obtain buy in and funding, but flexibility and the ability to quickly assimilate new technologies is an existential issue for retail businesses.
Data has been a strong underlying theme at this conference for several years, and 2024 was no exception. Chris Tyas participated in a fireside chat on the importance of trusted data for supply chain transparency. He explained the importance of standardisation in measurement - e.g. all farmers measure their carbon emissions in the same way, or how sustainability information would be captured into QR codes displayed on products. This information is something that consumers and legislation will increasingly demand and is another complexity for retailers to deal with.
The bottom line is that transparent, trustworthy, data empowers consumers to make decisions.
Data was also in the spotlight in a talk by GK Software’s David Wenzel, about AI driven dynamic pricing. The main thrust of his presentation was that pressures on retailers are making the ability to price dynamically increasingly important. For it to work well though you need to bring together data about customers, products and product interactions, costs, inventory, store and web sales history and past pricing decisions.
Many retailers still use spreadsheets to set pricing and there isn’t always a lot of science behind this. Not only is this imprecise but it also makes it hard to capture information about the rationale for pricing decisions so that rules can be refined and improved over time. David also took the brave step of suggesting there were some circumstances where retailers could charge more than the RRP, if the customer was still going to perceive value in that context.
He used “SPICE” as an acronym to help retailers plan their first steps:
S - Select the right products - where price and perception aren't so important. (Use data to find products that are less price sensitive)
P - Price strategically
I - Interaction between products - need to plan for/monitor this
C - Capture and monitor revenue and margin
E - Exploit pricing insight for further products/categories
Esprit gave an illuminating talk on the opportunities of in-store screen networks. This is another technology that retailers need to master but industry analysts believe that there will be a global $100bn of revenue for retailers annually from retail media networks. A key take-away from the talk was that retailers need to become experts in curating the display of this information. There’s a real risk that stores could become ugly and overwhelming if they're plastered with screens, leaving them looking like a used car magazine from the 80’s.
There’s a big data tie in here as well. The screens and technologies that can let you know about customers in the vicinity of a screen (and their purchasing history), enables very relevant content to be displayed. Right now there’s a concern that some of this will spook customers but over time acceptance may grow. The key messages, though, are that retailers will gain a large revenue opportunity by installing a media network: still, the experience needs to be managed and the delivery of content needs to be informed by data and insight. A big bonus from this presentation is that I came away with a new acronym: ‘DOOH’ – Digital out of home media.
The final item I want to feature was presented by Christine Tutssel, co-founder of Axonify, specialists in Micro Learning platforms for onboarding new associates. Training and induction material is delivered via mobile phone and the idea is that just enough training is delivered just in time. On day one new hires are given the minimum to enable them to start work, be that in a store or a distribution centre, and then additional training is delivered day by day but in bite sized chunks with repetition and quizzes to ensure that the knowledge is retained.
Creating effective onboarding programmes has enabled retention rates through the onboarding process to be improved from 20% of hires to 80% of hires for some retailers and there’s a smart twist that helps with long term retention. Axonify have coined the phrase “Ever-boarding”. They use their micro learning platform as a way of maintaining ongoing employ engagement and of keeping knowledge fresh. For American retailer Giant Eagle overall attrition was reduced from 60% to 30%.
The Axonify proposition was extremely simple and extremely powerful. The payback from implementing something like this, in the right way, would be huge. There’s great opportunity here to collect and analyse data to improve the effectiveness of training materials and also to identify who your experts are, for budding up new starters. They have taken the basic process and provided the means to execute it very well.
Loss prevention was another area of focus this year, with rising retail crime. Just looking at the headlines it’s another area where technology teams will be called on to swing into action, if they haven’t already.
If you'd like to know more about how, at Transform, we support the digital transformation of the retail tech space, drop us a line at transformation@TransformUK.com and Derek or one of our experts will be happy to answer your questions.
