Dive Brief:
- More than half (54%) of North American retailers can’t keep up with the rapid pace of technological changes, according to a Jumpmind survey of 112 retailers conducted by Retail Systems Research.
- While nearly half of respondents said they have difficulty in quantifying the return on their in-store tech enhancements, over a third (37%) expressed uncertainty regarding whether new technology will be useful or distracting to their businesses, the survey found.
- Almost a third (34%) of retailers said they cannot keep up with consumer adoption of new tech tools, and nearly the same proportion said investing in those tools is too expensive, per the survey results.
Dive Insight:
Though there is uncertainty among retailers regarding their in-store investments, retailers are eyeing point-of-sale, order fulfillment and other tech tools to support their operations, according to the survey.
For “retail winners,” those with 7% or more year-over-year sales growth, two-thirds plan to implement mobile devices to serve as point-of-sale terminals, and 63% said they’re rolling out in-store fulfillment tools, the survey found.
“The need for digital enablement in the store is real and urgent,” Steve Rowen, managing partner at RSR, said in a statement. “Consumers want a shopping experience that is more information-rich so that they can help themselves; retailers want to create new efficiencies to counteract the new costs associated with omnichannel selling, and employees just want to keep up with hyper-informed shoppers.”
The report also builds upon previous research indicating that stores continue to be a heavily trafficked channel. It noted that 80% of all retail transactions occur in stores. Meanwhile, a separate report from EY forecast that the share of offline retail will comprise 77% of transactions this year and 73% by 2028.
Along with technological upgrades, retailers have been focused on one tech tool in particular: artificial intelligence. More than half of retailers have increased their spending on generative AI this year compared to last year, according to a Capgemini report.
Larger retailers like Target and Walmart are also doubling down on their AI bets. Walmart is developing its AI agent capabilities, improving its customer-facing AI assistant, Sparky, and streamlining staff workflows. Michael Fiddelke, who will soon transition from COO to CEO at Target, said on a recent earnings call the retail chain has been using AI and other tech tools to “build an updated forecast more accurately while spending less time creating them.”
But as more retailers pour capital into AI tools, some research casts doubt on the return on that investment. Less than a third of retailers think their current AI and data analytics capabilities give them an edge in the marketplace, according to a May report from EY. Over three in five retail leaders expressed concerns about the quality and consistency of AI tools, according to a recent Monday.com survey.