Retail Innovation Center's Quarterly Perspective
RIC Quarterly Perspective: March 2021
RILA’s Retail Innovation Center launched in 2017, formerly known as the RTech Center for Innovation. We recently dug up the original video promoting the Center and what an RTech Spirit embodied. This video is a great reminder of just how far the retail industry has come, what predictions and trends have since materialized, and others that may have fizzled out. It also serves as a fun callback for the launch of our RIC Perspective – a new quarterly article that explores the trends we are seeing today and how innovations continue to move the industry forward.
At this point, it seems trite to highlight the COVID-19 pandemic’s acceleration of retail innovations over the past year, but sometimes seemingly trite is just right. Within the first few months of the crisis, retailers adopted an ‘adapt to survive’ mentality while closures were at their peak and employees transitioned to telework. Consumers were shopping online more than ever before, yet shipping delays mounted and consumer needs intensified. Perhaps most daunting was the prospect of "bet the company investments in technologies" for an unpredictable future.
But one year later, retailers are fortunate that their dedication to solving these challenges has proven critical to the leapfrog effect we are seeing across many strategic roadmaps.
Speed of Change: Adaptability
The sheer speed of change made many of 2020’s innovations possible. “Click-and-collect” multiplied over the year with consumers largely being forced to shop online. For retailers, this meant beefing up omnichannel capabilities and rethinking how their brick-and-mortar locations could support the shift to more BOPIS. These format changes will likely be here to stay as customers are now much more adept at multi-channel shopping. They have been trained to expect fast delivery but are willing to make concessions accompanied by transparent messaging.
One question that remains is whether retailers can continue to accelerate at this pace moving forward. It is unlikely that most companies will be able to sustain the rapid iteration that 2020 demanded, opting to protect the well-being of their most important assets, the human capital involved. This is not to say that retail innovation will stall, but that it may not accelerate as many customer-facing initiatives all at once. With that caveat, we still anticipate a second acceleration in the back half of 2021 as retailers fine-tune many of the pandemic-driven innovations by upgrading to more polished integrations that connect to in-store experiences. With the general public looking to emerge from behind their telework screens back into the real world this spring and summer with the help of vaccines, there is an opportunity for renewed vitality in brick-and-mortar stores. For example, creative partnerships between Levi’s x Target, Sephora x Kohl’s, and Yeezy x Gap are already creating buzz around the industry.
Moving Forward: Cloud Infrastructure
Even today, many aspects of retail operations are living on legacy systems that were never designed to handle the volume of eCommerce or the further integration of systems across the organization. At some point, the continued success of innovation will require organizations to modernize their technology infrastructure. While both expensive and time-consuming, transitioning to cloud infrastructures will open new opportunities for retailers. Partnering with startups and other third-party solution providers will become more efficient and easier to manage. With new retail models around DTC constantly emerging, the stakes are high for retailers to invest in long-term digital strategies. We are seeing our members take major steps in this regard with the Albertsons x Google Cloud partnership being the most recent example.
Retail is a resilient industry, but leading retailers have learned important lessons that will guide the next chapter of retail.
At RILA’s Retail Innovation Center, we are working to help leading retailers navigate those challenges by connecting retailers with the startups, investors, and technologies that will drive retail in the 21st century. Looking for more? Visit the RIC’s Insights on-Demand page for blogs, webinars, and startup pitch videos.
For any questions about the Retail Innovation Center, please reach out to Ireti Adesanya, Content Producer, Retail Technology & Innovation.