Loss Prevention Research Council Weekly Series - Episode 95 - Latest Retail Technology Study with Innovation Priorities for 2022
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
RIS News Store Experience Study – Moving Beyond the Chaos
https://risnews.com/store-experience-study-2022
Let me start this week with one of my favorite studies that comes out every year from RIS News on the state of retail technology deployments and investments. It’s called the Store Experience Study and the 2022 edition just published has the subtitle “Moving Beyond the Chaos.”
A few of the highlights this year:
- Retail sales in USA when comparing Q4 2020 to Q4 2021 grew an amazing 15.4%.
- Revenue growth for USA retail is projected to be a respectable 6.9% in 2022
- By channel for 2022, mobile commerce is expected to grow 9.3%, Desktop E-commerce will grow 8.3% and in-store sales will grow a respectful 5.7%.
For the first time in the past decade, store count growth is not expected to exceed 3.2%, and store remodels growth (3.5%) is expected to exceed store count growth (2.2%) for the coming year. This is due in part to the advancement and adoption of digital customer journeys (BOPIS, curbside, click-and-collect, etc.), as well as the more widespread adoption of self-checkout (respondents claim a 47% increase in use in the past year). Investment in stores tends to pay big dividends, and those retailers planning an increase in store count for 2022 are expecting their enterprise and store IT spends to be 24% and 39% higher, respectively, than those who do not plan an increase. Likewise, their expectations for annual sales growth in 2022 are 8.7% higher than those who are not planning a store footprint increase.
Interesting from this study is what retail industry leaders are doing. For this research an industry leader is a retailer that claimed a year-over-year sales increase of 10% or more. Leaders really shine when it comes to optimizing new customer journeys. For the traditional online transaction (buy online/deliver from a warehouse or DC), Leaders’ processes were 41% more optimized than all other retailers. The numbers for BOPIS (31%), ship from store (37%), and local store delivery (27%) were also impressive and exceeded all other respondent groups.
For technology that is currently in use, Leaders were 2.1 and 2.0 times as likely to have updated their POS hardware and software (respectively) as all other retailers. Further, they were more likely to have mobile for managers (107% more likely), mobile for associates (72%), and mobile POS (53%) deployed and functioning. Leaders plan to increase micro-fulfillment and robotics in inventory operations by 600% in the next two years. The data shows that more than 50% of Leaders will have geo-location for marketing within two years, and currently they are 193% more likely to be using it than Average retailers. Nearly half (47%) of Leaders expect to have 5G deployed in their stores in the next two years, which would reflect a growth of 852% from today. Finally, over the next two years Leaders are expecting 778% growth in the deployment of voice recognition for order picking.
The top 3 tech priorities for 2022 are:
- Upgrade CRM / Loyalty Programs (50%)
- Personalize Customer Experience (46%)
- Inventory Visibility ( 42%)
The top 3 emerging technologies for 2022 are:
- SD-WAN’s with 16% currently in use and another 17% deploying it in next 12 months.
- RFID with 14% currently in use and another 9% deploying next 12 months
- Microservices with 14% currently in use and 8% planning deployments next 12 months.
Early adopters of SD-WAN’s are reaping benefits, those that have it deployed have experienced 39% higher profitability growth than those retailers who have not.
Those that have RFID deployed place a higher priority on inventory visibility (10% higher), optimizing the digital journey for store fulfillment (10% higher), and personalizing the customer experience (35% higher).
For Microservices, Tier 1 retailers are leading adoption with 55% already having this technology in place.
The State of 5G
https://www.statista.com/chart/26954/5g-adoption-by-world-region/
From Statista, the latest data on where we are with 5G deployments worldwide. China leads the world with 29% of the technology deployed as a share of total mobile connections, excluding IoT. By 2025, the adoption rate in China will rise to 52%. North America is second with deployment in 2021 at 13% and by 2025 at 44%. Surprised that Europe is only at 4% deployment of 5G in 2021, but will reach 44% by 2025.
The World’s Largest Smartphone Markets
https://www.statista.com/chart/25207/countries-with-the-highest-number-of-smartphone-users/
Finally also from Statista, what were the three largest smartphone markets in the world in 2021? China again leads with 954 million smartphones in use. India is second at 493 million smartphones. USA is third with 274 million smartphones in use in 2021.
Again, this week was another reminder to engage with LPRC to understand and more importantly guide the successful adoption of these technologies.
LPRC visits Advance Auto Parts team in Raleigh! Retailer investment numbers are analyzed! In this week’s episode, our co-hosts discuss a new ransomware attack with unique demands, LPRC plans member visits, Social media spreads false information about war in Ukraine, and the censoring of social media in Russia gets a new twist.
Listen in to stay updated on hot topics in the industry and more!
