As the 2018 holiday shopping season approaches, the retail sector will once again take center stage. Brick-and-mortar retailers haven’t had it easy in the past decade, as more and more consumers shift their shopping habits as a result of ecommerce. However, despite some predictions that brick and mortars are doomed to become mere memories of the days of old, many retailers continue to turn a profit in an ecommerce-dominated market. What’s the secret to their success? Many successful brick-and-mortar retailers aren’t just brick and mortars; they aggressively pursue omnichannel strategies that blend ecommerce with traditional commerce in a way that puts customers’ needs first.

The IoT (Internet of Things) is playing a key role in keeping retailers up to speed with consumers’ wants and needs. The retail sector has had to evolve quickly to offer smart retail solutions that address common pain points, like how to bring customers into physical stores, how to engage customers in stores and encourage loyalty by providing a superb customer experience, how to keep product prices competitive with online retailers’ prices, how to forecast product demand and manage inventory and stock levels, and how to achieve accurate and efficient fulfillment and delivery for online orders. However, a vast majority of retailers have yet to invest in the technologies that will help them survive and thrive in a connected world.

New research from Blue Yonder, a JDA company, in association with Microsoft, suggests 96% of retailers still rely on manual processes for their pricing and replenishment strategies. This is problematic because manual processes fail to position brick-and-mortar retailers to compete with the dynamic pricing models of online retailers. Blue Yonder says online retailers can react quickly to trends in customer demand by making small adjustments that keep their prices optimized and maximize sales. By contrast, brick-and-mortar retailers using static pricing strategies and manual processes can’t react quickly to these trends and, therefore, are slower to optimize prices and can miss out on sales. Manual replenishment processes can similarly leave retailers wanting. If retailers don’t have the right inventory available at the right times, they can miss out on sales.

By contrast, automation technologies and AI (artificial intelligence) can provide data from which retailers can derive critical insights for replenishment and pricing decisions. AI offers the ability to analyze mass amounts of data in order to automate processes that were previously manual. As a result, retailers can gain efficiencies and repurpose talent to other areas of their operations.

Many retailers are aware of their shortcomings and the benefits automation and other IoT technologies can bring. In Blue Yonder’s survey, for instance, 53% of respondents recognized room for improvement in their replenishment processes, and 54% said the same for their pricing strategies. Similarly, 58% of retailers said automated replenishment would generate a better customer experience, and 56% said automated pricing would lead to improved profits.

The next step for retailers that recognize areas the IoT could improve is to develop a plan of attack for adopting and implementing technologies that will help them be more competitive. Some retailers need a top-down mindset shift in the way the company thinks about data and the opportunities it affords. Data can help optimize pricing and supply chains, it can revolutionize customer service and help drive customer loyalty, and it can help employees do their jobs better—all keys to success in this era of disruption and change.

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