Retailers across segments are accelerating technology deployment plans to enhance the customer experience and drive operational efficiencies, but there are significant differences between planned technology rollouts in the grocery/general merchandise and specialty/department Store segments, according to the 2022 Connected Retail Experience Study by Incisiv, sponsored by Verizon.
“As more mobile and IoT technology is deployed in stores, it will drive the need for more robust network connectivity,” said Jerri Traflet, managing partner, Global Solutions at Verizon. “It is not surprising that the greatest expected increase in in-store technology — consumer devices — is the No. 1 driver for retailers to consider adopting 5G deployments.”
The study highlights the pressure that store networks will be under as respondents have indicated that customer mobile device usage, the number of technology applications and percentage of technology that will be deployed in the cloud will all increase significantly in the next 12-24 months. This, combined with the fact that less than one-third of retailers are currently satisfied with their application response time and their ability to manage network traffic, shows a clear disconnect when it comes to in-store technologies.
Key findings of the study include:
- Only 22% of Grocery/General Merchandise retailers are satisfied with their digital store experience vs. 55% of Specialty/Department store retailers
- 93% of retailers expect an increase in the use of consumer mobile devices in stores by 2025 and 83% of retailers anticipate an increased amount of technology deployed in stores
- The percentage of associate tasks that are automated is expected to triple by 2025 (19% to 62%) for Grocery/General Merchandise retailers, a far higher percentage increase than for Specialty/Department store retailers, which is expected to double (37% to 72%)
- Only 20% of Grocery/General Merchandise retailers are satisfied with their ability to manage peak network traffic vs. 32% for Specialty/Department store retailers
- The No. 1 driver of planned 5G adoption in stores is the increase of customer mobile devices in stores, followed by the increase in associate mobile devices
- Associate effectiveness capabilities such as real-time inventory tracking and associate Wi-Fi ranked as the highest priority deployments in the next two years
While retailers are satisfied with their overall store experience and operations, they are dissatisfied with their store’s digital maturity, according to the study. “There is a disconnect between how retailers assess their overall store experience and their digital store experience,” says the report. “While they are satisfied with their overall store experience and operational efficiency, they don't think their digital experience meets shopper expectations. Over the last 18 months, we've seen a rapid acceleration in shoppers' digital adoption and, consequently, a rapid digital transformation for retailers. We've seen the store experience become more contactless, shopper-associate engagement has become digital and the store's role has evolved to become a hub of omnichannel fulfillment. The store's digital fabric (engagement and operations) needs strengthening because it will be the critical determinant of future performance.”
• 62% are satisfied with their overall store experience
• 66% are satisfied with their store's operational efficiency
• 39% are satisfied with their store’s digital experience
• 47% are satisfied with the effectiveness of their store associates
Overall, Grocery & General Merchandise retailers are less satisfied with their store performance than Specialty & Department Stores. The smallest gap between formats is in store operational efficiency (62% for grocery vs. 70% for specialty). The biggest gap is their satisfaction with the store's digital experience (22% for grocery vs. 55% for specialty). The report notes that the sample's higher percentage of grocery retailers is driving these gaps. “The complex operational challenges faced by grocers during the pandemic and their slower digital adoption are the primary reasons for these gaps in satisfaction,” says the report.
“While it is great to see retailers truly looking at how technology can help them improve customer experiences, operational efficiency, and associate effectiveness, they aren’t as clear on the network requirements to implement these technologies,” said Gaurav Pant, chief insights officer, Incisiv. “We found that priorities are different for Grocery/General Merchandise retailers vs. Specialty/Department Store retailers, but the need for a robust network won’t change.”