COVID-19 Impact on Smart Retail in Information and Communication Technology Industry
Overview:
Outburst of one of the most deadly pandemic called Corona Virus disease which is termed as COVID-19 has engulfed whole earth with its severe causes and made world stand ground zero in context of movements of people and markets which resulted in brakes on cash flows and economies of the countries. This havoc of virus enforced governing bodies to introduce lockdowns and curfews in sight to slow down the virus from spreading rigorously until the vaccine are in existence. Lockdowns means temporary closing of marketplaces, manufacturing plants, offices apart from essentials such as medics, doctors and other daily needs. COVID-19 have negatively impacted many industries and sectors such as automotive, oil & gas, manufacturing, tourism, hospitality; on the other side it has also impacted optimistically on some sectors such as healthcare, smart retail industry and such others. Smart retail adoption rate has steeply increased owing to online purchase trends and contactless items delivery.
Earlier retail meant purchase of finished goods from shops; but now with online purchasing and innovative retailing, smart retail has been one of the finest growing sectors. Smart retail was growing at healthy pace even before this pandemic due to its features of fast and hassle free operations, since pandemic outburst adoption rate has seen steep rise in smart retail industry.
For instance,
Founder and CMO of IdealSpot, Bryan Eisenberg told, “We are busier than ever and want things faster and easier with less commitment. We want personalized experiences that account for our preferences and constraints. Retailers must track these trends and find ways to create remarkable customer experiences that save our customers their precious time”.
Due to lockdown situations many retail companies started offering products on online platforms as these are the only platform to generate business in lockdowns. Logically, majority of the customers worldwide are now purchasing from online portals hence adoption of smart retail is going to experience sharp rise.
Impact on Demand & Supply Chain:
Demand for smart retail is experiencing major growth mostly owing to lockdowns and social distancing norms by government bodies. Companies which were earlier using offline ways for retailing are now turning their way to digital operations. All of the business sectors worldwide have experienced these pandemic effects somewhat negatively; however few technologies such as smart retail could bring businesses back on track as it offers better safety and comfortable purchase for consumers. Smart retail can help the entities which are experiencing debts to no loss situation or lesser loss situation or marginal profit situation.
According to IT service firm Barquin, adoption rate for smart retail is rising, further they pointed out, "Although many retailers, especially small and medium-sized business, lack the commercial resources to finance more advanced BMS platforms or comprehensive integration, there is a growing consensus in the industry that stores must begin or continue to digitize with IoT-enabled devices and focus on offering customers superior shopping experiences to remain competitive and attract customers back in stores”.
Apart from pandemic situation, advancements in smart retail is also assisting the industry to gain higher demand, for instance purchasing finished goods via voice process; which is an artificial intelligence based smart retail which that will definitely ease the buying process and increase adoption rate. Following graphical representation shows what people usually buy using voice process.
Source: Voysis Limited
Smart retail is cost effective and profit making process for consumer as well as retailer respectively due to better supply chain management. However, impact of COVID-19 on supply chain of smart retail has been negative as movement of goods has been heavily hampered due to travel and logistics restrictions. Deliveries have been delayed to retailers as well as consumer. This impact on supply chain remains temporary as things are getting into routine with precautionary measures. In long term supply chain for smart retail will play the most vital role.
Steps taken by Smart Retailers:
Entities are now rising up with situations and changing operations by adapting to digital technology and smart retailing services. Right from small vendors to mega vendors; all the players in the market realized the importance of smart retailing and taking up digital solutions for better customer experience and offering to them. Apart from smart retailing giants such as Amazon and Alibaba; smaller providers are preparing to hold onto the opportunity. Even the small share of this big cake would benefit the entity immensely in terms of revenues.
For instance, Vivo a mobile manufacturer started “Vivo Smart Retail” (VSR) which will help them in sighting the demand for smartphones using its smart retail network in India.
Apart from this major retailing stores have enabled AR based systems to enable customers portray customers in scanned clothes in smartphones. IKEA and Amazon are using AR-Kit for visualizing its furniture at your desired location. This impact fully reduces wait time and increases real time responsiveness.
Conclusion:
From the above discussed pointers, instances and statistics it can be concluded that smart retailing industry which was growing at healthy CAGR even before COVID-19 pandemics, have achieved steeply rising growth rate since the outburst of COVID-19 pandemic. Since, pandemic situation in coming months looks hazy and cannot be predicted; also safety measures imposed by regulatory bodies are changing rapidly which again indicates unpredictability; social distancing and contactless operations are predominantly allowing people access alternative retailing solutions; that’s where smart retail plays important role in daily life. Smart retail offer multiple benefits during these pandemics such as enabling contactless shopping, maintaining safe distance in shopping centers, more product engagement in shopping center using smart retail solutions, contactless billing and others.
On results of smart retail implementation, the President and CEO of 7-Eleven, Inc said, "Where we execute our strategy of retailer initiative, the stores that do it the best that are utilizing the infrastructure that we developed, utilizing the IT platforms that NEC has helped us develop, those stores are performing 43% better than the stores not using the system".
Above narratives from industry experts, it can concluded that market for smart retail is looking opportunistic in terms of demand currently and is expected to grow at greater pace in further months or years. In coming decade smart retail industry looks bright and can be seen as a grab at first go opportunity.
