Retail Industry Transformation: Challenges and Answers

There is no business that has been challenged to transform and adapt more in such a short time over the past few years than the retail industry. And yet most of the transformation remains ahead, including the challenges that come attached.

Retail has been at the epicenter of a series of events and factors meeting at an intersection where some of them fiercely collide with each other as well as with lots of existing practices:

—      Rapidly changing customer preferences with expanding service gaps among segments (i.e. Gen Z vs Baby Boomers)

 —      The rise of e-commerce

 —      Supply chain disruptions and increasing complexity (i.e. real-time management)

 —      A fast-moving payments landscape demanding flexibility and balance between new habits (i.e. BNPL, digital wallets, open banking) and local preferences

 —      The need for mass hyper-personalization

 —      The accelerating influence of embedded finance as a major business and monetization model

 —      The move from multi-channel to omni-channel

 —      The pandemic, which has greatly accelerated both the speed and the impact of the transition from all the above

In such an environment, many retailers have found themselves struggling not only to keep pace with all of these developments, but also to adjust, with most of them citing a common denominator as their main challenge: technology.

Technology in the sense of a core enabler to:

1)      Merge online with offline channels

2)      Integrate smart digital services

3)      Facilitate end-to-end customer journeys

4)      Establish advanced analytics for personalized offerings

5)      Upgrade support functions such as order management, logistics, HR, and finance

It comes therefore as no surprise that retailers of all sizes and sectors are looking for providers and solutions that will be able to help them not only to fulfil all these needs, but mainly to become partners in the transformational journey that lies ahead.

It is therefore interesting to see what it takes to be such a partner.

One of the most illustrative use cases comes from Huawei and their Huawei Cloud Smart Retail Solution, with the words Cloud and Smart being central to the success of their strategy to accommodate retailers’ needs.

The most interesting part of this strategy comes from the combination of cloud services, big data, and artificial intelligence under one platform with 3 main outcomes:

1.       The build-up of omni-channel online and offline solutions

2.       The facilitation of digital transformation

3.       The overall improvement of user experience

Three typical scenarios stand out:

1. Smart Store: Smart Store applies IoT, AI, and big data in retail stores to:

—      Improve the customer experience (visitor identification and smart guide)

—      Increase conversion rates (customer flow analysis, VR/AR, smart billboard, and cloud shelf)

—      Lower operational costs and boost efficiency (electronic shelf label, smart shelf, self-service checkout, and mobile payment)

2. Omni-channel Platform: It builds a unified platform to process and manage front-end and services, supporting retailers and both self-built back-end and third-party e-commerce platforms:

—      Online to offline

—      Complete PaaS for the platform

—      Huawei's practical experience, which builds a standard front-end architecture to quickly build sites globally

3. Smart Wi-Fi: It converges IoT and Wi-Fi, enabling industry digital transformation:

—      New Revenue Growth Point: The value of integrated offline merchant data increases while user locations form the basis for online marketing. The value of integrated online marketing data is improved by using user behavior data to guide traffic to offline merchants.

—      Shopping Experience: Professional network planning ensures mall-wide Wi-Fi coverage and strong network signal, optimizing customer experience. In-store navigation, reverse vehicle search, and personalized advertisements keep customers shopping.

—      Lower Operation Cost & Higher Efficiency: Electronic shelf labels and automatic update of commodity prices reduce workload by 90%. Smart purchase guides reduce labor costs by 80%.

Retailers are in need of an overhaul with technology at the driving seat. To successfully do so, they don’t need a provider, but rather a trusted partner. All-encompassing models (tools, processes and capabilities under one roof) like Huawei’s Smart Retail are surfacing as the winning recipe.

Link for additional info on Huawei Smart Retail: https://e.huawei.com/en/industries/retail