Human Capital Management Blog

Strategies for HCM Professionals

5 Trends Shaping Retail and Why All Employers Should Care #NRF16 (Part 1 of 3)


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By  John Orr, SVP of Retail, Ceridian

It’s that time of year; we reflect on what we’ve seen and learned over the past year as we look forward to what is to come. (And with Retail’s BIG Show happening, this exercise enables us to prepare and plan for success.)

Understanding the broader environmental shifts can shape our strategies and ensure we aren’t caught off guard. I’m going to highlight five trends retailers should keep in mind as well as insights all employers should consider to improve the customer and employee experience:

  1. Interconnectivity
  2. Omni-store
  3. Beacons and buttons
  4. Black Friday
  5. Personalization

In this post, I’m going to focus on the first two trends. Interconnectivity is a collective digital transformation which has been building over the last several years. Technology spending isn’t simply a nice-to-do, it is a necessity. Traditionally, retailers considered their spending across five distinct categories: in-store hardware, in-store software, marketing and operations solutions, supply chain systems and hardware, and loss prevention/asset protection solutions.

Among the leading retail executives Innovative Retail Technologies (IRT) surveyed, tech spending decisions are no longer being made in these distinct category silos. Instead, they’re being made by cross-disciplinary teams with a holistic understanding of their enterprise and Omni-channel goals.

This digital transformation and new purchasing approach is happening in the name of Omni-channel connectivity. Retail executives’ plans point to an all-out race to connect data from any and all channels to better serve the customer — and the business — wherever both are found. In the retail world this is often referred to as Unified Commerce with the goal of providing one version of truth for data pertaining to customers, products, pricing and sourcing.

Insight: Technology purchases should facilitate connecting data from all channels

I refer to the second trend as Omni-store because the physical brick-and-mortar store still plays an important role in the retail world even as online channels build. To truly be Omni-channel requires letting go of the legacy systems and practices, such as managerial accounting, and creating reward structures and measurements that don’t simply rely on the physical.  This trend ties closely to the first trend as interconnectivity really enables the procurement, sales and delivery or merchandise independent of channel. Here are a few considerations and facts supporting the Omni-store trend:

  • Inventory visibility. This year, nearly 62 percent of the IRT survey respondents claimed to have inventory visibility across all channels compared to less than 50 percent the previous year.
  • Order management. More than 34 percent of retailers intend to spend on solutions that improve inventory management through better visibility, and more than a third will invest in order management/fulfillment solutions.
  • Cloud solutions. Nearly 52 percent of retailers are actively moving apps to the cloud this year. Retailers, who were maintaining legacy systems and attempting excessive integration (or sometimes not integrating at all due to systems incompatibility,) regret their decision. Instead of improvements in customer experience and business efficiency, they suffered setbacks brought about by the increased complexity.

According to IHL Group analyst Jerry Sheldon, “With great last mile connectivity, broad functionality in suites available in the market place, and the general reduced integration points to manage, Cloud is becoming a very viable choice.” He notes that retailers like the more-frequent software updates and the ability to take a reduced role in managing IT systems that embracing Cloud enables.

 Insight: Software as a Service (SaaS) offers true advantages leading to better customer (and employee) experiences.

 Watch for part 2 of my blog post where I’ll discuss the trends of Beacons and Buttons as well as Black Friday. Until then, I hope to see you at the Big Show! You can find me at the Ceridian Booth #3642!

John Orr


John Orr is the SVP of Retail at Ceridian. Follow him on Twitter at @John_Orr. 

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