The future of retail: Embracing technology to overcome cost pressure | HCLTech

The future of retail: Embracing technology to overcome cost pressure

The retail landscape is undergoing a seismic shift, driven by rapidly evolving consumer demands and the relentless march of technology
 
6 minutes read
Mousume Roy
Mousume Roy
APAC Reporter, HCLTech
6 minutes read
The future of retail: Embracing technology to overcome cost pressure

Rising operational expenses, supply chain disruptions and dynamic consumer behavior have pushed retail businesses to seek solutions that optimize efficiency, reduce overheads and maintain profitability. The increasing cost pressure on retailers has spurred the adoption of innovative technologies, which are reshaping the industry.  

During an interview with Rahul Gupta, the Head of Technology – Store Team at Coles Group, he stated: “When considering the broader landscape of grocery retail, retailers are aiding communities that are facing challenges in the aftermath of the COVID-19 pandemic. The widespread awareness of economic pressures is evident, and technology plays a pivotal role in simplifying, streamlining and enhancing various aspect of life.”

Cost pressure in retail

The retail sector is no stranger to cost pressures, as factors like inflation, supply chain disruptions and changes in consumer behavior impact the bottom line. According to a report by the National Retail Federation, operating expenses for retailers have been on a steady rise over the past five years, outpacing revenue growth. This trend poses significant challenges for businesses trying to maintain profitability without compromising customer experience.

“Technology takes out a portion of the cost, be it by running automated operations or doing advanced analytics to give actionable insights. It scraps out mundane, repeatable or a non-productive step out of the picture,” adds Gupta.

“Even when we make advances in future, each of the elements which define the next level of technology is going towards building up a cost-effective or cost-neutral business operations. Look how the pandemic fastened the digitization, not only to improve the customer experience, but also to make it safer,” he emphasized.

Technology as the solution

Technology has emerged as a lifeline for retailers seeking to adapt and thrive. The integration of artificial intelligence, machine learning, analytics and automation has become a game-changer, empowering businesses to streamline operations, enhance decision-making and personalize customer experiences.

Commenting on the store operations, Gupta says: “Our everyday priority is to ensure replenishment of all items available in store for the customers visiting the store. For Coles that has been a key journey for many years when our senior leaders looked at the vision of bringing in artificial intelligence. Today, we use smarter forecasts powered by AI, ML and advanced technologies to take care of our replenishment, automatic ordering and automatic warehouse operations. As a next step, we are looking at ethical frameworks and then building in Generative AI.”

AI and ML have revolutionized the retail industry, enabling predictive analytics, demand forecasting and personalized marketing. By analyzing vast amounts of customer data, these technologies help retailers understand consumer preferences and optimize inventory management. For instance, AI-powered chatbots have transformed customer service by providing instant support and resolving queries efficiently.

Automation has proven to be a cost-effective solution for retailers to manage repetitive tasks, reduce manual errors and increase operational efficiency. The deployment of robotics in warehouses and distribution centers has led to faster order processing and reduced labor costs.

“Coles’s partnership with HCLTech started with a small engagement in distribution space—optimizing and redefining our release management process. But within a short period, they brought in test automation and took over the services part, followed by taking a leap of faith going into modern engineering practice,” explains Gupta.

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Merging offline and online customer experience

As consumers demand a more personalized and seamless shopping experience, retailers must blend their offline and online channels effectively. Remarking on why a unified experience is important with an example, Gupta says: “If consumers buy online, returning it to a store is easier, whereas if they buy something offline, bringing it and looking at the assortment of what they get in a store is different. Retailers must integrate their online and offline platforms to create a consistent experience for customers across all touchpoints.”

Brick-and-mortar stores can leverage technology to enrich the in-store experience. Augmented reality (AR) and virtual reality (VR) can be used to offer interactive product demonstrations, virtual try-ons and immersive shopping experiences.

“In a physical store, it is difficult to showcase everything a retailer wants to sell to the customer through an offline channel because of space constraints. However, in an online segment, retailers have the option of presenting an array of offerings. It is important to ensure that product availability, pricing and promotions are unified, regardless of whether customers are browsing online or visiting physical stores,” he added.

Looking ahead

The future of retail lies in the symbiotic relationship between technology and customer experience. Embracing emerging technologies and merging the digital and physical aspects of customer experience will be the key to thriving in the competitive retail landscape. 

TAGS:
Cost Optimization
Customer Experience
Machine Learning
Retail
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