REINVENTING RETAIL:

2017 RETAIL
VISION STUDY
TAKING RETAIL AUTOMATION AND
PERSONALIZATION TO NEW HEIGHTS
 ZEBRA’S 2017 RETAIL VISION STUDY
In the age of evolving shopper expectations and technology advancements, the global retail industry is in
the midst of a profound shift in retail operations. To gain a deeper understanding of retailers’ focus, concerns
and investment plans, Zebra conducted a global research study across a wide spectrum of retail segments,
including: specialty stores, department stores, apparel merchants, supermarkets, electronics, home
improvement and drugstore chains. The results of this study are shared in this 2017 Retail Vision Study.

RETAILERS CITE THE TECHNOLOGY TRENDS SHAPING THE FUTURE

PERCENTAGE OF RESPONDENTS PLANNING INVESTMENTS BY 2021

2021 70% 2021 68% 2021 57%

INTERNET MACHINE LEARNING / AUTOMATION
OF THINGS COGNITIVE COMPUTING Automation for packing and
Giving a digital voice to Analytics and predictive models shipping orders, inventory
people, processes and things to help retailers personalize tracking, checking in-store
to improve the customer customer experiences and inventory levels and assisting
experience, enhance supply enhance inventory demand, customers in finding items.
chainvisibility and expand forecasting and visibility.
revenue opportunities.

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PEERING INTO THE FUTURE
At retail chains around the globe, “smart” products, like smartphone-controlled home
thermostats and running shoes that track mileage and correct your form, are increasingly
dotting store shelves — from Paris to Peoria.

It’s part of a larger shift. Just as the Internet of Things,

TOP DRIVERS FOR an ever-growing network of web-enabled physical
TECHNOLOGY INVESTMENTS objects, is adding a new dimension to consumer
products. It’s also redefining how retailers are

1
bringing that very merchandise to market. Indeed,
Enhance the customer experience “smart” devices, powered with sensors and network
connectivity that collect and exchange data, are
2 Generate revenue weaving unprecedented business intelligence
throughout the retail ecosystem, from the warehouse
3 Reduce operating costs to the store floor.

4 Keep pace with competition Retailers are investing in IoT technologies — from
beacons that beam shoppers customized coupons

5
to radio frequency identification tags that track
Improve inventory management inventory — to simplify, enliven and customize the
shopping experience, generate revenue, and reduce
costs, revealed the study. They’re embracing IoT
TECHNOLOGY INVESTMENTS BY platforms to transform real time, visibility-driven data
2021: EMPOWERING WORKERS throughout the supply chain into actionable insights.

The shift to IoT technologies is an industry imperative

87% Mobile point-of-sale devices

to scan and accept credit or
to keep step with the shopping habits and expectations
of consumers reshaped by the tech revolution that’s
debit payments anywhere in still unfurling. Digital disruption — most profoundly,
the store online shopping and smartphones — has birthed ever
connected, savvy shoppers who have the globe’s
grandest mall at their fingertips.
86% Handheld mobile computers
with scanners to read And retailers, whether they realize it or not yet, are now
barcodes for pricing and largely catering to Millennials — who have eclipsed
availability
Baby Boomers as the world’s largest shopping
group and will comprise 75% of the global workforce
by 2025.* The key takeaway here: This group born
85% Tablets to engage with
shoppers and provide more
between 1980 and 1995 mark the first generation of
digital natives, for whom technology is second nature.
detailed product information
When it comes to the Internet of Things, stores
are paying attention: Nearly 70% of retail decision

78% Kiosks or stationary

information terminals
makers are ready to make changes required to
adopt IoT. Already, 21% percent of respondents have
for pricing and availability implemented IoT and another 27% are planning to
information deploy within a year.

*Edelman

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 GETTING ‘PHYGITAL’
While online and mobile commerce have transformed the shopping
experience, 91% of all retail sales are still generated in brick-and-mortar stores.* As a
result, merchants are investing in improving the customer journey via the digitization of
the in-store experience, getting “phygital,” so to speak.

Technology is playing Retailers are on a mission to streamline the shopping

72%
a greater role in journey for consumers, and mitigate shopping pain points
supplementing the that have long bedeviled store associates, like tracking
human touch to down inventory. To that end, retailers surveyed are
of retailers plan outsource mundane, placing a premium on implementing in-store IoT solutions
to reinvent their in-store tasks, freeing such as sensors on shelves, automated inventory
supply chain up sales associates to verification, as well as cameras and video analytics.
with real-time offer shoppers better
visibility enabled customer service — more Stores are banking on the shift to these “phygital”
by automation, critical than ever amid upgrades to provide an unprecedented, real-time
sensors and dwindling foot traffic, as picture of the actual inventory in the store — whether
analytics. consumers can buy most it’s on the shelf or in the back room, while upgrading
anything online. the customer experience.

RETAILERS’ TECHNOLOGY INVESTMENT PLANS: 2021

81% 75% 73%

Security sensors Sensors for IoT device and

tracking status network monitoring
of inventory for sale
(temperature, force, etc)

71% 70% 65%

Sensors for tracking Beacons for Automation and

customer footpath location-based smart sensing for
marketing inventory management
and planogram
compliance

*U.S. Census Bureau

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 THE PERSONALIZATION PUSH
Retailers are also turning to IoT technologies to personalize the shopping
experience. According to the survey, 75% of stores will not only know when specific
customers are in the store, but will also be able to customize the store visit for them by 2021.

Topping retailers’ personalization goals are knowing for that fashionista fitness devotee who’s been lingering
when specific customers are in store; knowing where by the yoga display.
customers are in the store; and customizing shoppers’
store visits. To make that happen, retailers are betting Stores are increasingly turning to micro-locationing
on location-based technologies to woo consumers at platforms to capture more data, accuracy and insight,
their precise moment of need. Merchants surveyed identify which aisles and products customers prefer, and
ranked locationing platforms, such as sensors that track analyze the in-store dance — from lingering at one end-
consumers’ footpath throughout the store and beacons cap display of hats to trying on seven wrap dresses in
that trigger in-store offers, as their key technology the fitting room — that leads to a purchase, or doesn’t.
budget goals. The goal is to generate concrete, actionable insights
Retailers have been testing beacons as a means on customer shopping habits and buying patterns by
to personalize shoppers’ in-store experience by tracking customers’ movements throughout a store, and
communicating with them on what’s become another note where people tend to linger. Retailers can leverage
appendage: their smartphones. this behavior data to make smarter merchandising and
marketing decisions, like boosting inventory levels of
These sensors are embedded throughout a retail store’s hot-selling products or measuring the effectiveness
digital touch points like shelves, signs and product of displays.
displays and can interact with mobile devices using
low-energy Bluetooth signals. They’re designed to send So when sensors detect a poorly trafficked area in a
shoppers contextually relevant in-store offers, like a store, for example, that real-time data insight alerts
special discount on a new 16-carat gold activity tracker associates to merchandising missteps.

PERSONALIZATION VIA IoT LOCATIONING TECHNOLOGY

35% 75% 30% 74% 27% 75%

Know when Know where Real-time alerts
specific customers specific customers deploying employees
are in store are in store to location in store
to assist shoppers

Location based
services
27% 79% 25% 74% 22% 71%
2021 75% Customize Alert when loyal Alert when customer
store visit customer walks is in the parking lot to
in the door pickup online order

2016 2021

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 ADAPTING TO A MULTICHANNEL
SHOPPING LANDSCAPE
The path to purchase is becoming more complex amid the ever-burgeoning growth of
online and mobile shopping. As a result, inventory accuracy, which is foundational in retail,
is more critical than ever as products from both brick-and-mortar and digital channels
flow through the pipeline.

Retailers are adopting According to retailers surveyed, the key sources

90%
technology solutions to of customer dissatisfaction today are out-of-stock
heighten merchandise merchandise, and the same product available for less
visibility throughout the at another retail store.
Superior supply chain, from the
omnichannel time inventory is shipped That comes as little surprise amid the rising
support requires from the warehouse and expectations of today’s empowered consumers,
90% inventory received in a store’s back who can tap into virtually every retailer’s stockroom
accuracy or room to when it’s stocked from their smartphone to search for products and
greater. and replenished on the compare prices, as eight out of 10 consumers use
sales floor. them as in-store shopping assistants.*

RETAILERS RATE FACTORS IMPACTING HOW RETAILERS ARE CREATING A

CUSTOMER SATISFACTION SEAMLESS SHOPPER EXPERIENCE

1 Out-of-stock (Empty shelf, wrong size)

Rate importance of integrating
78% e-commerce and in-store experiences
Same product available cheaper as important/business critical
2 at another retailer

3 Desired item not found

Connect customers’ activities
online with what they do in store 76%

*Deloitte

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 MOVING TO A SEAMLESS
CLICK-AND-COLLECT MODEL
Digital shopping has given rise to new consumer buying patterns, illustrated by the
growing popularity of buy online, pickup/return in store.

And new click-and-collect models continue to emerge. As the rise of online shopping has trained consumers
There’s curbside pickup, retrieval of online and mobile to demand unprecedented convenience, retailers today
orders from in-store lockers, and some commuters can must be nimble enough to serve their multichannel
even pickup their groceries at train stations. shopping journeys seamlessly.

Not all of these click-and-collect perks will take flight, but Retailers surveyed cited the integration of e-commerce
one thing is clear: buy online, pickup in stores is here to and in-store experiences, and fulfillment and delivery
stay. One need only look to the recent holiday shopping of online and in store purchases, as critical strategic goals.
season, when merchants generated a disproportionate
chunk of their annual sales, as evidence of that. To that end, they’re migrating from siloed supply chain
processes to unified commerce models with end-to-
While retailers routinely boost their staffing levels to end, digital and brick-and-mortar enterprise visibility of
handle the make-or-break selling season, in 2016, the workers, store associates, shoppers and merchandise.
big story was that much of that hiring surge was devoted In addition to warehouses, stores are also equipped to
to filling online and buy online pickup in store orders. double as distribution centers.

OMNICHANNEL CONVERSION AND FULFILLMENT

54% 88% 49% 90% 47% 89%

Buy in store, Buy online, Buy online,

65%
Exploring
ship from store
to home
pickup in store ship to home

innovative
delivery services
such as deliver
to where the 42% 85% 32% 77% 27% 75%
customer is: Buy online, Buy in store, return by Buy online, pickup at
workplace, home, return to store mail with return label third-party location
parked car from retailer's website such as convenience
stores and lockers

2016 2021

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 THE HIGH-TECH MAKEOVER OF
INVENTORY MANAGEMENT
Merchants surveyed are investing heavily in reinventing the supply chain with a focus
on tracking the status of inventory for sale — the heart of any retail operation.

They’re budgeting for digital upgrades, for example, that industry, retail inventory accuracy hovers at about 65%,
enable automated, real-time inventory visibility via IoT studies show. By contrast, RFID platforms can boost
technologies such as RFID. In fact, over 70% of retailers inventory accuracy to 95%, while out-of-stocks can be
surveyed plan to provide, or are currently providing, reduced by 60% to 80% with item-level RFID tagging.
item-level RFID technology.
Other payoffs for retailers include reduced inventory-
After being implemented by retailers in fits and starts related costs. For example, apparel and footwear
since the dawn of the Millennial, RFID’s time has come. retailers have reported inventory labor reductions of
In what’s been called the next generation of the barcode over 75% by moving from manual to RFID automated
that was long cost prohibitive, RFID platforms have item counting.
dropped in price, achieved wider global standardization
and as result, retail adoption has soared. What’s more, item-level RFID has generated increases
in the number of sale items per transaction by as much
But the bigger impetus for retail implementation is the as 19%, and a rise in the number of transaction by as
technology’s potential return on investment. As an much as 6%.

UNDERSTANDING THE COST OF INVENTORY

$1.1
TRILLION
Worldwide cost of inventory
distortion, including overstock,
stock outs and shrinkage* 10% Reducing stock-outs and
overstocks can lower
inventory costs by 10%*

PLANS TO AUTOMATE INVENTORY VISIBILITY

ALERT OF STOCK OUTS VIDEO MONITORING OF INVENTORY
49% 29%
87% +38% 76% +47%

PRODUCT LOCATORS ITEM-LEVEL RFID

38% 26%
78% +40% 75% +49%

AUTOMATED INVENTORY VERIFICATION SENSORS ON SHELVES

35% 24%
82% +47% 69% +45%

2016 2021

*McKinsey & Company

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 A DEEP DIVE INTO DATA
Merchants are also investing in business intelligence and analytics
technology solutions to take data insights to new heights.

While retail data analysis intelligence and analytics technologies lead their
is nothing new, the reams strategic goals, retailers ranked market-basket analysis,
of consumer information customer segmentation and centralized customer data
generated in the era of and intelligence as their top tech initiatives.
digital shopping, along

73%
with the rise of technology Market-basket analysis, for one, is a timeworn modeling
equipped to handle and technique used by merchandisers to decipher which
analyze the surge, is types of products shoppers are more apt to purchase
of retailers rate recasting how retailers together. It’s a wide-ranging tool, as basket analysis
managing big determine what to sell, offers insight into consumer patterns, preferences and
data as important/ how to sell, what’s selling, shopping behavior, regional trends, as well as reveals the
business critical. what’s not and why. relationship between products for sale. Combined, these
insights inform factors from store layout to marketing.
Digital data analysis is And now the modeling technique is being automated by
still in its infancy, but its payoff is promising: Companies big data.
that integrate data and analytics into their operations are
poised to generate productivity and profit gains that are Sophisticated analytics platforms are transforming reams
an estimated 5% higher than competitors that don’t.* of market-basket data into insights ripe for actionable
merchandising strategies, like a supermarket placing
Hence, it stands to reason that 58% of retailers surveyed snacks next to baby wipes during the football season,
are budgeting for big-data solutions for storing and for example, when Dads are shopping for both their kids
analyzing IoT generated data. When asked what business and their couch-potato stash for the game.

BUSINESS INTELLIGENCE INVESTMENTS BY 2021

79% 79% 78% 77%

Cameras and video Loss prevention and Software analytics Big data solutions
analytics for inventory visibility for loss prevention, for storing and
operational purposes elements enabled by price optimization analyzing IoT
operational technology generated data

75% 75% 72% 72%

Predictive analytics Cameras and video Visual analytics Cognitive computing
analytics for customer for making sense out of to drive optimizations
experience IoT data and insights

*McKinsey & Company

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A GLOBAL VIEW
Around the globe, retailers are investing in IoT technologies to redefine their operations
and the shopper experience. Merchants are reinventing their supply chains with
upgrades that enable automated, real-time inventory visibility via IoT, such as RFID,
which can boost inventory accuracy levels to as high as 95%. Their emphases and
progress across a swath of retail tech initiatives vary per region.

79% NORTH AMERICA

In North America, more retailers are investing in IoT technologies
Plan to invest in
automated inventory such as automated inventory verification and sensors on shelves,
than their global counterparts.
verification

LATIN AMERICA
Fewer merchants in Latin America can customize stores today than
85%
Plan to use technology
in other parts of the world, but the region is putting a big emphasis to customize the
on technology to personalize and enhance the in-store experience.
store visit

75% EUROPE
Retailers in Europe are investing in location technology. Today,
Will soon know where
specific customers are 36% know when specific customers are in a store and that number
is expected to grow exponentially over the next five years.
in their store

ASIA PACIFIC
Retailers surveyed in the Asia Pacific Region expect more shopping
79%
Plan to support buy
to migrate from brick-and-mortar stores to online channels in the online, pickup at
future than their international brethren.
third-party location

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ABOUT THE STUDY
RESPONDENTS BY GEOGRAPHY

24% 33%
CANADA / U.S. FRANCE / GERMANY /
ITALY / SPAIN / UAE / U.K.

15% 28%
BRAZIL / CHILE AUSTRALIA / CHINA /
COLOMBIA / MEXICO HONG KONG / JAPAN /
NEW ZEALAND / SINGAPORE /
TAIWAN / THAILAND

BY REVENUE BY NUMBER OF STORES

6%
31% 69% 48% 1000+
TIER 1 TIER 2 1 TO 50
(> $1 Billion (From $250 22%
Revenue) Million to 501 TO 1,000
$1 Billion
Revenue) 11% 13%
51 TO 100 101 TO 500

BY SEGMENT RETAIL AREAS

Specialty Stores 20% Front of store 63%

Department and Apparel Stores 19%
Back of store 57%
Grocery/Supermarket 17%
Electronics and Entertainment 11% Marketing, customer
incentives, corporate office 52%
Mass Merchants/Superstores 8%
Home Improvement 7% Warehouse,
Drug Stores/Retail Pharmacy 4% distribution centers 32%
Gas and Convenience Stores 2%
Shipping 28%
Other 12%

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 REINVENTING RETAIL
Retailers are investing in the IoT, a burgeoning network of physical
objects with web connectivity, to survive and thrive in the era of digital
commerce. They’re doing so to meet the heightened demands of today’s
savvy, empowered consumers, who have limitless choice and price
transparency online. These include Millennials, digital natives who
are now the world’s biggest buying group.

Merchants are turning to IoT technologies to simplify and enhance the

store experience, reduce operating costs and beget new revenue streams.
To that end, they’re automating manual processes, such as implementing
sensors on shelves to reduce out-of-stock inventory, a major source of
shopper frustration.

Retailers are also tapping technology to court shoppers with individualized

attention by investing in IoT data solutions for a granular understanding of
their customers, like a shopper lingering in the sportswear department, who
might be sent a coupon via a beacon sensor for her favorite clothing brand.

The makeover of retail operations platforms is critical to handling the deluge

of products traveling through the retail supply chain from both brick and
mortar and online streams. It’s one that must also serve today’s multichannel
shoppers and the growing appeal of click-and-collect models.

ABOUT ZEBRA TECHNOLOGIES

Zebra Technologies offers retailers industry knowledge, consumer insight and mobile
technology solutions to help merchants implement successful omnichannel strategies with
insight into store operations, associates, assets and inventory, shipment and receipts.

For more information visit www.zebra.com/retail

NA and Corporate Headquarters Asia-Pacific Headquarters EMEA Headquarters Latin America Headquarters
+1 800 423 0442 +65 6858 0722 zebra.com/locations +1 847 955 2283
[email protected] [email protected] [email protected] [email protected]

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