Impact of Developing Technology on the Retail Industry - Essay Example

? Impact of Developing Technology on the Retail Industry Technology is rapidly changing and transforming almost every sector of the economy. Most organizations are doing their best to keep track with the changing global trends, otherwise they risk being phased out. As these trends remain unpredictable, steps have been made to ensure that organizations develop relevant and helpful strategies that will foresee the future. The retail industry is one of the major victims of these global changes. Lifestyle change, changing consumer needs, change in shopping patterns, increased online traffic, and time inadequacy are some of the reasons necessitating the need for technology in the retail industry. The focus is on improving competitiveness and taking advantage of the available opportunities. The need for shops is increasingly becoming obsolete with the changing technological trends. Online systems have led to the creation of virtual shops that are slowly replacing the convectional shopping centers. This trend is expected to increase with the future predicting a possible phase off for shops. This revolution has been experienced in several sectors, Apple was one of the corporations that championed this paradigm shift through online marketing and use of its applications. Many record shops have been closed in the near past because of the changing patterns in buying of movies and music as initiated by Apple. Purchase of music online has become so prevalent not only in the United States and in Canada but in other countries including the underdeveloped countries. This trend is gaining popularity in the sale of books, Amazon, eBay among others continue to expand for the convenience and efficiency that they give to their customers. Competition has enhanced advancement across the retail markets worldwide. Technology has been the central focus for many retail outlets. Despite the fact that most of the retailers are still on profit, their margins continue to decline. This has prompted a game change that has helped them keep ahead of competition. Home Depot, a company that deals with selling household items has been able to adopt technological changes. The company developed a mobile application that not only did it enhance the customer experience but also facilitated the associates in taking inventory. The company and its customers have received this strategy with a lot of optimism. Competitiveness has also facilitated research in strategies that are predicted to enhance sales as well as increase the customer base. The pressure from competition will force the optimization of the supply chain in order to provide a better customer experience as well as remain on a profit-making trend. The number of physical stores is expected to dramatically reduce. The so called ‘brick and mortar’ establishments are likely to remain but technological change has to be coupled with the change. However, the change will come with a drastic reduction in these outlets. Another phenomenon expected to be coupled with the reduction in the number of stores is the reduction in their sizes. The main reason for this is the increased business online capable of enhancing the decisions to lease, facilitating merchandising plans and transforming the physical layout. With the reduction of the physical locations and the size of the premises, diversification is of great essence (Sohl, 2012).. The retail market can divert its activities online as well as diversifying to the other areas of the product supply chain. In addition, they can result to offering services. Technology will facilitate the retailers to refocus on customer loyalty while enhancing closeness with the customers. Loyal customers will keep on buying fro the same retailer irrespective of the change. However, in order to facilitate their shopping experience it is obligatory that they keep abreast with change, even loyal customers deserve quality and efficient services. Despite being top on the retail of household items, Home Depot developed a mobile application that facilitated the customers in finding the exact location of goods in the store. The company invested heavily in the mobile devices and it seems to be paying off. Such a technology will continue to facilitate the company in retaining its customers as well as attracting youthful customers that admire the technology. A variety of customer experiences facilitate retention of customers, these include, differentiated in-stores, customer loyalty benefits and enhances models of delivering services. Digitization facilitates the ability to make transactions. The world has shifted from cash payments to plastic money hence enhancing the shopping experience. With the shift to online trading, more transactions will occur translating to multiple ways of shopping such as development of virtual stores, mobile trading, online shopping and social commerce among others. Therefore, with the efficiency derived in transacting their businesses, it is expected that the level of trading will be boosted hence making ore profits. Retailers who fail to embrace these technologies risk losing customers because of their modes of payment (Valerio, 2012). Digitalization has tried to create a global platform, in which an individual can transact from wherever location they are in worldwide. This means it is possible to purchase specific goods from a favorite store efficiently. Technology as a driver of the economy has facilitated collaborations and synergistic developments in the retail industry. In order to advance uniformly some companies have merged efforts to develop technologies that help them compete effectively with already established retail companies. A report released by the Altimer Group indicates that there were 200 business start-ups, some of which were funded by venture capitalist. The report reveals that among the best thirty start-ups, 73% of them utilize social networking platforms. It is expected that further collaborations will promote establishment of new products and services that will give a better customer experience as well as the facilitation of the retail operations. Synergy reduces competition and fosters creativity and innovativeness. The change in technology has created a new dimension of action in the retail industry. The so-called ‘pop-up’ world has been adopted to help the retailers adjust to the prevailing customer needs. This strategy ensures that retailers keep on changing their location from time to time in order to serve their customers efficiently. Pop-up stores are capable of facilitating cost reduction strategies for goods and services hence saving on the cost of doing business. In addition, they play a role in giving opportunities for brands, creating some instant buzz and short-term leases by giving allowances to non-committal exposure. The concept has been widely accepted, with major brands such as Gap and Nike embracing it. Some companies have capitalized on this aspect to benefit fro the changing trends. Start-up Republic Spaces has facilitated the boutique industry by establishing pop-up stores, these attracts a new crop of artisans, designers, brands among others. The company provides these individuals with stores for their short-term use. Employment sector is facing a paradigm because of the emerging technology in the retail industry. Organizations are competing for talent and skilled individuals that are capable of providing real-time solutions to the changing technological and market trends. Redundant employees cannot cope in such challenging environment resulting into lay offs. The management retail stores have sought solutions from within and without the organization in order to meet the customer needs and sustain profitability. Despite providing job opportunities to a number of skilled personnel, the industry has continued embrace technology leading to job loss, not necessarily due to incompetence but their jobs are taken up by technology. After the introduction of the mobile application to help shoppers, Home Depot had to lay off some of their staff because their jobs were taken up by the technology. It is expected that with the reduction in the number of retail outlets and their size, more employees will lose their jobs. Efficiency is vital in every business, the emerging 3D printing technology the robotics are expected to revolutionize the retail industry. These upcoming technologies are expected to change the entire perception of how retail markets will be configured. These powerful technologies have a myriad of benefits, especially given that they will promote automation. Automation enhances efficiency, it is safe, easy to use and above all, it adopts a simple model that is less expensive and long lasting. However, the technology comes with job retrenchment and chances of copyright theft, as the 3 D printing technology is capable of printing straight from open-source designs. In the end, the technologies when fully-fledged will enhance the way the retail industry operates. Less human labor will be required as the level of efficiency and customer experience is enhanced. E-commerce continues to impose a great threat to the retail industry especially the physically locatable businesses. Dwindling profitability, reduced viability and declining values characterize the retail outlets that have continued to uphold the convectional selling system. Creativity, innovativeness and careful monitoring and evaluation are the ingredients of a successful organization in the 21st century, failure to which an organization will suffer loss and may end up closing down. The remedy to these organizations’ woes is keeping abreast with the technological dynamism. E-commerce is a great transformation in the sales and marketing sector, it has revolutionized the way people get to shop as well as the effectiveness of delivery of goods considering the inadequacy of time. In addition, it has facilitated intra global networking and trade. This is a good move given that individuals have a platform of accessing goods and services from whichever part of the world (Valerio, 2012). Technology comes with many legal implications. It is important the organization understands the consequences of technology. Such aspect as copyrights, patents, trademarks and other intellectual property rights should be adhered to. Apart from these, other legal formulations accompany consumption of technology. Retailers should be very much aware of the implications and strictly adhere to them. On sixth of October 2013, Airbnb had complained of their huge fine slap by the Attorney General over taxes, this is a common phenomenon among many other organizations including, Lyft, Uber and Sidecar among others. Incidences surrounding payment of taxes, copyrights, unfair competition and other constitutional violations have been mounted against them. These lawsuits can frustrate the efforts of companies hence becoming a source of their downfall. Therefore, it is important that organizations trend wisely in establishing collaborations as well as engaging in their operations. Technology comes with similar pressure to counter it. Despite the many benefits derived from the advanced technology, it is possible for fraudsters to use it for illegal purposes. Viruses have been used to mount attacks on computer-based systems. An attack on an automated system can lead to data loss and delays, such can cause irreversible results to the running of the retail operations. To get back the system running will cost more money hence interfering with the profit margins. To prevent this from occurring, organizations conduct regular audits of their systems to ensure that any potential attack is countered before it causes damage to the system. Hacking of the system can also cause a great fortune, some of the trade secrets and secrets of the retailer may be revealed hence making them prone to competition. Such competition is unhealthy and unfair to the organization, especially given the resources spent in adopting the strategies and the trade secrets. Evaluation of markets has been made possible through online trading. The consumers as well as the retailers are able to compare prices, in order to do price comparison. Some consumers will prefer outlets that provide quality goods that are less costly. In addition, other factors such as delivery of the commodities and the customer treatment are considered. On the other hand, the retailers are capable of regulating their prices appropriately to match with the market price in an effort to attract more customers. Apart from these services, the internet provides consumer platforms that make it possible for them to share experiences, customers pleased by the services of a given retailer will not fail to refer others. This type of social retailing has boosted some organizations while others have gained a bad reputation from the consumers. Retail industry has tapped input from technology giants that have sprung up to aid in implementation of retail technologies. In order, to understand the dynamics of technology in the retail sector, the management of these ventures has continued to outsource widely. This demand has created an opportunity for creative and experienced individuals to indulge into providing solutions. These organizations have aided several retailers to remain in the market and continue to thrive. It is worth noting that some retailers have contracted technology-based organizations to run the operations for them. In such a case, the liability falls in the hands of the contracted organization. This support is very essential since it facilitates the organization to focus on the future without fear as the business remains in the safe hands of specialists. Enhanced technology has promoted more innovations. The rising customer needs have promoted improved technology to take care of the specific needs. These have promoted innovations that have continued to keep retail giants on top of competition. Apart from the innovative mobile applications, further changes have been effected to incorporate changes in the designs and the general outlook of the stores. In Manhattan, Story is one such dynamic retail market that has continued to embrace change. It has often been described as a gallery for its appealing nature. They have adopted a system where they keep on changing the designs, the fixtures, and the merchandise as well as giving it a new theme. This happens after every four to eight weeks. This strategy has been predicted as a potential target for the any number of consumers who have little attention and they are in constant need of change. Embracing mobile technologies has facilitated the retail industry. An individual is capable of transacting at the comfort of their office or home, talk about buying goods or even requesting for services. Not only are mobile applications used in transacting but also it is possible to get straight to the internet and buy goods appropriately. With the portable nature of these devices, it has become very efficient to buy goods online and make payments. In addition, mobile money transfer and Western Union among other platforms have enhanced sending of money from one destination to another. Several retail outlets have adopted these mechanisms to ensure that payments are done effectively even when the customer is at a far country from the retailer. Through technology, the world has become a global village. Retailers are capable of communicating with the customers all over the world. They also get an opportunity to market their products through the internet. This has facilitated a great deal in the way businesses are operated. Social media has been very helpful to the retailers since it provides wonderful opportunity for their products to be known at very little or no cost. Facebook, Twitter and other social networks have been capitalized on by businesses to make their services and products known. The global communication is vital for business expansion. In contrary, retailers who have failed to embrace changes in technology have found their operations remaining local without much access to the global world. Retail outlets have been facilitated by technological changes to embrace diversification (Sohl, 2012). It is identifiable in several quarters that some retailers have shifted gears to cope with the changing trends that seek to make their operations obsolete. Instead of waiting for fate to take its position, they work on strategies to explore other opportunities in the same line of products or different. Such a strategy has helped organizations to remain in business while making profits. Retail outlets having diversified have portrayed a high degree of success, thereby affirming that diversification is helpful as a change of tact in a rapidly dynamic and technological environment. A retailer may chose to diversify as a short-term plan of sustaining the company’s profitability as they embark in proper strategies to sustain the company and advance its technology. Technology has facilitated individualized customer satisfaction. In this strategy, the main objective is to promote customer satisfaction hence creating loyalty. The convectional notion of treating customers in a blanket way is slowly fading away. Every shopper is in need of customized goods and services, a retailer who is capable of meeting such a need will be seen to outshine the rest. Such advancements are necessitated by technology(Valerio, 2012).. It has been reported that since the adoption of the mobile application by Home Depot, the number of young shoppers are embracing the retailer is increasing. A further advancement to take care of the personal requirements can steer the organization even to greater heights. It is expected that the battle will go further for retailers as the focus is slowly shifting from the usual reactive way to a predictive way, such that the customer’s needs are taken care of way before they shop. Online traffic has aroused a shift towards technology adoption. The world population at this day and age is enjoying the benefits of internet. It provides a perfect networking platform for all people across the board. This advantage is well captured and every retailer has a special interest with the internet. Retailers have gone to the heights of displaying their products in the online stores, and sure enough selling over the internet has grown. Some retailers have shifted gears to focus on special goods, specialization as well as dealing with second hand goods. The responses have overwhelming. The developing countries and the underdeveloped ones in particular have registered an unusual consumption of second hand goods. Businesses are thriving for the retailers who have focused on targeting these specific groups. Prospects of the online traffic continues to be extremely positive, therefore, the retailers should capture the opportunities and expand their businesses. It is evident that technology has effected heavily on the retail trade. Embrace of technology has kept many retailers ahead of others. It has facilitated diversification of retail products, improved customer experience and loyalty, improved marketing, enhanced mobility, improved mode of payment among other beneficial effects to the retail industry. However, technology has created unemployment, increased cyber crime, attracted lawsuits, slow phasing out of physical retail outlets among other detrimental effects. Despite the challenges, it is evident that the transformation brought about by technology is positive and deserving. References Global Trends, Key Trends to Watch For 2014 (Trends 1 TO 5) (2013, Nov). Retrieved on 12th, Nov 2013 from http://www.globaltrends.com/monthly-briefings/60-monthly-briefings/198-10-key-trends-to-watch-for-2014-trends-1-to-5 Retail Industry Technology Trend Survey Finds In-Store Data Collection Significantly up; Omnichannel and Mobile POS Top Initiatives. (2013, May 07). PR Newswire. Retrieved on 12th, Nov 2013 from http://search.proquest.com/docview/1348826038?accountid=45049 Sohl, T 2012. Diversification Strategies in the Global Retailing Industry: Essays on the Dimensions and Performance Implications. Retrieved on 12th, Nov 2013 from http://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/3987/$FILE/dis3987.pdf The Study '2008 Trends to Watch: Retail' Outlines The Role Of Technology In The Modern Retail Environment, Including the Expansion into New Emerging Markets. (2008, Apr 24). Business Wire. Retrieved on 12th, Nov 2013 from http://search.proquest.com/docview/444641723?accountid=45049 Valerio, D 2012. Digital Retail, Analyzing the Effect on Retailers. Ernst and Young. Retrieved on 12th, Nov 2013 from http://www.ey.com/Publication/vwLUAssets/Digital_retail:_analyzing_the_effect_on_retailers/$FILE/Retail_thought_leadership_Digital_Retail.pdf Read More