Software AG global industry director, Oliver Guy says that in 2020, retailers will look to embrace new partners and channels, the Internet of Things (IoT) and other critical technologies, amid major digital disruption.

Open relationships

“Winning retailers will build ecosystems by accelerating the use of ‘value-adding partners’, or those who can supplement their product with a unique service and adding new channels through which to sell their products. Referencing Gartner, these ecosystems create “connections between partners, employees and even competitors… built into vibrant networks that can unlock value for all.”

Support networks

“Retailers will use IoT to innovate and differentiate but also realise that their IoT projects need to be connected. By connecting together IoT initiatives they will benefit from the ‘network effect’ that transforms individual silos, projects and initiatives into systems of abundant and rich information. This can then support and automate decision-making and provide a relevant and timely response. Applying the likes of IoT technology to a store environment can double store profitability, McKinsey has found.”

Sitting at the top table

“Technology will sit at the top table organisation-wise this year, after the importance of IT in enabling new digital business models being underestimated for several years. Technology leadership will start to bring innovation to the rest of the business, as visionary CIOs contribute new ideas. Retailers will need a flexible IT architecture and approach to support this.”


“Environmental responsibility will become a differentiator for retailers. An increased focus on the environment informs consumer choices and retailers will respond accordingly. Amazon has ordered an electric fleet of vehicles in response to concerns over its supply chain’s carbon footprint. Other retailers have discontinued plastic cotton wool buds and plastic straws.

“Smart retailers will see technology as a tool to help. This could be IoT and real-time AI response to supply chain issues, improving data visibility that drives decisions or using process mining to understand and eliminate delays that have an adverse environmental impact.”

Blurred lines

“The blurring of industry lines will continue as consumer goods companies seek to avoid using the traditional retailer. The “direct to consumer” business model focuses on delighting customers without any intermediary involved. For example, Dollar Shave Club (since acquired by Unilever) offering razors direct to the customer for as little as $1 per month. Even Lego is considering offering a rental service for its toy bricks.”