The Future of Retail is Coming Are Retailers Ready?0ca36445185fb449d582-f6ffa6baf5dd4144ff990b4132ba0c4d.r41.cf… · Introduction: The Future of Retail is Coming / 4 State of Retail

The Future of Retail is Coming...Are Retailers Ready?

A Three-Stage Approach to Meeting Consumer Demands Today and Becoming Technology Innovators Tomorrow

The Future of Retail is Coming...Are Retailers Ready?

A Three-Stage Approach to Meeting Consumer Demands Today and Becoming Technology Innovators Tomorrow

The Future of Retail is Coming...Are Retailers Ready? 2

Contents

Executive Summary / 3

Introduction: The Future of Retail is Coming / 4

State of Retail Technology: Customer Expectations vs. Retailers’ Priorities / 5

Realizing the Potential of Retail Technology in Three Logical Steps / 8

Where the Rubber Meets the Road: Overcoming Barriers to Becoming a Retail Innovator / 14

Conclusion / 18


Executive SummaryAs consumers and retailers embark upon another year, the opportunities are limitless as to where

technology will take us next. Thanks to rapid enhancements and additions to existing shopping

experiences, along with the continuous release of cutting edge technologies, there is no question that the

future of retail is already upon us.

But with this potential on the horizon, are retailers ready to pioneer these technologies? Are consumers

receptive to what the future of technology holds? And can retailers actually implement the technologies

needed to capitalize on market opportunities given their current operations?

These questions are the focal point of this report, which is based on the opinions, insights and challenges

provided through survey results from hundreds of retailers and everyday consumers. Their thoughts serve

as the core of these discussions regarding the technologies at our doorstep, and more importantly, how

retailers can take the driver’s seat in becoming tech innovators.

HIGHLIGHTS FROM THE STUDY INCLUDE:

• Although most retailers are aware of what technologies are or will soon be available, many are behind

the curve. As only 31% of our survey respondents consider themselves to be “omni-channel integrated,”

the majority of retailers are struggling to implement expected technologies of today, preventing them

from exploring the tools of tomorrow.

• Consumers tell us that bridging the online and in-store experience matter to them most, with retailers

generally ranking those types of omni-channel capabilities as their highest priority. Although this

alignment between retailers and consumers may initially be perceived as positive, the larger issue is that

neither side is actively pushing the other to advance retail technology beyond the status quo.

• In order for retailers to take the lead in creating new technologies, a three-step plan is recommended:

1) Close the omni-channel gap; 2) Harness the power of mobile to unify shopping experiences; and 3)

Work to create an environment that paves the way to being first to market with new retail experiences.

• The top barriers for organizations when implementing new retail technologies are “insufficient financial

resources,” “difficulty implementing backend technology,” and “a lack of education and training

of employees.” These barriers are consistent across organizations, regardless of their revenue or

technological sophistication.

• One consistent barrier to innovation is a retailer’s existing toolset, with 45% of retailers indicating it

takes 6-12+ months to implement a new technology on their existing ecommerce platform.

• The perceived “Big Brother” effect is a much smaller barrier for consumers to adopt new technology

than retailers might think, with consumers expressing no major objections to any emerging

technologies, and 35% indicating they would be comfortable with a full list of new retail experiences.


MethodologyMozu created and distributed two surveys in September 2014 to gather the information used to build this

report. The first survey consisted of 15 questions and was shared with retail professionals, namely CEOs

and IT leaders, of which 300 completed surveys were returned. These retailers span a wide range of

industries, including B2B and B2C. The second survey was provided to shoppers who had made an online

purchase within the past six months, totaling a sample size of 1,000. Upon receiving both surveys, Mozu

conducted an internal analysis, comparing and contrasting the responses from both sample groups and

reviewing specific data points provided from the individual surveys.

Introduction: The Future of Retail is ComingInnovations in technology have provided a flood of consumer insights retailers can leverage to create

shopping experiences that fully connect digital and physical shopping environments. The opportunity to

create brand consistent, hyper-personalized interactions across channels offers a plethora of benefits that

retailers should not ignore.

From beacons that send personalized notifications based on in-store location to geofencing technology

that serves discounts when consumers approach a store, and even augmented reality like virtual fitting

rooms now gaining popularity, what once seemed like the retail technology of 2030 is now at our doorstep.

Despite the development of these technologies, they are out of reach for most retailers, as their first

priority is catching up with today’s consumer expectations. Before retailers can begin capitalizing on the

opportunities these advanced technologies present, their first task is to fully blend the online and in-store

experience, working to implement basic omni-channel features like shop online, pickup/exchange in-store.

Thankfully, there is a clear path to actualize the future of retail sooner than later, and, even more

encouraging, consumers tell us that they are ready for the technology once it is available. Although the

path to innovation is straightforward in principle, there are significant barriers preventing retailers from

becoming independent and empowered enough to usher in this new wave of retail experiences.

This report will detail where retailers and consumers currently stand with technology advances, including

online, in-store and mobile, as well as provide a three-phase approach that will empower retailers to take

the driver’s seat of innovation. The report will also discuss significant barriers to taking that driver’s seat

and specific ways to overcome them.


C H A P T E R 1

State of Retail Technology: Customer Expectations vs. Retailers’ PrioritiesThe catalyst for introducing retail technology is analogous to the age-old question of the chicken and the

egg—do retailers push consumers to adopt retail technologies first, or do consumers pressure retailers to

create those technologies?

Based on combined responses from retailers and consumers, this question remains unanswered: retailers

and consumers are very much aligned with their perceptions of what technologies are most important

in today’s environment, with neither side pushing the other to reach the potential of what’s on the retail

horizon.

When we envision the future of retail technology, we often get ahead of ourselves by imagining an avant-

garde, “Jetsons-like” world. However, in order to reach that point, retailers must focus on the present, of

which consumers resoundingly state begins with fully blending the online and in-store experience.

ENHANCING THE ONLINE SHOPPING EXPERIENCE

When consumers were asked to rank which online shopping capabilities they would like to see in the near

future, they offered the following responses, listed here in order of indicated importance:

1. Buy online, pick up in-store on same day

2. Buy online, exchange in-store

3. Same-day delivery

Alternatively, when consumers were asked what online shopping features they had used in the last six

months, they echoed very similar features to those stated as desirable in the coming future:

1. Free returns & exchanges (57.1% indicated using this feature)

2. Buy online, pickup in-store on same day (49.6% indicated using this feature)

3. Buy online, exchange in-store (41.0% indicated using this feature)

FIGURE 1:

Comparing Online Shopping Capabilities Most Desired and Recently Used by Consumers

Capabilities Most Desired by Consumers Capabilities Used by Consumers in Last 6 Months

1. Buy online, pick up in-store (same day) 1. Free returns and exchanges

2. Buy online, exchange in-store 2. Buy online, pick up in-store (same day)

3. Same-day delivery 3. Buy online, exchange in-store


The similarities between what consumers say they want next and what they are currently using introduces

two points. First, consumers now expect and are using omni-channel capabilities in their daily lives, and

second, consumers are not clamoring to push retailers to release highly innovative technologies anytime

soon. This means that it ultimately becomes the responsibility of retailers to introduce technologies that

transform how consumers perceive and interact with brands.

Turning our attention to what retailers believe their customers will demand in the near future, upon asking

which online shopping features they think consumers would like to see in the next two years, retailers

provided a slightly different response, most frequently indicating these features as “Important” or “Very

Important:”

1. Same-day delivery (47.9% ranked as “Important” or “Very Important”)

2. Free returns & exchanges (46.6% ranked as “Important” or “Very Important”)

3. Dedicated mobile app (46.0% ranked as “Important” or “Very Important”)

Retailers’ responses are a bit more sophisticated than what customers are currently asking for, but retailers

also are not presenting a grand vision for releasing innovative and disruptive technology to shoppers.

Instead, in terms of the online shopping experience, retailers are only scratching the surface of what the

future has to offer.

EXAMINING OPPORTUNITIES FOR INNOVATION VIA THE IN-STORE EXPERIENCE

With the overwhelming majority of retail transactions continuing to take place in physical stores, what do

customers want to see in terms of the in-store experience, and do retailers share a similar vision?

When consumers were asked to rank which in-store shopping features they would most like to see in the near

future, consumers resoundingly indicated an interest in immersing mobile into the experience.

Here are their three most requested features, listed in order of popularity:

1. Receiving personalized discounts, product recommendations and rewards on their phones based on

location in a store

2. Ability to locate items and check product availability in-store via their mobile device

3. Push notifications to their mobile phone with store-specific offers when near or entering a store

Comparatively, when retailers were asked to rank which in-store features would be most important to their

customers over the next two years, their top responses included:

1. Mobile payments (touch-to-pay technology)

2. Ability to locate items and check product availability in-store via mobile device

3. Push notifications to mobile phone with store-specific offers when near or entering a store


In sum, the state of retail technology is of no major surprise, as consumers and retailers both look to bridge

the online and in-store gap, while looking to further blend mobile with the in-store experience.

But as we will now discuss, closing the gap between what consumers expect and what is being delivered

involves a long catch-up process for most retailers. The question is, can they act quickly enough to take

advantage of what the future of technology has to offer?

FIGURE 2:

Comparing Desired In-store Shopping Capabilities between Consumers and Retailers

Capabilities Most Desired by Consumers Capabilities Deemed as Important by Retailers

1. Receiving personalized discounts, product recommendations and rewards on their phones based on location in a store

1. Mobile payments (touch-to-pay technology)

2. Ability to locate items and check product availability in-store via their mobile device

2. Ability to locate items and check product availability in-store via mobile device

3. Push notifications to their mobile phone with store-specific offers when near or entering a store

3. Push notifications to mobile phone with store-specific offers when near or entering a store


C H A P T E R 2

Realizing the Potential of Retail Technology in Three Logical StepsConsumers are not just telling retailers what experiences they currently expect, but also what they hope to

see in the coming years. To keep pace with ever-emerging technologies, retailers must work to turn the tide

from sluggishly reacting to shifts in technology and instead proactively champion retail innovation on their

own. By becoming technology pioneers, retailers can regain control of guiding customer experiences while

reclaiming their long-term business planning.

Executing this goal is no simple task, as it requires a major adjustment of organizational attitudes. However,

retailers can enable this change by taking a three-phase approach:

1. Catch up by closing the omni-channel gap,

2. Push ahead of the pack by harnessing the power of mobile, and

3. Take the lead by being first to market with new retail experiences.

Step One: Close the Omni-channel Gap

Not only are customers pushing retailers to connect the online and in-store experience, these businesses

openly admit that they are behind the curve as they work to close the omni-channel gap.

When retailers were asked how “omni-channel integrated” they would consider their organization to be, the

top two answers were “Somewhat Integrated” and “Have Not Considered Omni-Channel Capabilities.” On a

brighter note, a combined 30.5% of retailers indicated they are either “Integrated” or “Fully Integrated.”

FIGURE 3:

Level of Omni-channel Integration

How omni-channel integrated would you consider your organization?

Fully integrated–12.5%

Integrated–17.9%

Somewhate integrated–29.2%

Not integrated at all–11.2%

Have not considered omni-channel capabilities– 29.2%


This data introduces two findings:

1. There are three categories of omni-channel readiness among retailers: 1) “Omni-channel Leaders,”

who say they are integrated or fully integrated, 2) “Omni-channel Standards,” who say they are

somewhat integrated, and 3) “Omni-channel Laggards,” who say they have not considered these

capabilities or are not at all integrated

2. Customer interactions will vary greatly between retailers within each category. For example, the

shopping tools and features provided by Omni-channel Leaders will usher in a new set of customer

expectations that will not be met by Omni-channel Laggards, introducing a risk of them losing sales

and favorability to retailers whose technologies meet or exceed customer expectations.

Retailers, on the other hand, deem these omni-channel capabilities as “Important” or “Very Important” to

their objectives

1. Seamless customer experience across channels (58.0% ranked as “Important” or “Very

Important”)

2. Mobile application offering (50.3% ranked as “Important” or “Very Important”)

3. Support for inventory and catalog management across channels (48.4% ranked as “Important” or

“Very Important”)

While each of these capabilities is necessary for retailers to bridge the omni-channel gap, they should be

reprioritized to place the most emphasis on supporting cross-channel inventory and catalog management.

This capability serves as the cornerstone for delivering the key omni-channel features that consumers

desire most, like buy online, pick up in-store.

One survey finding of note is that many retailers are not investing in technology at all. When asked which

technologies retailers plan to implement in the next 12 months—including consumer-requested capabilities

like buy online, pick-up in store—40.4% of respondents said “None of the above.” To provide context,

the majority of respondents not implementing any new shopping capabilities fell into the Omni-channel

Laggard category, indicating those retailers are positioning themselves to fall further behind.

FIGURE 4:

Overall Retail Technology Investments Over Next 12 Months

Which of the fo l lowing technologies do you plan to implement in the next 12 months? (Check a l l that apply.)

9.3%

Geofencing

12.8%

In-store beacons

29.5%

Mobile payments

17.3%

Buy online, pick up in store

10.9%

Augmented reality

16.4%

Dedicated mobile app

9.9%

Connected car

11.2%

Connected home

40.4%

None of the above

60

70

50

40

30

20

10

0


Of those retailers who indicated they will be making retail technology investments over the next 12 months

(most of which are Omni-channel Leaders), the following capabilities were most popular:

1. Mobile payments (49.2%)

2. Buy online, pick up in-store (29.2%)

3. Dedicated mobile app (27.6%)

The selection of technology investments, or lack thereof, reinforces the widening gap between retailers, as

Omni-channel Leaders continue to push their technologies forward at a more rapid rate. Even more telling

is what will occur beyond the next 12 months, as Omni-channel Leaders will surge ahead by investing in

technologies that lay the foundation for the second phase of realizing the potential of retail technology:

harnessing the power of mobile.

Step Two: Harness the Power of Mobile

The next step to achieving retail innovation is fully merging the in-store and mobile shopping experience.

Doing so will shift consumers’ use of mobile from a hindrance to an advantage for retailers—instead of

shoppers wielding their devices to showroom or find third-party discounts, retailers can create a setting

that converts more sales through a multi-touch, highly personalized mobile experience.

To begin, it is helpful to understand how shoppers use mobile within their larger retail experience.

When consumers were asked which activities are currently performed with their mobile devices, the top

responses included:

1. Comparing prices across stores (52.8%)

2. Checking in-store product availability (51.2%)

3. Searching for coupons or discounts when making an in-store purchase (41.3%)

FIGURE 5:

Investments Over Next 12 Months for Those Implementing New Technologies

60%

50%

40%

30%

20%

10%

0%

Geofencing In-store beacons

Mobile payments

Buy online, pick up in store

Augmented reality

Dedicated mobile app

15.7%21.6%

49.2%

29.2%18.4%

27.6%


This data outlines two important stories for retailers:

• Mobile has a deeper penetration with consumers than may be known, as only 15% of shoppers

responded that they don’t use their mobile device when shopping.

• Beyond usage, mobile has deeply altered consumer behaviors from just a few short years ago. Now that

shoppers have the world’s information at their fingertips, retailers must find ways to use mobile as an

advantage, instead of allowing behaviors like showrooming negatively impact sales.

Consumers not only rely on their mobile devices for shopping, they are also open to a deeper blend of

the mobile and in-store experience. As mentioned, the top three requested in-store capabilities all involve

mobile devices: receiving personalized discounts and product recommendations while in-store, being able

to locate items and check product availability via mobile, and receiving push notifications when within a

certain distance of a retail store.

Based on retailers’ stated investments in mobile-related capabilities over the next 12 months (Figure 5),

the right foundation is being set for retailers to turn mobile shopping patterns in their favor. By working to

develop proprietary mobile applications, then demonstrating those capabilities and benefits to consumers,

mobile-forward retailers can begin to establish comfort and familiarity between their technology and their

customers. This push toward consumer adoption of technology is exactly the type of buy-in that is needed

to move into the final phase of becoming a retail innovator, taking the lead to deliver experiences that

convert prospects into customers and build customer loyalty over time.

Step Three: Be First to Market with New Retail Experiences

The final step in realizing the potential of future technology is for retailers to implement new experiences

that meet and exceed customer expectations. This step is admittedly the most abstract and difficult to

achieve, as it requires a major shift in the mindsets of retail organizations and how they conduct business.

To demonstrate the importance of technology proactivity, think back to 2007 when Apple® “reinvented the

phone” by announcing its first-generation iPhone. As smartphone adoption skyrocketed in just a few years,

retailers and ecommerce platforms were completely caught off-guard, either waiting too long to respond

or taking a patchwork approach as they pieced together systems to meet rising mobile demands.

FIGURE 6:

Consumer Usage of Mobile While Shopping In-store

60%

50%

40%

30%

20%

10%

0%

When shopping, I do the fol lowing on my mobile device: (Check a l l that apply.)

Use my mobile device to make

online purchases

Check in-store availability

Compare prices across stores

Reserve a product for in-store pick-up

Search for coupons/discounts

when making an in-store purchase

Read reviews of the product I’m considering

I don’t use my mobile device for

shopping

38.9%

51.2% 52.8%

24.0%

41.3%37.0%

15.1%


This phenomenon of being blindsided by technology developments is exactly what can be avoided when

retailers shift their mindsets from passiveness to action. Not only will they better control their business’

roadmap, they will also enjoy the same type of brand lift that technology innovators, like Apple, have

enjoyed in recent years.

Some skeptics might ask, “How can retailers take the lead if customers aren’t actively seeking new

technologies? And more importantly, what if consumers aren’t willing to adopt these hyper-personalized

shopping experiences?”

While this question is valid, based on survey results, consumers are telling us that the “Big Brother” effect

should not be a deterrent for retailers looking to drive technology forward.

When provided a list of coming retail technologies, consumers were asked which, if any, they would be

uncomfortable using. Consumers replied with a solid vote of confidence, as 35.5% of respondents stated

that they “would be comfortable using all features.” Of those features that did show signs of hesitation for

adoption, none of them showed a high enough volume of concern to prevent retailers from pursuing these

technologies.

Features that might require additional efforts to encourage adoption include:

1. Augmented reality like virtual fitting rooms or interactive showrooms

2. Push notifications to mobile devices with discounts based on in-store location

3. Payment systems that accept mobile, touch-to-pay payments

Which of the fo l lowing in-s tore shopping features would you be uncomfor table with? (Check a l l that apply.)

FIGURE 7:

Level of Consumer Discomfort with Retail Technologies

Push notifications to your phone with store-specific offers when near or entering a store

Receiving personalized discounts, product recommendations and rewards via your phone based on your location in a store

Augmented reality such as virtual fitting rooms or interactive showrooms

Payment systems that accept mobile payments (touch-to-pay technology)

Ability to locate items check product availability in-store via your mobile device

I would be comfortable with all the features above

23.8%

23.0%

28.9%

24.3%

10.9%

35.5%

288

230

289

243

109

355

Total 1001


We have now outlined a clear path for retailers to drive toward technology independence and innovation

by: catching up with current omni-channel expectations, immersing the in-store experience with mobile,

and working to drive innovation without fear of being rejected by consumers.

But this final step of driving innovation, the one that requires the most effort, understandably holds

retailers back the most. And as retailers have shared, the barriers along the road are tall and abundant.


C H A P T E R 3

Where the Rubber Meets the Road: Overcoming Barriers to Becoming a Retail InnovatorRegardless of a retailer’s size or stature, all organizations encounter significant barriers when implementing

change. When it comes to becoming a technology leader, however, the roadblocks are particularly steep.

Barriers to technological innovation can ultimately be organized into three categories, including: 1)

Resource barriers, 2) Technology barriers, and 3) Attitudinal barriers.

RESOURCE BARRIERS

Resource barriers are macro-level roadblocks within an organization that impact a wide variety of teams

and departments, such as access to financial resources, availability of human knowledge, and freedom to

work within existing business processes.

When asked to rank a list of resource barriers upon implementing a new retail technology, these themes

were most often ranked as either “High” or “Highest” barriers (percentages reflect retailers who indicated

barrier as “High” or “Highest”):

1. Insufficient financial resources (34.0%)

2. Difficulty implementing backend technology (32.7%)

3. Lack of education and training of employees (32.7%)

While a lack of funds may not be the most surprising issue at hand, the hurdles faced by organizations with

higher revenues ($300M-$500M+) are intriguingly similar to those with smaller revenues (<$1M-$299M).

When asked to rank their resource barriers on a scale of 1-5, here is a side by side comparison of what

higher-revenue and smaller-revenue retailers had to say (percentages reflect retailers who indicated barrier

as “High” or “Highest”):

FIGURE 8:

Comparing Resource Barriers between High-Revenue and Lower-Revenue Organizations

Top Resource Barriers: High-Revenue Organizations Top Resource Barriers: Lower-Revenue Organizations

1. Difficulty implementing backend technology (29.6%) 1. Lack of education and training of employees (48.3%)

2. Insufficient financial resources (25.5%) 2. Insufficient financial resources (37.8%)

3. Lack of education and training of employees (25.5%) 3. Difficulty implementing backend technology (34.1%)


In summary, percentage-wise, lower-revenue retailers tend to view their resource barriers as more

problematic than their higher-revenue counterparts, but the similarities between the two are noteworthy.

Another interesting finding from this question indicates an education gap: lower-revenue retailers are

twice as likely to say they do not know what technologies are available compared to higher-revenue

organizations, 30% and 14%, respectively.

To look at a different segment, let’s now analyze the types of resource barriers facing Omni-channel

Leaders and Omni-channel Laggards. (Again, percentages reflect retailers who indicated barrier as “High”

or “Highest.”)

The takeaway is that Omni-channel Leaders face more difficulty in the implementation phase of

introducing new technologies, whereas Omni-channel Laggards’ largest barrier is simply getting the idea

off the ground.

While on the topic of technology, let’s now explore if the tools that retailers have at their disposal helps or

hurts their drive to retail innovation.

TECHNOLOGY BARRIERS

Technology barriers are implementation obstacles that specifically involve the tools required to bring a new

shopping experience to market. For retailers, the common denominator is their ecommerce platform, which

is instrumental in integrating inventory, marketing campaigns and content across channels. Unfortunately,

many ecommerce platforms introduce complications upon enabling new technology, which further delays

retailers from introducing retail experiences fast enough to capitalize on market opportunities.

When asked how quickly retailers can implement new technologies with their existing ecommerce

platform, 44.9% said it takes at least 6-12+ months for completion, with 26.9% claiming that it takes 3-6

months to bring a new technology to market. This data indicates that for the majority of retailers, their

current ecommerce platform serves as a barrier itself, as opposed to enabling the quick deployment of

tools that advance a retailer’s path to innovation.

FIGURE 9:

Comparing Resource Barriers between Omni-channel Leaders and Omni-channel Laggards

Top Resource Barriers: Omni-Channel Leaders Top Resource Barriers: Omni-Channel Laggards

1. Limited access to third-party developers (35.8%) 1. Insufficient financial resources (38.9%)

2. Implementing backend technology (32.6%) 2. Lack of education and training of employees (34.1%)

3. Lack of education and training of employees (31.6%) 3. Takes too much time to implement (31.7%)


Another facet of the technology barrier facing retailers is the length of time an organization is tied to their

ecommerce platform. When asked how often their organization evaluates or refreshes its ecommerce

platform, an even split emerged between those who frequently evaluate their platform and those who

do not – 50.3% of retailers say they evaluate their ecommerce technology every 0-3 years while 49.7%

reassess their platform every 3+ years. On the extreme end of the spectrum, almost 20% do not grade their

ecommerce platform for 5-10+ years.

The frequency of evaluating ecommerce platforms is strongly correlated to current levels of omni-channel

integration, as Omni-channel Laggards are three times less likely to evaluate their ecommerce platform

after 5 years than Omni-channel Leaders.

The primary outcome from analyzing technology barriers is as follows: no matter how much internal

support an organization has for driving technological innovation, without the right ecommerce platform, a

retailer can quickly fall behind the technology curve.

ATTITUDINAL BARRIERS

Attitudinal barriers stem from a lack of support within organizations in terms of advocating the exploration

and deployment of retail technologies, and are often a result of a passive or uninspired executive team.

These barriers are typically psychological in nature, serving as a dark cloud to individuals looking to

champion new technologies. At their most extreme, attitudinal barriers make it difficult for innovation

pioneers to even earn a seat at the table to propose their vision.

For many organizations, attitudinal barriers stem from a pure lack of ideas, resulting in little to no

investment for exploring new technologies. When asked what percentage of their organization’s budget

is allocated toward research and innovation, 84.3% of respondents said they allocate less than 25% to this

area, with 56.3% contributing less than 10%.

FIGURE 10:

Ability to Release Technologies with Current Ecommerce Platform

How quickly can you implement new retai l technologies with your current ecommerce plat form?

Less than 30 days–12.8%

1-3 months–15.4%

3-6 months–26.9%

6-9 months–18.9%

9-12 months– 8.0%

12+ months– 17.9%


Attitudinal barriers are self-fulfilling in many ways, as an organization that is indifferent towards advancing

innovation will never invest the time or dollars needed to introduce new technologies, and potentially

may never entertain ideas that will move the retail experience forward. Even more, champions of retail

innovation, namely IT, Development and Marketing teams are required to futilely spend extra time justifying

and explaining their vision to an executive team, which only exacerbates the technology gap by further

delaying the introduction of exciting, futuristic retail experiences.

OVERCOMING BARRIERS TO RETAIL INNOVATION

When reviewing the three categories of roadblocks to retail technology, one might feel overly challenged

as they lead the fight to bring their organization to innovation independence. For those champions of

innovation, consider the following guidelines in overcoming each barrier type:

• Organizational barriers: Overcome these barriers by first tackling attitudinal barriers, as they are the

root cause of being unable to secure financial resources, engage third-party partners, gain access to

new tools, etc. Once attitudinal barriers are reduced and removed, champions of innovation will have

more freedom and flexibility to finance and support the deployment of retail experiences that will

ultimately drive additional revenue.

• Technology barriers: Retailers are advised to conduct an annual technology audit to determine if their

organization’s portfolio of tools meets current and future needs. This review should include a detailed

analysis of their existing ecommerce platform to identify key painpoints and indicate whether or not the

platform provides the ability to capitalize on market and technological opportunities. Upon completing

the audit, known problems should be shared with key decision-makers, along with a short-list of

potential technology vendors/partners, and a migration plan.

• Attitudinal barriers: Identify an individual or group of individuals that see the value of becoming

a technology leader and assign them to champion the effort by researching, outlining, and

communicating the key benefits of innovation to the organization’s executive team. From there, this

team should work to establish an Innovation Lab that is fully separate from the daily operations of the

organization to create unique, forward-thinking ideas that can be communicated and approved for

future investments.

FIGURE 11:

Organizational Investments in Research and Innovation

What percentage of your overal l budget is a l located toward retai l innovation?

0-5%–28.3%

6-10%–28%

11-25%–28%

26-50%–12.2%

51-75%– 2.9%

76-100%– 0.6%


The road to providing what consumers demand today while becoming an innovator tomorrow is full of

twists, turns and potholes for retailers – but as we have seen from the most forward-thinking companies in

recent years, introducing “the next big thing” can do wonders for a brand’s bottom line and market share.

Working to reduce internal barriers, regardless of what they entail, paves the way to cruising down that

road, which is why retailers and champions of innovation should begin their work now.

ConclusionThe future of retail technology is coming, with exciting opportunities already among us. In the immediate

term, consumers and retailers are aligned as to what shopping capabilities and experiences should be

available, but longer term, retailers are encouraged to be at the forefront of delivering innovative retail

experiences that will engage customers at an entirely different level.

By following the three-stage approach outlined in this report, including closing the omni-channel gap,

harnessing the power of mobile, and knocking down barriers to become technology innovators, retailers

have a monumental opportunity to maximize, and to a certain extent determine, where retail technology

takes us this coming year and well into the future.

ABOUT MOZU

Brought to you by Volusion, Inc., Mozu is a commerce platform for the new global marketplace. With Mozu, retailers can manage their

commerce, content and customer experience across every channel, on any platform, around the world. With endless extensibility,

customizations and refreshing usability, Mozu provides truly limitless commerce to an ever-changing business landscape. To learn more, visit

mozu.com.

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liable for any loss of profits or any other commercial damages, including but not limited to special, indirect, consequential, or other damages

relating to the contents of this document or any reliance on the contents of this document.

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sites nor the quality or acceptability of the products or services offered through any such sites. Links provided by us to such websites are

provided solely for your convenience and do not imply endorsement, sponsorship or recommendation by us of these other sites.

© Volusion, Inc., Mozu and/or its affiliates. All trademarks of third parties referred to in this document are the properties of their respective owners.

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The Future of Retail is Coming Are Retailers Ready?0ca36445185fb449d582-f6ffa6baf5dd4144ff990b4132ba0c4d.r41.cf… · Introduction: The Future of Retail is Coming / 4 State of Retail

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