Remember the debate over e-commerce versus brick and mortar?
It didn’t last long.
Online and in-person selling quickly became complementary strategies and soon that model gave way to omnichannel retailing – delivering a seamless customer experience across all platforms including physical space, e-commerce, mobile applications, and social media. Today, 73 per cent of shoppers say they shop across multiple platforms. With information gleaned from customers at each touchpoint, retailers are able to create an even more personalised and engaging shopping experience.
Covid-19 and the changed demand-supply requirements kicked omnichannel into overdrive, forcing retailers to adapt and reimagine how they do business. With automation and artificial intelligence (AI) going from nice-to-haves to must-haves, industry experts now expect to see at least 70 per cent of retailers adopting AI in the next two years. Recently, Walmart reported an earnings increase of 2.8 per cent, thanks to AI and automated processes.
Technology also allows new levels of operational efficiency. For example, when supermarkets learn from AI that frozen snacks sell best on Fridays, they can stock those items accordingly in their warehouses. At the same time, a store’s automated systems can monitor and control refrigeration temperatures based on varying stock levels throughout the week. That’s important because overcooling by even 1ºC can increase energy consumption by as much as 3 per cent%.
For fashion and luxury goods retailers, AI and automation are equally important. It allows them to create a high-touch, personalised in-store ambience and to parallel that experience with unique online customer engagements.
At the core of omnichannel retail operations is the need for efficiency. This means optimising the supply-chain, minimising waste, and creating a memorable experience – all without increasing costs.
A key strategy for retailers is to incorporate their omnichannel adaptation with energy efficiency measures since energy consumption is a significant part of operational costs for all retail establishments. For restaurants, the greatest energy expense comes from cooking, water heating, and refrigeration. For convenience stores, it’s refrigeration, lighting, and space heating. And for non-food retailers, it’s lighting, cooling, and ventilation. In every case, the operating cost of these activities exceeds two-thirds of a retailer’s overall energy expense.
To underscore the impact that energy consumption has on the bottom line, consider this: most retailers operate at a 4 per cent profit margin. A 15-per-cent reduction in energy use will increase their profit margin to 4.75 per cent, which represents an 18.7 per cent increase in profitability.
Energy consumption, inventory management, and customer experience are tightly interwoven in retail operations. Optimising one inevitably involves the other two, necessitating a holistic approach. End-to-end solutions such as connected products, sensors, controls and software are designed to provide retailers visibility and control of their energy use and resources across the entire retail value chain. They can capture critical data about every aspect of their operations, convert the data into meaningful analytics, and drive action through real-time information and business logic.
For business owners, it allows them to easily find ways to reduce costs, boost revenue, and to automate daily tasks to devote more time to customers, resulting in a better online and in-store shopping experience. In physical locations, these solutions will create a comfortable, engaging retail environment, improving lighting, air quality and safety.
Solutions like this are also modular and scalable. Retailers can adopt and deploy capabilities as budgets permit, which is especially helpful during uncertain times.
A digitised, hyper-efficient world
For retailers looking to embrace their industry’s new digitised, hyper-efficient world, EcoStruxure for Retail by Schneider Electric provides the end-to-end connected solution to perform proper operational monitoring, analytics and improvement across all their platforms. It can optimise energy use and increase efficiency to save money while advancing their commitment to sustainability. Visit our website to find out more.