As 2023 approaches, industries across the spectrum are looking at how they can improve on the year before—from a strategic, operation, innovation, employee and customer experience perspective.
In retail, a sector that was heavily disrupted by COVID-19, there are vast changes on the horizon as the industry looks to embrace new technologies and ways of working that meet the ever-evolving requirements of the modern consumer.
Justin Honaman, Head, Worldwide Retail & Consumer Goods Go-To-Market (GTM) at AWS, helps break down the three trends he sees the retail sector embracing in 2023.
Trend 1: The supply chain — forecasting, inventory management and last mile delivery
For retail organizations, the question on every leader’s mind when it comes to the supply chain is how to gain better visibility.
To understand forecasting requirements, Honaman reveals that retailers will need to better leverage data from across their organization to establish what product is needed and when.
“In 2023, there are new ways of leveraging data to drive a better forecast, which includes leveraging new more flexible data integration platforms, simplified reporting and business intelligence, and light advanced analytics using AI, ML and new low-code capabilities.”
Retailers are also evaluating their legacy operational systems (including inventory and warehouse management) and searching for more flexible cloud-enabled solutions, which is another trend that Honaman sees retailers embracing in 2023.
With the rise of eCommerce, distribution and last mile has also been disrupted. Traditionally, the last mile was the retail store, but today there are many options for purchasing and collecting that complicate this last section of the supply chain.
"To cope with this complexity at the last mile, new models are being considered to accommodate this omnichannel environment and serve customers effectively, including micro-fulfillment centers,” adds Honaman.
Trend 2: In-store technology and new capabilities for customer interaction
The introduction of in-store technology is nothing new.
Select retailers have established geofencing in their physical stores, which recognize when returning customers have entered the premises to trigger an interaction or engagement.
These digital first companies have the infrastructure in place to enable this level of personalization and engagement. However, for legacy retailers—who don’t have the infrastructure in place in older footprint stores—this is a challenge.
“To overcome this in 2023, more retailers will build out new store footprints to accommodate new in-store technology and retrofit existing and leverage new tech in new stores,” says Honaman.
He adds: “They will also continue to experiment with technologies like digital shelf labels, which enable store owners to dynamically manage the pricing of products.”
Computer vision is another technology that Honaman shares will accelerate in 2023 in retail.
By installing cameras and utilizing edge technology to capture data on those devices, store owners can find trends and patterns in shopping behavior that they previously weren’t able to identify. This can help with prioritizing stock levels of certain products and in managing costs and energy.
Computer vision has also been implemented in Amazon Fresh and Go stores, where purchases are automatically added and charged to a customer’s Amazon account upon exiting the store.
"There is and will continue to be a lot of new experimentation and testing around in-store tech. It's an exciting time to be in that space, with a variety of new players of all sizes. We’ll see experimentation not only from the largest retailers, but some of the mid and smaller retailers who are trying to differentiate on customer experience,” says Honaman.
Trend 3: The cloud
For major retailers that have grown through acquisition or have lots of legacy technology, the cloud offers them the ability to move to a common, more flexible operational platform. Also, the cloud enables new technologies, like augmented reality (AR), virtual reality (VR), live streaming, virtual try-on and other immersive commerce experiences.
This allows retailers to drive innovation, optimize operations and drive a more dynamic customer experience, while modernizing their existing back-office systems.
This trend of cloud adoption will accelerate in 2023, with retailers also expecting more contextual or tailored cloud services, specific to their industry or even individual business.
Industry cloud was ranked as a key 2023 strategic technology trend by Gartner and transformation providers, like HCLTech, are working with partners like AWS to deliver these expectations.
In fact, HCLTech was named by IDC MarketScape as a Leader in its Industry Cloud Professional Services vendor assessment for 2022.
These contextual cloud services will not only offer continuous modernization and flexibility, but also rapid cost savings.
Cloud migration and modernization is complicated and there are four key areas that Honaman highlights to be successful when working in the cloud:
-
Boardroom/executive alignment and buy-in that technology will be a competitive advantage and priority
-
A defined project or end goal to drive the migration and modernization
-
The talent to support cloud adoption, whether internally or externally from a consultant or technology provider–skill sets to support the new tech
-
A timeline that maps out what workloads are going to be migrated and when–with set milestones, deliverables and metrics.
