Success necessitates a comprehensive and long-term strategy that must be implemented immediately, the longer companies wait to design and implement their strategy, the higher the risk of falling behind. Every retail management team in the UK should prioritise technology and workforce transformation.

Two elements are driving a digital revolution in retail in the UK. One factor is consumer behaviour, which is changing as more people embrace e-commerce, opt for smaller shop formats and connect with retailers in new ways across platforms. The cost of matching new expectations while fending off competition from digitally native merchants and discounters puts tremendous pressure on legacy businesses' profitability.

Retailers will need to re-imagine the fundamental form and role of physical shopping to flourish in a world of growing technology. Technology can improve the consumer experience and cut retailer costs, but it will also modify the range of jobs that must be completed to maintain a shop. Rather than simply automating the present operating paradigm, merchants should rethink their entire customer and staff value propositions.

Retailers in the UK are looking to enhance their e-commerce platforms and improve customer experience:

In-store shopping experiences are being enhanced by data analytics, digital displays and shelf-monitoring devices by many businesses. The goal is to improve retail productivity, consumer access and personalisation. Retailers are also incorporating technology into many supply chain touchpoints. As an example:

  • A robot can scan shelves for out-of-stock items, send a restocking request to the backend system and have a robot fill the shelf with minimum human participation. These systems, according to retailers, make the supply chain more agile. U.K. businesses are also embracing drive-through pick-up sites after shoppers have ordered things online. Micro-fulfilment centres are popping up in some small-format retail establishments in residential areas.

  • Grocery stores are beginning to look at automated picking and packing systems, combined with artificial intelligence-based delivery logistics algorithms to expand online delivery. Fashion retailers are using smart-fitting technologies to help shoppers choose the right size clothing.

  • Retailers in the UK are also turning to hybrid operating models, in which humans and technology collaborate to supply services. This hybrid paradigm is being used by retailers in store operations, customer-facing technologies, supply chain and online and backend operations.

  • Some retailers, for example, are providing store employees with wearable devices to assist consumers, while others are introducing self-service checkout kiosks to eliminate cashiers.

  • Machine learning is also being used by UK businesses to gain a better understanding of customer behaviour online. For inventory tracking, retailers are also experimenting with algorithmic retailing, artificial intelligence and the Internet of Things, allowing their employees to better serve customers and make shop spaces and procedures more efficient and intelligent.

The nature of physical shopping must be reimagined by retailers. The function of stores is evolving from single-use self-service structures to multi-use click-and-collect touchpoints as the consumer landscape changes. This, combined with increasing market pressure, is pushing merchants to embrace the technological revolution.

Technology can both enrich the offer to consumers and reduce costs in the long run, but capturing these benefits means reimagining the operating model. For instance, adding click-and-collect may initially increase costs as labour replaces the customer shopping trip, but the upside from an improved value proposition and savings from automation elsewhere could soon outweigh this. Automation and technology will change both customers’ and employees’ experience in the store. Here are a few key areas that technology is reshaping in retail:

Technology will reshape retail employment:

To give a better customer experience, workers will require additional socioemotional and problem-solving abilities, as well as new technical talents to work alongside and run robotic technology. Adaptability to master a broader range of duties and manage responsibilities across departments or even stores will be highly valued.

Furthermore, automation can shield shops from changes in the availability of suitable labour, such as changes in immigration policy or the changing objectives of the next generation of workers. Retailers must rethink how labour is done as duties and skill needs change. In response to the concerns raised by job automation, technology can help retailers develop new labour-model solutions that will increase their employees' access to shift employment. New modes of working can provide employees more autonomy and allow for better arrangements to meet individual needs. Automation will diminish some tasks, expand others and create new ones.

Because the retail business is so broad and diverse, its evolution, particularly in terms of retail job changes, has a national impact. Retail is the largest private employer in the UK, employing about 4 million people, or 13.8% of the workforce. Despite this, it is growing at a slower rate than the rest of the economy and has yet to fully recover from the Great Recession.

Retail employment has decreased by 4.4% since 2008, while overall employment has increased by 9.2%. It is estimated that technology will displace up to a third of present retail tasks by 2030, thanks to channel shifts and automation. The rate of disruption will be determined by how quickly businesses adopt new technologies. Technology can also enable new labour models and worker arrangements.

Technology is changing the activities and skills necessary in retail occupations and it is also changing how businesses organise their employee relationships. The expansion of the freelance economy, in which non-employees provide labour through on-demand digital platforms, is the clearest example so far.

In 2016, 4.7% of UK adults freelanced at least once a week; by 2019, it had doubled to 9.6% and it continues to rise. Retailers can vary their labour models (to include freelance workers or new employee relationships), but they must change their talent processes, such as how they match individuals to jobs and evaluate performance. For employees, it might mean more control and a better match.

Companies will be able to construct more exact, regular timetables for workers. They can digitally offer workers last-minute shifts when necessary and workers can even exchange shifts among themselves to build timetables that suit them. The option to digitally assign marginal shifts can also help part-time employees who seek more work obtain full-time status.

From recruiting and talent management to scheduling and compensation, entrepreneurs are already looking into how technology can improve human resources. Humanity, for example, is a cloud-based employee scheduling tool that helps businesses optimise their daily staffing while also allowing employees to control their schedules by setting their availability and trading shifts without having to involve management. Gig, Coople, Syft and Catapult, for example, connect hourly employees with companies in the hospitality, retail, warehouse, security and other industries.

Technology hindrances in the workforce:

Technology adoption will differ between large, well-capitalised businesses and smaller retailers: 44% of current retail employment is in businesses with fewer than 100 employees and 39% in businesses with fewer than 50 employees; these smaller businesses are far less able to invest in technology at scale than the rest of the industry.

The benefits of technology:

Customers will benefit from technology that simplifies and personalises shopping experiences, while retailers will benefit from a more productive operating model. Technology savings could be critical in offsetting rising labour inflation, or they could be leveraged to strengthen or distinguish the value proposition in a variety of ways.

  • Reinvest in human customer service: Technology is being utilised to shift staff away from monotonous and manual duties (such as inventory and price checking) and into more direct interactions with customers to answer inquiries and assist with sales. Wherever possible, technology aids workers (e.g., wearable technology that provides them with information to assist customers).

  • Improve digitised customer service: Throughout the shopping experience, technology is used to give consumers detailed information and personalised touchpoints (e.g., digital signage) as well as convenience (e.g., automated dispensers). In a digitally advanced shop, human labour complements technology where it is needed.

  • Product and price differentiation: Technology decreases labour costs for retailers (e.g., self-checkout directly replaces cashiers), cutting overall prices. Savings can be used to differentiate products or passed on to customers in the form of lower prices.

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