New technologies such as blockchain, automation, artificial intelligence (AI) and augmented reality (AR) are key investment priorities within the retail sector, outstripping human factors such as skills and workforce expansion, according to research from Hitachi Capital Consumer Finance.
In a study of more than 500 senior decision-makers from across the non-food retail spectrum, 36% of respondents cited technology as a key area of investment focus. That’s almost twice the number who cited expanding the workforce (19%), with hiring for particular skills (22%) also low on priorities.
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Vincent Reboul, Managing Director, Hitachi Capital Consumer Finance, says: “There is no doubting that the future of retail is going to be driven by technology. Retail experiences are being transformed by immersive and inventive innovations, while processes such as blockchain and AI have the power to change the supply chain and logistics forever. However, the industry is only as good as the people within it, so it remains crucial for retailers to get the balance right between technology and human investment.”
Under pressure
Many retail sectors are now focussing primarily on technology as they come under pressure to innovate amid business rate rises, depressed consumer spending and broader concerns around the health of the UK’s High Streets.
To quote a Director at a top 10 e-commerce retailer: “Technology is changing the way people are buying products, especially in the Millennial category, but you need to have a strategy that caters for both traditional buyers and Millennials. Broadly, traditional organisations do not have the right tech people onboard, and we’ve seen those retailers going through some difficult cycles to implement or pick the right technology for their business.”
Differing opinions
While the largest retailers (£25 million+ turnover) overwhelmingly (64%) picked out new technology as a focus, just 10% of businesses in the next largest bracket of £16 million – £25 million turnover put it at the top of the list, opting instead to focus on increasing their retail footprint (31%).
Reboul says: “Ever changing consumer demands are forcing the industry to look hard at how they can attract and keep new customers, while still managing their overheads. The research shows that, not only are there hugely differing opinions of the appropriate action to take across differing retail sectors, but there are also perhaps some areas where tech versus human investment is out of kilter.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.