The retail industry has shifted in the last 20 years; moreover, there have been significant innovations and technological advancements in the last few years alone, such as tap-and-go payments and online banking.
In the convenience and impulse industry, convenience stores can often lack support from big brands and the funds to support the technological growth in the market.
An example of this was shown in the results of a recent report on Australia’s bread market, as reported by C&I Week.
AACS CEO Jeff Rogut said that a number of suppliers don’t support smaller convenience businesses due to insufficient demand; meaning smaller stores aren’t always able to provide the same level of quality and freshness to their customers.
Speaking at the Inside Retail Live event Anders Sorman-Nilsson said that humans, living in a digitised economy, are craving seamless transformation.
A self-proclaimed futurist, Sorman-Nilsson said that “the retail lifestyle has shifted…in an age of retail commerce.”
“Stores cannot exist as mere distribution centres. They are a media platform that tells a story,” he said.
As the future of retail is becoming a technological reality for Australians, a 2015 report by the Committee for Economic Development of Australia (CEDA) said that emerging technologies are threatening to reshape the economy in very different ways to those of the past.
“While increasing computational power and rapidly falling prices are encouraging greater use of computers, the capacity of machines to replicate aspects of human thought is set to most radically reshape the labour market,” the report said.
“These advances mean that activities previously considered forever outside the scope of programming are increasingly being undertaken by computers.
“For instance, driving through traffic was thought to be a task for which humans would always have an absolute advantage over computers; now Google has patented a driverless car and Rio Tinto has automated its entire Pilbara region operations.”
A 2015 US study by online business-for-sale marketplace BizBuySell.com, reported that “38% of convenience-store owners and 31% of gas-station owners… believe that ‘disruptive technology’ companies represent a threat to the value of small businesses.”
“The findings revealed that while most small-business owners believe there is still great value in what they provide, new competition–specifically disruptive technology platforms like Uber, Airbnb and even Amazon–is affecting small-business values.
“Nearly 40% of small-business owners surveyed believe these new technologies are affecting the value of their business. New web-based software and mobile app offerings are able to aggregate supply of a product or service and bring it directly to the consumer,” it said.
In an attempt to keep up with the ever-changing customer journey that technology is enforcing, small to medium enterprises (SME) are encouraged to embrace these innovations.
The question is then, are businesses in the convenience sector going to be able to keep up?
According to the 2016 results of The Voice of Australian Business survey, a national survey of SMEs across all industries and regions, only 13% of SMEs proactively implement new technology as it is made available. It noted that 20% of SMEs don’t even take much interest in new technology.
It was also reported that “SMEs will generally apply technology once they feel it is needed, rather than proactively implement.”
C&I Week previously reported that many people have easily adapted and incorporated technology into their everyday lives. However, Australia’s SME sector is still testing the waters when it comes to digital technologies.
‘Digital disruption’, as it has become known, is seen as either a threat or an opportunity, depending on how it is being implemented.
Managing partner of Bentleys SA Michael Ruggiero said that the split between those who see it as a threat, as opposed to an opportunity, could point to a lack of understanding around how to embrace these technologies in a practical way, which is causing a reluctance to engage.
“The ones who are seeing it as a threat are worried it will disrupt their traditional way of approaching their business – essentially upsetting the applecart,” he said.
“However, when integrated properly digital technologies should create efficiencies that not only improve the bottom line but free up time for business owners to spend on more important activities such as deepening customer relationships and gathering data that creates more meaningful client interactions or better products and services.”
The threat of big business saturating the market is ever-present: online retail giant Amazon was set to roll out its own convenience stores labeled Amazon Go, before announcing a temporary halt this past week.
However, the brand is still set to greatly expand its online offering in Australia over the next year.
The move has been predicted that Amazon will “decimate its retail competition when it launches in Australia,” as reported by the Herald Sun late 2016.
Anders Sorman-Nilsson said it is important to totally redesign the customer journey for the future.
“Humans are refusing to change…biology and technology are starting to merge,” he said.
In a blog post written after speaking at the HR Tech Fest in 2016 he also said: “Organisations around the world are facing a paradigm shift – moving away from the world of the physical, of the tangible, into a digital future of doing work where the user interface of work is massively being disrupted. Change is happening whether we like it or not. So how do we seamlessly weave the old and the new together while making sure that all of our #leavenobabyboomersbehind go on this journey into an increasingly digitised future?”