February 08, 2024

White Paper
12 min

Modernizing the Retail Customer Experience

Best practices and best-in-class technologies can help retailers delight their customers and create a competitive edge.

IN THIS ARTICLE

Retailers face a variety of daunting challenges. They must deal with financial pressures as inflation drives up prices and theft affects their bottom line. They have to address technology issues such as cybersecurity threats and the need for better data while also operating with outdated tools and limited networks.

The reality is that many stores need an upgrade. Technology can give retailers new avenues to address their challenges. For example, IT enhancements such as better connectivity, upgraded point-of-sale solutions and application modernization can improve the shopping experience for customers while enhancing productivity for sales associates.

For businesses that undertake a retail modernization initiative, an effective strategy is imperative. Business and IT leaders must clearly understand their objectives and map out a path to achieve them. Those that get it right will reap valuable benefits, such as new data-driven insights into customers, more robust cybersecurity and an enhanced omnichannel experience.

How can you overcome your retail technology challenges?

Retailers face a variety of daunting challenges. They must deal with financial pressures as inflation drives up prices and theft affects their bottom line. They have to address technology issues such as cybersecurity threats and the need for better data while also operating with outdated tools and limited networks.

The reality is that many stores need an upgrade. Technology can give retailers new avenues to address their challenges. For example, IT enhancements such as better connectivity, upgraded point-of-sale solutions and application modernization can improve the shopping experience for customers while enhancing productivity for sales associates.

For businesses that undertake a retail modernization initiative, an effective strategy is imperative. Business and IT leaders must clearly understand their objectives and map out a path to achieve them. Those that get it right will reap valuable benefits, such as new data-driven insights into customers, more robust cybersecurity and an enhanced omnichannel experience.

How can you overcome
your retail technology challenges?

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The Constantly Changing World of Retail

Labor shortages, historically high inflation, and increases in theft, crime and shrinkage — retailers have been forced to confront a potent combination of challenges in recent years. At the same time, technology, customer behavior and payment options are evolving more quickly than ever. And these hurdles all come on the heels of a global pandemic that threatened some stores’ very existence. Many consumers who turned to online shopping during the COVID-19 pandemic are continuing to make the bulk of their purchases from home, and retailers are still competing with one another to lure them back into their physical stores.

Technology can help retailers solve many of their most pressing challenges, but only when they implement solutions in ways that also help solve problems for shoppers. Consider self-checkout, for instance. Many stores have installed self-checkout kiosks as a cost-effective way to solve their staffing shortages and reduce customer wait times. But too often, self-checkout creates an irritating experience for customers and introduces new problems for loss prevention professionals. However, when such initiatives are implemented effectively — with the right technology for the job — they can both enhance the customer experience and help retailers achieve their business goals.

62%

The percentage of retailers that increased their budgets for in-store technology in 2023

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023



This might mean using video analytics to reduce shrink at self-checkout kiosks, as well as to sniff out “sweethearting” scams and other employee theft. It might mean increasing the use of radio frequency identification, predictive analytics and other technologies to improve inventory tracking and ensure that items will be in stock when customers need them. Or it might mean using geolocation to track customers arriving for pickup, reducing wait times and friction for shoppers who have grown accustomed to the convenience of same-day delivery.

Already, many stores have aggressively embraced digital transformation, developing custom mobile apps, deploying digital signage, building out robust customer Wi-Fi networks and taking other forward-looking steps to delight shoppers and maintain an edge over their competitors. By continuing to optimize your IT environments and thoughtfully leveraging emerging technologies such as artificial intelligence, retailers can gain ground in a competitive sector and give customers an experience that’s worth leaving home for.

Emerging Technologies in Retail

Digital capabilities enable retailers to offer customers new ways to make purchases and have their items delivered.

Artificial Intelligence: Retailers can leverage AI for customer service chatbots, personalized marketing campaigns and demand forecasting, among other uses. Companies across sectors are aggressively pursuing new AI applications. Those that figure out how to use the technology effectively will give themselves a decided advantage.

Edge Computing:
By processing data nearer to the point of interaction, edge computing solutions enable retailers to offer faster and more reliable connectivity. This, in turn, can power services that boost customer satisfaction, such as real-time inventory tracking and personalized in-store promotions.

Extended Reality: Although the metaverse did not take off in the way that some observers predicted, augmented reality and virtual reality have been valuable in some niche use cases. For instance, AR and VR applications in retail allow customers to visualize products in their own spaces, virtually “try on” items and engage with educational content about products before purchasing.

How can IT modernization improve your store’s success?

The Constantly Changing World of Retail

Labor shortages, historically high inflation, and increases in theft, crime and shrinkage — retailers have been forced to confront a potent combination of challenges in recent years. At the same time, technology, customer behavior and payment options are evolving more quickly than ever. And these hurdles all come on the heels of a global pandemic that threatened some stores’ very existence. Many consumers who turned to online shopping during the COVID-19 pandemic are continuing to make the bulk of their purchases from home, and retailers are still competing with one another to lure them back into their physical stores.

Technology can help retailers solve many of their most pressing challenges, but only when they implement solutions in ways that also help solve problems for shoppers. Consider self-checkout, for instance. Many stores have installed self-checkout kiosks as a cost-effective way to solve their staffing shortages and reduce customer wait times. But too often, self-checkout creates an irritating experience for customers and introduces new problems for loss prevention professionals. However, when such initiatives are implemented effectively — with the right technology for the job — they can both enhance the customer experience and help retailers achieve their business goals.

62%

The percentage of retailers that increased their budgets for in-store technology in 2023

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023



This might mean using video analytics to reduce shrink at self-checkout kiosks, as well as to sniff out “sweethearting” scams and other employee theft. It might mean increasing the use of radio frequency identification, predictive analytics and other technologies to improve inventory tracking and ensure that items will be in stock when customers need them. Or it might mean using geolocation to track customers arriving for pickup, reducing wait times and friction for shoppers who have grown accustomed to the convenience of same-day delivery.

Already, many stores have aggressively embraced digital transformation, developing custom mobile apps, deploying digital signage, building out robust customer Wi-Fi networks and taking other forward-looking steps to delight shoppers and maintain an edge over their competitors. By continuing to optimize your IT environments and thoughtfully leveraging emerging technologies such as artificial intelligence, retailers can gain ground in a competitive sector and give customers an experience that’s worth leaving home for.

Emerging Technologies in Retail

Digital capabilities enable retailers to offer customers new ways to make purchases and have their items delivered.

Artificial Intelligence: Retailers can leverage AI for customer service chatbots, personalized marketing campaigns and demand forecasting, among other uses. Companies across sectors are aggressively pursuing new AI applications. Those that figure out how to use the technology effectively will give themselves a decided advantage.

Edge Computing:
By processing data nearer to the point of interaction, edge computing solutions enable retailers to offer faster and more reliable connectivity. This, in turn, can power services that boost customer satisfaction, such as real-time inventory tracking and personalized in-store promotions.

Extended Reality: Although the metaverse did not take off in the way that some observers predicted, augmented reality and virtual reality have been valuable in some niche use cases. For instance, AR and VR applications in retail allow customers to visualize products in their own spaces, virtually “try on” items and engage with educational content about products before purchasing.

How can IT modernization
improve your store’s success?

Modern Retail by the Numbers

A 2023 report from Retail TouchPoints offers insights into the challenges that stores face and how they are using technology to address them.

70%

The percentage of retailers that cited hiring and retaining associates as their top store operations challenge in 2023

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

82%

The percentage of retailers that equipped store associates with mobile devices

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

59%

The percentage of retailers reporting that providing mobile devices to store employees increased productivity, and 50% said it increased upselling and cross-selling

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

80%

The percentage of retailers that said they had implemented mobile-integrated digital signage or planned to do so

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

Modern Retail by the Numbers

A 2023 report from Retail TouchPoints offers insights into the challenges that stores face and how they are using technology to address them.

70%

The percentage of retailers that cited hiring and retaining associates as their top store operations challenge in 2023

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

82%

The percentage of retailers that equipped store associates with mobile devices

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

59%

The percentage of retailers reporting that providing mobile devices to store employees increased productivity, and 50% said it increased upselling and cross-selling

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

80%

The percentage of retailers that said they had implemented mobile-integrated digital signage or planned to do so

Source: Retail TouchPoints, “2023 Store Operations Benchmark Survey,” Oct. 19, 2023

cdw

Modern Retail Challenges

Before investing in new technologies, business and IT leaders should carefully consider what problems they are trying to solve. In addition to macroeconomic challenges related to labor and inflation, many retailers’ efforts to delight their customers and boost their bottom lines are limited by the following factors:

RISING COSTS: Although inflation numbers came down in 2023, stores are still adjusting to a new normal where the cost of producing, transporting, storing and selling items is markedly higher than it was in recent years. Theft only exacerbates this challenge, with more than one in three retailers reporting shrinkage rates above 2 percent in 2022. Many retailers are left with no choice but to pass these costs on to their customers, unless they can find new ways to trim their expenses.

DATA QUALITY: Across industries, artificial intelligence has taken the business world by storm. Data analytics capabilities also remain essential in the retail sector. Both of these areas of technology require quality data. When data environments are disorganized or inefficient, retailers are largely unable to leverage customer and store information to arrive at valuable business insights.

Click Below to Continue Reading

arrow

OUTDATED SYSTEMS: An otherwise game-changing retail application will fall flat if it is supported by ineffective legacy infrastructure — a long-standing and well-known problem in retail. Stores that invest in back-end technology see better performance than those that don’t, but these investments must be guided by an overarching, forward-looking strategy.

CYBERSECURITY AND COMPLIANCE: Stores are a rich target for cybercriminals, for obvious reasons. Retailers’ IT systems house a lot of sensitive customer data, including payment information. This results in the need to not only comply with Payment Card Industry Data Security Standard (PCI DSS) regulations, but also to protect environments against attacks that can negatively affect a retailer’s reputation with customers.

COST OF TECHNOLOGY PROJECTS: It’s the classic Catch-22 of retail — stores have to spend money to make money. But when sales are down and other expenses are up, it can be difficult to find budget dollars for new IT investments. This is why it is so important for technology projects to be accompanied by ROI analyses and other assessments.

NETWORK LIMITATIONS: The enterprise network has become critical to business success, thanks to the rise of mobile payments, the proliferation of custom store mobile apps, an increase in digital signage and other factors. In addition to new wireless networking and network management capabilities, retailers are exploring the use of 5G connectivity, together with edge computing, to address these challenges.

cdw

Retail Challenges

Before investing in new technologies, business and IT leaders should carefully consider what problems they are trying to solve. In addition to macroeconomic challenges related to labor and inflation, many retailers’ efforts to delight their customers and boost their bottom lines are limited by the following factors:

RISING COSTS: Although inflation numbers came down in 2023, stores are still adjusting to a new normal where the cost of producing, transporting, storing and selling items is markedly higher than it was in recent years. Theft only exacerbates this challenge, with more than one in three retailers reporting shrinkage rates above 2 percent in 2022. Many retailers are left with no choice but to pass these costs on to their customers, unless they can find new ways to trim their expenses.

DATA QUALITY: Across industries, artificial intelligence has taken the business world by storm. Data analytics capabilities also remain essential in the retail sector. Both of these areas of technology require quality data. When data environments are disorganized or inefficient, retailers are largely unable to leverage customer and store information to arrive at valuable business insights.

Click Below to Continue Reading

arrow

OUTDATED SYSTEMS: An otherwise game-changing retail application will fall flat if it is supported by ineffective legacy infrastructure — a long-standing and well-known problem in retail. Stores that invest in back-end technology see better performance than those that don’t, but these investments must be guided by an overarching, forward-looking strategy.

CYBERSECURITY AND COMPLIANCE: Stores are a rich target for cybercriminals, for obvious reasons. Retailers’ IT systems house a lot of sensitive customer data, including payment information. This results in the need to not only comply with Payment Card Industry Data Security Standard (PCI DSS) regulations, but also to protect environments against attacks that can negatively affect a retailer’s reputation with customers.

COST OF TECHNOLOGY PROJECTS: It’s the classic Catch-22 of retail — stores have to spend money to make money. But when sales are down and other expenses are up, it can be difficult to find budget dollars for new IT investments. This is why it is so important for technology projects to be accompanied by ROI analyses and other assessments.

NETWORK LIMITATIONS: The enterprise network has become critical to business success, thanks to the rise of mobile payments, the proliferation of custom store mobile apps, an increase in digital signage and other factors. In addition to new wireless networking and network management capabilities, retailers are exploring the use of 5G connectivity, together with edge computing, to address these challenges.

How can you overcome
your retail technology challenges?

Rich Borkowski, Gina Cox, Andy Szanger

CDW Experts
CDW Contributors