In many ways, retail remains at the vanguard of digital transformation, sitting closest to changing consumer demands and with the lowest barriers to entry for disruptors.
But nobody could have prepared retail executives for the virus-induced global lockdowns that confined shoppers to their homes and reduced physical trade to practically zero. These sudden new dynamics forced retailers to rethink how they could operate in digital-only, low-contact environments, and underscored the need for agility and resiliency.
Now, the issues facing retailers are multiplying again. Even digital-native challengers are not immune to supply chain shocks and must reinvent themselves. Leading retailers are looking to expand their service offerings into other industries to engage with consumers outside of retail, such as banking, healthcare and manufacturing. This market convergence caters to consumer expectations for integrated cross-sector experiences (such as checking in with a doctor while shopping for groceries) and enables retailers to attract customers who would otherwise head elsewhere.
Such profound diversification poses new complexities, spurring conflicting priorities and increased competition. In addition to tussling over market share with competitors, retailers are pressed to attract new talent pools to drive transformation journeys forward.
Talent shortages have hit retailers particularly hard. Droves of shop floor workers have found new forms of employment or are simply looking outside of traditional retail opportunities after the tough operating environment of the past two years. Moving into other markets also puts retailers into direct competition for knowledge workers with industries that face different economic realities and, as a result, can pay more for the best talent.
For retail, the future is far from certain. And in a cutthroat market, there is little room for failure, and even less for those who hesitate. Recent Economist Impact research supported by Cognizant suggests a tough road ahead for retailers, albeit a road peppered with opportunity, beginning with their technological investments.
Technology provides security in an uncertain world
Respondents were asked which technologies and methodologies their business has adopted or is planning to adopt in the next two years. (Percent of respondents)