Every technological advancement is supposed to make life better. Whether it’s improving the way we interact with our friends, fill in our tax forms, or altering the way we work, every new piece of software or hardware that finds its way into our lives purports to do something positive.
But is it true? Many of the direct – and indirect – effects of new technology have been said to have negatively impacted upon the retail industry. So, is tech a threat rather than a help? Let’s consider the case:
Taking away customers
The internet brought intense competition to retailers. All of a sudden Main Street had to compete with rivals that had very low overheads and could be based anywhere on the planet. Shoppers could find cheaper alternatives online – or could choose to make their purchases without living their couch. Credit Suisse estimates that a quarter of all malls across the US are now at risk of closure – a fact not unrelated to the challenging retail environment created by the internet.
Losing staff
Stores have attracted fewer people through their doors as a result of online retail, but technology in-store has also served to reduce the number of people they employ too. Amazon Go’s high profile new store in Seattle is perhaps the ultimate example. Shoppers need only scan an app as they enter and – thanks to a series of sensors and cameras – they are automatically charged for the items they take from the shelves, without needing to even go to a cash register (the mantra is ‘just walk out’). Automation could well cut a great many jobs in the retail sector in the coming years.
Security
Retailers themselves have been able to tap into the benefits of online shopping, of course, launching their own online stores to reach customers. Yet, while this offers another source of revenue, it has also posed a risk. An increasingly sophisticated band of cybercriminals is posing a big threat to the safety of all website but retailers in particular – who handle financial transactions and store private data – are a desirable target.
But it’s not all bad…
While competition, automation, and security all clearly pose a challenge for the retail industry, it would be wrong to ignore the positives too. The retail industry is also able to harness new technology in a host of different ways to deliver products in a more effective way.
Whether it’s gathering data to inform marketing activities and personalize offers, or using software to streamline logistics and stock control, retailers put technology to good use.
It’s an evolving picture too. After Sephora’s Virtual Artist, Ikea Place, and Dulux Visualizer all went live last year, retailers are able to see practical ways in which augmented reality can help them to ‘sell an experience’ rather than merely peddle a product.
None of these tech advancements can be said to pose a threat to the retail industry – indeed some are breathing new life into the shopping experience. It would be naïve to ignore the dangers posed by technological ‘disruption’ – but any balanced view should look at the pros and cons.
Retailers have a choice. Find the best new technologies and put them to use or sit back and suffer from the downsides.
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