New Research

Summary

This IDC Market Presentation summarizes key findings gathered from IDC's 2023 Global Retail Survey on digital or technology-enabled initiatives across all retail business functions, products, and services. This survey polled 840 retailers across four regions: Asia/Pacific, the U.S. and Canada, EMEA, and Latin America. Respondents were distributed across countries, subsegments, IT and LOB roles, functional areas, and departments.

The study illustrates retailers' key challenges, business priorities, and strategies across customer experience, commerce, store and workforce engagement, supply chain, and merchandising. Results include innovation efforts, business use cases, and related technology investment plans over the next three years. The survey also shows today's retailers' IT architecture strategies, highlighting changes in their IT spending for 2024, the balance between cloud and on-prem, and the maturity of their headless and modular Retail Commerce Platform (RCP) architectures.  

Finally, the study provides 10 key actions, derived from the survey results, that summarize how future-oriented retailers are crafting their digital transformation strategies across the retail value chain.

Summary

This IDC study helps retail decision makers identify and navigate the areas of the retail ecosystem that are being digitally transformed as retailers adopt new processes and technologies to underpin organizational change. This annual study updates definitions and introduces new programs and uses cases that will be employed to implement strategy while highlighting the benefits of moving from current processes to digitally transformed processes, and the technologies that will be required. The rate of digitization is increasing for retailers, which seek to stay ahead of the competition by improving customer experience, engaging frontline workers, and optimizing operations.

"In this new era of AI everywhere, technology is opening up new sources of revenue for retailers that are willing to invest in the infrastructure and tools that connect their customers and their workers to interactive, personalized experiences," says Leslie Hand, group vice president, IDC Retail Insights.

Summary

Oracle is evolving into a service-focused technology provider in tandem with the evolution of its retail platform, which unifies data, applications, and AI across a single platform built on Oracle OS in the cloud. Applications use one source of data, AI engines span cloud services, and natively integrated extensions provide private endpoints for retailers to flow easily into other applications. All of this is supported by a global Oracle team including a relatively new, dedicated unit devoted to helping customers extract more value from their systems. To this unified offering, Oracle has added Collect and Receive, a new integrated retail service to the platform that aligns retailers' last-mile assets – inventory, customers, and sales associates – with "delivery" capability in partnership with Uber while bringing the weight of the platform data to this crucial segment of the supply chain.

Summary

This IDC Perspective investigates the current and future role of computer vision within the retail industry. This includes a deep dive into computer vision — what it is, how it works, and the approaches for developing, validating, and deploying it within retail organizations. IDC also identifies and analyzes key experimental, emerging, and established computer vision-enabled use cases for retailers. IDC's research and ecosystem discussions reiterate the long-term role that computer vision will play in improving customer experience, increasing operational efficiencies in stores, and finding opportunities for innovation. Although the journey to fully realize computer vision's potential remains long, retailers and their technology partners should remain committed to future development and adoption.

"The potential value of computer vision to help retail organizations is crystal clear, yet the primary hurdle for retailers remains determining which use case should be prioritized and pursued first," said Matt Arcaro, research director of IDC's Computer Vision AI Tools and Technology Research Program. "The broad applicability of computer vision and its strong alignment and fit with a retailer's current and future operational goals create a high-value use case pipeline to be unlocked."

"We see computer vision solutions adding value across operational domains," said Leslie Hand, GVP, IDC Retail and Financial Insights. "Combined with emerging AI tools and technologies, computer vision will help retailers capture and operationalize data that has previously been hidden, making brick and mortar stores function more like online shopping environments with the same insights into customer behavior, preference, and engagement."

Summary

This IDC Perspective looks at the market conditions that are leading hardware providers to pivot to a software and services model, as well as how that pivot requires an organization to change how it does business. We examine three companies (Honeywell, Panasonic Connect, and Zebra) known for their retail hardware devices that are broadening their offerings to include software and services. We also offer advice on working with hardware providers moving forward. The software-as-a-service model has gained significant traction among retailers as the primary way to digitally transform their businesses, remain agile, and juggle compute loads at the edge or in the cloud. Software helps retailers personalize customer experience, engage the workforce, and digitize store operations. In this shifting model, hardware devices become data collection points, transactional interfaces, and problem-solving tools that enable the software, while the software drives the value for the retailer. As a result of this shift, traditional hardware vendors are repositioning themselves, adding software and services capabilities to their offerings to add strategic value to retail businesses.

"Put simply, the role of handheld devices in retail has changed. It used to be enough for hardware devices to solve single process problems, like receiving or ordering, and as a result, only a select group of employees had access. Now retailers need handheld devices to connect the frontline employee with information, tools, their peers, and next best actions to improve the overall customer experience. Software drives this connection, and hardware companies are moving to meet retailer needs through strategic acquisitions, software innovation, and culture change," says Leslie Hand, GVP, IDC Retail and Financial Insights.

Summary

This IDC Survey Spotlight highlights our most recent data (April 2023) on which retail team members have access to data and which technology and organizational barriers can get in the way of serving customers most effectively, as well as IDC's take on what steps retailers and their technology vendor partners must take to digitize the store and equip the frontline workforce with the information they need to improve customer experience. Giving real-time data to frontline employees allows them to serve customers more effectively and efficiently, yet retailers face significant challenges in making this data available.

Summary

This IDC TechBrief examines the benefits, risks, success factors, adoption rate, and required investment for retailers considering implementing an electronic shelf label (ESL) solution as part of their strategy to digitize the store. It also lists several key suppliers of ESL technology worldwide. To respond with agility to price changes across channels, and to manage skyrocketing labor costs, retailers are turning to electronic shelf labels to automate tedious, manual price changes.

"I am optimistic that electronic shelf label technology will be adopted more broadly as price and product transparency become more important for the consumer and in-store process automation becomes essential in store operations," said Leslie Hand, GVP of IDC Retail and Financial Insights.

Summary

ServiceNow, the digital workflow company, announced that it has entered into an agreement to acquire G2K, an AI and IoT technology company on May 12, 2023 – financial details have not been disclosed. The acquisition improves ServiceNow's ability to connect the workflows that it enables to G2K-powered real-time data across stores and digital properties thus providing a complete view of operational data while streamlining customer and employee experiences. Two of the greatest impediments to innovation today for retailers is managing the complexity inherent in data management and integration to workflows and ensuring that valuable data is actionable — ServiceNow's acquisition of G2K promises to address these challenges.

Summary

This IDC Survey Spotlight looks at the most recent survey data that reveals the top 3 types of vendors retailers are turning to for strategic vision, as well as our take on why these vendors are top of mind. Retailers want their technology providers to do more than provide hardware, software, and services; retailers are looking for technology vendors to act as strategic partners, with an understanding of how operations can be streamlined, workers can be more engaged, and customers can have interactive experiences in stores.

Summary

This IDC Market Presentation features recent retail IT budget shifts and investment priorities. Timely topics covered include the projects that must be completed now and those that may slow down until the disruptive force of the macroeconomic climate settles down. Other highlights include top priorities in cloud, AI, and services and a brief note on generative AI (including ChatGPT).

Leslie Hand, group vice president, IDC Retail Insights, suggests, "The current macroeconomic climate has retailers evaluating the current value in ongoing and future technology investments frequently, and the technology vendors that serve retailers need to be diligent in tracking shifting priorities on a quarterly basis at minimum — monthly is even better."

Summary

This IDC study provides a systematic assessment of the retail operations technologies that make up a fully digitized store. The IDC TechScape model is designed specifically to capture progress in the adoption of emerging disruptive technologies, mainstream technology buyer alignment with current industry best practices, and support technologies that promise to deliver operational advantages to organizations that choose to adopt them.

"In the fully digitized store, the customer receives all of the ease, personalization, and choice they get online, and the retailer gets the same level of data and analytics that ecommerce offers," said Leslie Hand, group vice president, IDC Retail and Financial Insights. "Retailers are moving quickly to meet customers where, when, and how they want to shop. The challenge for retailers will be building a modular framework that can rapidly integrate new technologies as they emerge, keeping customer choice, employee engagement, and real-time inventory and operations at the center."

Summary

This IDC Perspective discusses how, despite an anticipated recession and continued disruption from global events, retailers and vendors came to the 2023 NRF Big Show ready to celebrate the ways that technology has transformed retail since 2019. With 10 analysts onsite, IDC covered 160 meetings, gathering insights into the types of problems retailers are hoping to solve in the coming year.

This document also covers the technology we saw at NRF 2023 that optimizes and automates operation in stores, with an emphasis on frictionless customer experience, workforce empowerment, and the essential components of the digitized store. Technology investment continues to make sense for retailers despite economic conditions, as modernization and automation in IT management, business processes, and contextualized engagement will reduce costs and drive growth.

"Technology investment continues to make sense for retailers despite economic conditions, as modernization and automation in IT management, business processes, and contextualized engagement will reduce costs and drive growth. We saw evidence at the NRF Big Show that technology vendors are ready to help retailers ride the waves of market volatility expected in 2023 — from customer experience tools that power frictionless interactions to workforce experience tools that help employees fulfill a purpose, not just fill a shelf, to hardware and software that form the connective tissue of the digitized store," said Leslie Hand, group vice president, Retail and Financial Insights at IDC.

Summary

This IDC Perspective reviews key trends and technology innovations that were highlighted at NRF 2023: Retail's Big Show — held January 15–17, 2023, in New York City, which attracted over 35,000 attendees across the industry, double the number seen last year at NRF 2022 in the midst of the global COVID-19 pandemic. Technology innovations focused on seven key areas: customer experience, intelligent operations, end-to-end connected supply chains, AI for better decisioning and operational efficiency, workforce optimization, sustainability, and infrastructure modernization. Retailers are accelerating data-driven automation to improve customer experience and resiliency.

Leslie Hand, group vice president, IDC's Retail and Financial Services, noted, "The exuberance for retail and retail technology investment at NRF this year spoke volumes. Retailers clearly understand that the future of retail business depends on the ability to meet customer experience needs for frictionless, personalized shopping experiences, even as they continue to change. Becoming digital businesses is core to meeting changing customer expectations, but perhaps more importantly, to be more resilient and seize a competitive advantage (and new opportunities). We are in the middle of a customer-led, technology-enabled revolution in retail."

Summary

This IDC Tech Buyer Presentation highlights the hot topics and technology trends presented in the Retail's Big Show. Gleaned from across our retail analyst team, the insights presented in this IDC Presentation reflect the highlights and insights from the NRF 2023: Retail's Big Show, held January 15-17, New York. This presentation was delivered to retailers in a post-NRF event, giving context to what happened at the show with supplemental IDC insights and predictions for the retail year ahead.

The investments covered in this presentation will help retailers to scale and gain the agility needed to drive better customer experiences and improve business performance. Topic areas covered include Customer Experience and Engagement, Intelligent Operations, Connected End-to-End Supply Chain, AI for Better Decisioning and Operational Efficiency, Workforce Experience Catches up to the Human Experience, Operationalizing Sustainability from Concept to Consumer, and Intelligent Foundational Technology.

Summary

This IDC Web Conference presents a discussion of IDC's 2023 predictions for the global retail industry. Amid myriad sources of disruption, retailers are steadfastly reimagining business models, business processes, and the technology that will drive breakthrough growth and profitability. IDC's Retail Insights team will present several of the top 10 predictions of 2023 for the global retail industry. As retailers continue to adapt to the omni-channel, and increasingly digital retail reality, we'll provide both IT and line-of-business executives clear guidance on the long list of changes in technology priorities, innovation strategies, and business success metrics that retailers are embracing. The ante is bigger to stay in the game — retailers must perform better for customers but also for employees, ecosystem partners, management, and shareholders, as the cost of disappointing any of these constituents is too great.

To learn more about IDC FutureScape 2023, go to www.idc.com/events/FutureScape.

Summary

The IDC Retail Insights team attended AWS re:Invent 2022, held in Las Vegas from November 28 to December 2. "A key message from the event was the importance of an industry-specific focus in order to understand and empathize with the experiences of companies such as retailers and CPG businesses. These companies started their business model revolution years ago and now, despite external and internal challenges, can point to their fully digital business renaissance," said Ornella Urso, research manager, IDC Retail Insights.

Summary

This IDC PeerScape looks at several practices for choosing how and where to implement computer vision + AI in order to drive sales, improve customer experience, and create operational efficiencies in grocery and convenience store settings.

"Solving one operational problem may not be enough for a retailer to justify the cost of implementing computer vision and AI at scale. Retailers should start with the area of operations that will deliver the biggest value, then compound the benefits over time by leveraging the same technology to solve other problems," says Leslie Hand, GVP, IDC Retail and Financial Insights.

Summary

This IDC Survey Spotlight highlights current trends in retail to fill IT hiring gaps caused by workforce attrition and successful mitigation strategies. Filling positions with the right talent or upskilling workers is imperative, given the magnitude of change underway. The ability to innovate is impacted most as a result of IT staffing challenges (see IDC's Future Enterprise Resiliency and Spending Survey, Wave 6, July 2022, n = 816; n = 95 retail).

"Retailers have embraced the need to continue hiring contract labor but also to address internal IT workforce needs by having flexible workplace policies and by investing in internal knowledge management/information sharing, communication, and automation technologies to address employee staffing gaps," says Leslie Hand, group vice president, IDC Retail Insights. "Career development paths and learning, workplace flexibility, and compensation are the keys to IT employee retention."

Summary

This IDC Survey examines results from IDC's Future of Industry Ecosystems Survey. In May and June 2022, we fielded our second annual global survey to 1,270 executives across 5 regions and 11 countries. The goal was to determine executive and business leader sentiment on industry ecosystems, maturity of current approach, and future plans for IT and use case investment. Respondents spanned multiple domains and included CXOs, business-line leadership, and IT management.

Key findings from the survey include:

• Mitigating demand fluctuations and supply chain constraints and pursuing environmental sustainability goals are key joint initiatives for industry ecosystem partners.
• Trust and execution across industry ecosystems are the top risks to mitigate.
• Most organizations plan to, as they did last year, expand their industry ecosystems beyond their core industries.
• Service providers will play a key role in the design and enablement of industry ecosystems.

Another key area of focus for organizations when they consider the design and operation of their industry ecosystem is improvement of customer, consumer, citizen, or patient engagement and experience. That is, how does the shared, open approach of industry ecosystems (shared data and insights, shared applications, shared operations and expertise) better facilitate this?

This IDC Survey on the future of industry ecosystems is focused on the retail industry cut of this survey data. Retailers have faced consistent headwinds of the pandemic, ongoing supply and demand disruption, and inflation (among others) over the past two years and are realizing the benefits that industry ecosystems can provide.

Sharing data and insights, having access to a varied set of applications, and working closely with an expanding set of industry ecosystem partners simply make their business more resilient, innovative, and able to meet dynamic customer and consumer needs. As retailers begin to look outward to partner with other industries for new business models, the importance of this shared, open approach across ecosystems, enabled by a blended physical and digital way of working and delivery of customer experiences, will continue to rise.

Summary

This IDC Perspective discusses how traffic intelligence offers all retailers a path to understanding and improving the customer experience. As edge and cloud technologies bring ecommerce-style analytics capabilities to the brick-and-mortar environment, retailers are eager to gain a layered, contextual understanding of the in-store experiences of their customers. The modern, intelligent store is a data-rich brand hub that contains a wealth of knowledge — the problem thus far has been how to capture all the available data and turn it into actionable analytics. One very important area of knowledge retailers should invest in is traffic intelligence — measuring who comes to the store, where they spend their time, and what experiences capture their attention. Once retailers have this data, they must use it to improve customer experience, guide employee tasks, and optimize store floor operations.

"Without traffic intelligence and analysis, retailers don't have a complete understanding of their customers' experiences. Understanding how a customer moves through the store, whether that journey originated online or in a nearby business, and maybe even knowing if the customer is smiling or frowning when looking at a new display — will allow retailers to deliver what customers want more consistently and more efficiently," says Leslie Hand, GVP, IDC Retail and Financial Insights.

Summary

This IDC Survey Spotlight highlights current trends in retail human resource (HR) innovation investment already completed and within two years. This workforce-related data sourced from a recent IDC retail survey suggests that retailers are investing in employee experience, training, and tools to double down on customer centricity (source: IDC's Global Retail Operating Models Survey, August 2022). Without an engaged workforce, being truly customer centric is not possible. Current spending on employee training, task management, payroll flexibility, and augmented reality (AR) apps suggests that all associates will have permissions to access these capabilities. All access will require that all employees have a mobile device — either corporate provided or bring your own device (BYOD).

"Retailers have embraced the need to invest in mobile devices for all employees — both employer provided and employee provided — to take employee experience and training to the next level. As they bring more immersive apps online, they will also open the door to long-awaited tools for learning via the established workflow and then extending employee-generated content to the consumer to inform, excite, and sell more," says Leslie Hand, group vice president, IDC Retail Insights. "Imagine bringing live streaming into training or associating social media contest winners' content to customers. A whole new door to engagement has opened."

Summary

This IDC Perspective reviews important findings from IDC's 2022 Global Retail Operating Models Survey of 800 retailers worldwide, which provides deep insight into how retailers are digitally transforming their business to improve performance. The global COVID-19 pandemic has forced a permanent shift in the way consumers shop and the ways they engage with retailers. For retailers to thrive in this environment and expand their customer base, they must innovate to better serve their customers, driving revenue growth and profitability. Competitive pressures and a clear understanding of what is required to thrive now and into the future is driving retailers to invest more year over year on technology with finely tuned objectives including increasing customer engagement and enabling better visibility and control in store operations, inventory, and supply chain. Retailers that thrive are agile enough to accommodate changing customer needs.

Leslie Hand, group vice president, IDC's Retail and Financial Services, noted, "Retailers are not investing in small step changes to their portfolios — they are digitally transforming and investing in the massive scale and speed of digital, cloud-based, connected, and AI- and sensor-driven automation. We are in the middle of a customer-led, technology-enabled revolution in retail."

Summary

This IDC study presents the top 10 predictions for the future of industry ecosystems for the next six years.

"Extending and opening innovation, collaboration, and operation with partners across an ecosystem inside and outside any given industry has become a critical strategy for executives and their organizations. The world and each industry landscape are too complex, dynamic, and disruptive for any one organization to address on its own. The pace of innovation makes it difficult for organizations to keep up. As such, every organization needs an external source of data, insights, applications, operations, and expertise to complement and grow their business. Expansion, collaboration, and innovation with industry ecosystems has become the next phase of digital transformation for every organization," said Jeffrey Hojlo, research vice president, Future of Industry Ecosystems.

Summary

This IDC study provides IDC's 2023 top 10 predictions for retail.

Leslie Hand, group vice president, IDC Retail and Financial Services, emphasized, "Retailers are not investing in small step changes to their portfolios — they are digitally transforming and investing in the massive scale and speed of digital, cloud-based, connected, AI-driven, and sensor-driven automation. We are in the middle of a customer-led, technology-enabled revolution in retail."

Summary

This IDC Market Presentation summarizes key findings gathered from IDC's 2022 Global Retail Operating Models Survey on digital or technology-enabled initiatives across all retail business functions, products, and services. This survey polled 800 retailers across four regions: Asia/Pacific, U.S., EMEA, and Latin America. Respondents were distributed across countries, subsegments, IT and LOB roles, functional areas, and departments.

Study results show how retailers plan to unlock existing challenges and priorities across omni-channel operating models. The analysis looked at different areas of innovation — customer experience; store operations; marketing; merchandising; commerce; sourcing, logistics, and fulfillment; and human resources and finance — business use cases, and the related technology investments plans over the next two years.

Moreover, the study shows a comparison with customers data gathered from IDC's Global Retail Consumer Insights Survey in July 2022 (n = 1,010) to uncover existing gaps between retailers' priorities and consumer behavior, expectations, and thinking when it comes to omni-channel retail, which today is simply retail.