Future trends in the retail industry

The dynamic environment and changes in consumer behaviour in 2020 have become the subject of numerous observations and analyses. The variable nature of these changes not only defines the current situation on the market but can also support trend forecasting for anyone who is interested in the future of the business. The VUCA world we live in, additionally changed and dynamized by the pandemic reality, exerts increasing pressure on technological progress, which has to respond to new expectations of customers and managers of retail chain stores across the globe.

Numerous reports and market analyses unanimously confirm that e-commerce is the watchword of the passing year. As indicated in the McKinsey report, the growth of the digital economy from January to May this year accelerated to a significant 18.4%, and is 2.5 times faster than the average growth in 2017–2019. The data is correlated with the results of another report „Omni-commerce. Kupuję wygodnie” (“Omni-commerce. I buy conveniently”), in which 72% of respondents declare they do online shopping – an increase of 15 percentage points, as compared to the data from a year ago.

Customers have changed their shopping habits, as well as the rhythm and form of shopping; they choose other forms of delivery than a year ago. There is a larger interest in shopping with home delivery or personal pickup. These changes are unstoppable, and they will continue. In Poland, the first acceleration of changes was visible after the limitation of trade on Sundays, but it was the pandemic that strongly pushed us forward. It is worth noting that despite the significant increase in online commerce, customers still want and need to visit real stores. We like to have a choice: buy on-line or go to the store. Personal visits to, for example, shopping centres have gained a new meaning: they are more appreciated and anticipated. The challenge for retailers is to increase business efficiency while providing consumers with a positive shopping experience. Customer experience will be one of the watchwords for the Facility Management market in 2021: shopping should be comfortable, safe, fast, tailored to needs, with a wide product selection, great and competent service, and preferably with several options of payment and delivery. Here, too, some dramatic changes have taken place – companies declare shorter delivery time, of even 1 hour for some items. Products will be shipped from stores located closest to the customer, which makes those stores local warehouses for e-commerce – says Marek Kwiatkowski, Commercial Director at Sescom SA.

Technologies supporting retail chains and customer service management

Omnichannel has been an important trend for some time now. We want to buy both offline and online, and to enjoy fast delivery at a convenient collection point. Customers count on professional service and high availability of products. This, in turn, requires efficient warehouse and inventory management and timely delivery logistics. 
Here, technologies might be of help by collecting and analysing data that will support decision-making processes in sales management and customer service. As experts point out in a report published by Transforma Insights, in 2019–2030 the number of devices connected to the Internet of Things in the world will increase from 7.6 billion to 24.1 billion,
and revenues will more than triple from USD 465 billion to over USD 1.5 billion. New technologies, especially IoT, and more specifically RFID, seem to be a response to the needs of the changing retail market.

A real omnichannel, without a noticeable border between online and offline – is another important trend, gaining in importance, and we expect it to continue in 2021. In my opinion, RFID is the future of all improvements in retail. RFID is a “21st-century barcode”, which helps us collect data, saves time, minimises the risk of errors and improves the customer service process. The code enables us to quickly access all information about the items available in specific facilities, to monitor the supply chain, which helps match orders for the quantity and types of products to the needs of customers of a given store. It is extremely important in decision-making processes supported by artificial intelligence or data prediction systems. Going one step further, RFID, thanks to real-time inventory management, makes it possible to send orders directly to consumers in a very short time – adds Marek Kwiatkowski.

Particular attention should be paid to RFID technologies and the possibilities it offers in inventory management and stocktaking. Time savings and a reliable view of the inventory are one of the many benefits of this technology. In the face of new delivery offers, and more specifically, a shortened time of product delivery to customers, stocktaking and efficient inventory management become even more important.

At Sescom, we have conducted our own analyses, which show that the use of RFID significantly reduces the stocktaking time. Several thousand items in an hour – this is how many can be registered by one person thanks to the use of radio waves. In comparison, standard stocktaking allows you to make approximately 150–200 records
in 1 hour. The duration of the stocktaking in a medium-sized store (15,000 items), carried out by several people, decreases from 48 to 2 hours when the RFID technology is implemented. Time can also be saved for the reception of items (time reduced by half) so that the items are also sold much faster. The use of RFID can also significantly shorten the time of processing returns, thanks to easier pickup and faster search for returned goods. Time is money, so implementing RFID in stores saves working time and reduces costs – Marek Kwiatkowski comments.

Process optimization equals smart saving

Retail chain management requires efficient response to failures, breakdowns and technological changes that will occur in the nearest future, and searching for areas,
in which it is possible to optimize processes and generate savings.

Proper technical condition of the facilities means not only a more comfortable shopping experience for customers but also lower maintenance costs for owners. At Sescom, we service approximately 40 thousand facilities, which allows us to find the best solutions for local problems of individual facilities and to increase the efficiency of the entire chain. Our work can start at various stages of the facility’s life cycle – at the design stage, when we take into account its future to choose appropriate infrastructure, devices and technologies, or later, when we improve the functioning of existing facilities, optimise devices, reduce energy consumption and increase process efficiency, changing the management of the facility to respond to the needs of consumers and to technological changes – says Marek Kwiatkowski.

One of the most promising areas for generating savings is optimisation of energy consumption. Experts from Sescom recall a recent project in which, thanks to the commitment of both parties, final reduction in energy costs was three times better than what was initially assumed it would be. Savings can be impressive, indeed.

From the FM perspective, there are two key challenges: to find the right partner to talk about the new solutions, and to do joint search and implementation. For the process to make sense, our customers need a provider with an appropriate scale of operation and a proper technical experience. Another challenge is the choice between saving through standard costs cutting, and investing in energy and process efficiency. The market is difficult, and investment is often mistakenly associated with cost. Energy efficiency is an ideal solution for those looking for wise savings. We start our work with an audit, where we analyse data on consumption of utilities, but not only – we can also analyse the condition of the facility or contracts with energy suppliers. We choose optimal technologies, including our own solutions. We are strongly focused on collecting and analysing data, on the basis of which we prepare reports and predictions that later support the optimisation of operations, without reducing the comfortability of the facilities. We execute projects focusing on specific goals. Together with the customer, we determine what real savings we are able to generate
and what actions should be taken. Together, we decide the goals, the scope of actions and the responsibilities of the staff. We like to measure our effectiveness in numbers, and we are even more likely to do it by converting savings into money that is left with the customer. Especially in the recent circumstances – Marek Kwiatkowski explains.

“Retail is changing and we support these changes”

Analysis of reliable data is essential for effective management of retail chain stores. New technologies allow us to collect and analyse data on product baskets, inventory management, and customer preferences, as well as to support the management of technical maintenance of facilities and the search for savings. The present market situation forces us not only to follow the current trends – retail chain stores must look into the future and implement technologies and solutions that have become a real vision of tomorrow. Progressive shop automation and the growing importance of autonomous stores seem to be the right direction.

The market is moving towards a smooth, multi-channel experience with autonomous stores, real-time process monitoring, predicting failures instead of reacting to those that have already occurred, faster deliveries from local warehouses, and increasing efficiency – including energy costs reduction. The importance of online shopping is expected to increase, and the pre-Christmas months will be another record for this sales channel, not only in Poland, but also worldwide. This creates new challenges for the retail industry. The store must be “armed” with appropriate supplies, be able to manage them, store them, and take care of efficient logistics of orders and returns. Retail is changing, and we support these changes – as shown by UCE Research and Syno Poland, 66.1% of Poles are definitely in favour of introducing a bigger number of self-service checkouts in stores. The gradual automation of stores is one of the most visible consequences of the coronavirus epidemic on the retail market, confirmed by the increased pace of implementation of self-service checkouts in stationary stores – explains Marek Kwiatkowski, Commercial Director at Sescom.