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Exclusive: The impact of digitalisation and automation on the retail industry

Thu, 14th Feb 2019
FYI, this story is more than a year old

Recently IT Brief had the opportunity to talk to both Zebra's regional Director of ANZ Tom Christodoulou and MyChemist director Mark Finocchiaro about how the retail industry is changing to meet modern consumer demands.

To start off with can you tell me a bit more about yourself and your experience in the industry? 

Tom: I am the ANZ Sales Director - General Manager at Zebra Technologies. I've been in the IT and services industry for over 20 years and have worked with brands like Motorola and Invenio.

Mark: I am the Managing Partner - Director of the My Chemist / Chemist Warehouse Group. I am a pharmacist, proprietor and end consumer of all our I.T. platforms and have worked within the group to develop technology and operating procedures to better serve our business for over 22 years.

How do you think the Australian retail industry is changing with digitalisation? 

Tom: Digitalisation has certainly made shopping much more efficient and enjoyable for consumers, but the flipside of this is that there's an increasing demand for businesses to differentiate themselves by offering a superior shopping experience.

Bricks-and-mortar retailers are now expected to have instore ordering options and real-time access to stock levels. Customers wanting an out of stock item anticipate the store to provide alternative options for purchasing, such as ordering online or showing inventory elsewhere. As such, many retailers are looking to empower store associates which technology like smartphones, pricing guns, and two-way radios.

This also means that there's a stronger focus on customer data and insights – and this is something that we're clearly witnessing in the Australian retail space. Australian retailers are expected to tailor the customer experience to the individual and this is something that's only made possible through actionable data.

Mark: For us, the process of digitalisation has helped increase the accuracy and efficiency of our sales and stock. With the latest technology enabling greater mobility and data accuracy, we can be a lot smarter and efficient in how we run store operations and customer engagement.

For example, our staff are empowered with handheld devices allowing full inventory management and tracking, integrated back to our POS systems and associated logistics platforms. A holistic overview of inventory and management empowers our staff to better deliver to our customers. Furthermore, this same platform can then be extended to include communications, product information and task management, allowing our staff to spend more time with customers and assisting them with their needs.

Increasingly, customers demand frictionless retail experiences. The lines between online and offline retailing are blurring and customers expect that all the functionality, ease of use and immediacy that exists online is replicated offline. The challenge for retail is to be able to meet these needs ahead of the customers asking for them.

We aim to be able to meet these challenges and allow customers to take them for granted, allowing them to simply enjoy their shopping experience in the most efficient and convenient way possible. However, often there is great complexity in making something simple, so we turn to our partners and vendors to assist us in building these platforms.

What are some of the key findings from the Global Shopper Study, and the trends that are resonating with the Australian retail industry? 

Tom: According to Zebra Technologies' annual Global Shopper Study, only 13 per cent of shoppers trust retailers with their personal data - the lowest level of trust out of the 10 industries included in the survey. The study analysed the attitudes, opinions and expectations of shoppers, retail associates, and decision makers.

Other key findings include:

  • Only 13 per cent of shoppers trust retailers to protect their personal data; 73 per cent of shoppers want greater control of their data

  • Nearly 80 per cent of retail decision makers believe that new technologies are making staffed checkouts unnecessary, in comparison to merely 49 per cent of store associates who share the same sentiment

  • 66 per cent of associates believe they can provide a better customer experience if equipped with tablets

How can vendors and businesses promote and restore consumer trust? 

Tom: Australian consumers are increasingly concerned about how their personal data is being managed – and rightfully so. Against the backdrop of the Royal Commission, and the various data breaches that occurred last year, consumer trust is quite low.

For Australian retailers to promote and restore trust, the onus is on businesses to showcase that they take data security seriously. The emphasis isn't on preventing every single data breach (this isn't something that even major security companies can claim with 100% certainty) but to highlight to consumers that this is indeed something retailers are taking seriously and are taking active steps to mitigate, such as encryption and increased data security etc.

Mark: Transparency is key in restoring consumer trust. We're at a stage where consumers realise the value of their personal data and want greater control of how it's managed. By providing consumers with more options of how the data is used or managed will give them greater peace of mind.

As an organisation, we invest heavily in all areas of security to protect customer and patient data and privacy. This investment is across the entire I.T. infrastructure from networks, computers and devices all the way to staff training and awareness. We have adopted a ‘we can't be too careful' approach to data security and are now working with our vendor partners to raise the standards across our industry. Consumer trust is enormously important in particular in our industry and more broadly around health. Adopting a best in breed philosophy to security, working with leading partners in the industry and continually working to improve how we manage and protect customer privacy and data is a fair expectation that customers have on major retailers.

Why is there a growing shift in the retail industry towards automated checkout processes? 

Tom: Customer expectations have been shaped by the online experience which is pushing the shift towards automated checkout processes. The online customer experience has also emphasised the importance of a seamless and frictionless experience – which is what an automated checkout process is looking to replicate.

This trend is something that a lot of retailers are implementing with large grocery retailers installing self-checkout to a lot of their stores. Some retailers are also experimenting with the concept of ‘no checkouts' in which consumers can just walk in and out with their items of choice.

Mark: The appeal of an automated checkout process is that it empowers staff to focus on other aspects of the customer experience. One of the biggest pain points that are often raised in our stores is that shop associates don't have the resources to focus on customer service. By shifting the repetitive tasks away, retail associates are freed up to focus on more high-level tasks and serve customer needs appropriately.

However, we are mindful in finding the right balance when it comes to the automated experience. On one hand, we want to facilitate the most efficient way for customers to pay for their goods. But we need to ensure that there is still ample opportunity for customers and staff to engage in a meaningful way to ensure they receive the highest level of service and care without pushing all transactional work directly back to customers.

Retailers must be careful that they do not force the customer to work for them. Forcing a customer into automation may have the opposite desired effect. Finding the balance and supporting what suits the customer best, perhaps more a hybrid model, is a better approach as this technology matures and customers better define which experience they prefer, on their terms.

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