Retail technology

Technologies every retailer should have in its toolkit in 2023

Grocery, drug and convenience retailers have many technological investment opportunities for improving operations, including asset management, smart robots and location-aware networking.
Elizabeth Christenson
Editor, Retail Leader
Elizabeth Christenson profile picture

What it means: Technology aids in efficiencies across essential retail, but brands often overlook the need for all technology advancements to work effectively with each other. Complex systems must effectively integrate in order to change the landscape of a store. All of the steps within a product’s journey from production to consumer checkout, including the supply chain and in-store experience, need to work together seamlessly. This process begins with the technological infrastructure of retailers, which is costly to implement but allows for agility to build as advancements debut.

This year, retailers will need to embrace technology to get ahead of evolving customer demands and operational challenges next year and beyond. New predictions from Aruba, a Hewlett Packard Enterprise company, detail how technology requirements for retailers have become more complex as they continue to battle for consumers. In the final installment of our two-part article series, Retail Leader Pro chatted with Ryan McCarthy, Aruba’s senior solutions marketing manager of global retail, about the greatest opportunities for augmented reality (AR), virtual reality (VR) and artificial intelligence (AI) in the grocery, drug store and convenience channels along with technologies for delivery and operations.

RL Pro: What opportunities exist for drug, grocery and convenience retailers to invest in AR, VR and AI?

Ryan McCarthy, Senior Solutions Marketing Manager, Global Retail Aruba, a Hewlett Packard Enterprise company
Ryan McCarthy, Aruba’s senior solutions marketing manager of global retail

McCarthy: In addition to personalization, grocery, drug and convenience retailers can use today’s AR technologies in multiple ways: to increase private label purchases; offer virtual-try-ons for beauty and personal care products; promote seasonal, sale or specialty products; create child-friendly gamification around products; and bring advertising and national brand promotions to life in-store and online. 

Moving forward, the opportunities include delivering immersive VR experiences that offer everything from product demonstrations to virtual supplier tours, where customers can learn about product sourcing, sustainabilityand other topics.

For AI, the opportunities range from customer-facing options, such as automatically recommending products based on customer data, to using analytics for improving inventory management, order fulfillment and supply chain optimization. AI is also critical for improving networking infrastructure performance and resiliency, which are necessary for supporting high-quality experiences while simultaneously freeing up IT time for business initiatives that enable customer experience innovation.

RL Pro: What are the greatest opportunities this year for essential retailers in regards to delivery?

McCarthy: Rapidly escalating consumer expectations for on-demand, time-shifted and location-flexible delivery options require creating a convenience ecosystem, where consumers can seamlessly shop using the method that suits them best at any given time. To do so, grocery, drug and convenience retailers will take an increasingly hybrid approach to fulfilling orders, offering up traditional delivery solutions alongside improved curbside delivery, dark stores for online-order fulfillment, micro-fulfilment centers, grab-and-go ‘pop-ups’ for in-store collection, and on-demand couriers. The use of enhanced geolocation services and even mobile stores will give retailers the chance to bring the point of sale directly to the consumer’s home or place of work. In addition, the entire ecosystem requires advanced security solutions, both cyber and physical, to comply with data privacy requirements and address loss prevention.

RL Pro: How can grocery, drug and convenience retailers lean into technological investments to promote efficient and strategically targeted operations that will spur growth?

McCarthy: Grocery, drug and convenience retailers have many technological investment opportunities for improving operations. These include:

  • Asset tagging and tracking to speed distribution and improve inventory management. Asset tagging and tracking enables grocery, drug and convenience retailers to use advanced automation technologies and predictive analytics to support the logistical operations required for personalization and profitability.
  • Smart robots in warehouses and distribution centers to speed fulfillment, while also reducing waste and excess inventory.
  • Location-aware networking technologies in warehouses and distribution centers to provide exceedingly granular inventory tracking, for better resource allocation and reduced waste as well as to help make facilities sensor-driven. Location awareness is an enabling technology to ensure other applications, like loyalty programs, AI-powered predictive analytics, IoT-enabled smart robots and seamless connectivity for user and IoT devices, can meet customer demands in real time.
  • Scalable, cost-effective wired and wireless networks delivered via network-as-a-service (NaaS). The IT demand of real-time, AI-powered and immersive technologies can put a strain on many traditional or legacy networks, resulting in slow or unresponsive applications that impact operational efficiency as well as customer engagement. As retailers roll out personalization, experience and other customer-facing innovations, the network will need to be scalable too. NaaS is attractive for scaling, rather than delaying, for long evaluation and approval cycles. NaaS also delivers attractive financial benefits. By moving networking infrastructure from a capital purchase to an operating expense, retailers release funds for investing in other critical business initiatives.
  • Built-in networking infrastructure security engineered into every aspect of a retailer’s wired, wireless and software- defined wide-area network (SD-WAN) infrastructure to ensure seamlessly applying appropriate security levels to myriad devices and rapidly responding to suspicious situations. Top solutions use Zero Trust and secure access service edge (SASE) frameworks, providing stronger threat defense across the entire IT stack. Further, to assure high-quality user experiences, it’s critical to consolidate onto a single, centralized network and security management platform for reducing network complexity, maximizing visibility, and automating edge-to-cloud quality of service (QoS).
  • Artificial intelligence for IT operations (AIOps) to support the data, compute and bandwidth-intensive needs of retail applications. Utilizing AIOps provides AI-powered insights for network troubleshooting and optimization, workflow automation with self-healing capabilities and advanced endpoint profiling for enhanced security across the wired, wireless and SD-WAN networking infrastructure. In other words, AIOps improves network performance and resilience in support of high-quality experiences, makes retail IT teams more efficient and effective so they can concentrate on higher value initiatives and reduces costs by enabling more junior IT staff to complete routine networking tasks.

RL Pro: What trends are you currently seeing gain momentum in the retail tech landscape for in-store?

McCarthy: In today’s age of instant gratification, consumers expect retailers to deliver what they want, when they want it — without deviating from what was promised – and to do so from the moment customers enter a store or login online. The technologies discussed above are all part of a coming surge in automation and predictive technologies that will support the logistical operations for retail brands, helping them more accurately track inventory and meet consumer demands in real time.

The integration of warehouses, stores and digital platforms will need to be supported by an extremely granular real-time awareness of inventory and the ability to anticipate demand for improving resource allocation, reducing waste and minimizing costs. This will require silo-free network connectivity to power AI and other technologies for immediate data delivery and automated predictions, ensuring orders are fulfilled as promised and no demand is left unanswered.

RL Pro: What digital technologies/innovations do you think every retailer should have in their toolkit in 2023?

McCarthy: Each of the technologies and innovations discussed are important for retailers to have in their toolkits in 2023 and beyond. In addition, a critical — but frequently overlooked — consideration for technology investments is adopting solutions with the capability to integrate seamlessly and cost-effectively with adjacent technologies, such as networking infrastructure integrating with electronic shelf-labeling solutions or advanced wireless handheld scanners that empower staff to complete a customer’s in-store purchase on the fly. This type of integration requires evaluating the strength of a vendor’s partner ecosystems as retailers consider solutions, particularly networking infrastructure, to gain the desired flexibility, agility and scalability.

What’s next: Inventory management and transparency is going to be a key technological solution for retailers and consumers in the next few years. Just like consumers already expect retailers to tell them the status of their online order with detail and accuracy, they will soon expect the same of products coming to market and understanding retailer stock levels at any given time. In order for this to come to fruition within retail, seamless integration across the supply chain is necessary.