The COVID-19 pandemic has turned many industries on their heads, forcing businesses to quickly recalibrate and pivot their operations.

As such, for many industries, predicting the future during a pandemic would be difficult – if not impossible.

However, retail is different.

That’s because COVID-19 has acted as an accelerant for digital transformation – fueling and amplifying trends that have been creeping in for years. You could even call this “COVID acceleration.” McKinsey recently determined that, over a 10-week period in 2020, digital business penetration had increased by the same amount as in the previous 10 years.

This is further evidenced by Australia Post ‘s Inside Australian Online Shopping update February 2021 which reported that online shopping across the country is off to a strong start in 2021. National online purchases in January 2021 grew 44 percent year-on-year (YOY). Household online participation remained high in January, with over 5.2 million households making an online purchase. This was a 25 percent increase in shoppers from January 2020.

So, considering this supercharged digital trend, this is what we can expect to see for Australia’s retail sector:

  1. Automation everywhere

The COVID-19 crisis took almost every business by surprise, decimating many which were not prepared for a move to online sales. COVID-19 has prompted many operational changes that create efficiency challenges – driving the need for corrective actions.

Taking pole position in corrective actions will be automation – touching everything from inventory management to delivery. Australian supermarket giant Woolworths announced that is spending $780 million dollars with robots. The company plans to build one semi-automated and one fully automated distribution centre in south-west Sydney. About 650 jobs will be created at the new centres, to open in 2024.

In addition, Woolworths also rolled out its first micro-automation technology in October 2020 in the e-commerce facility located at the back of its existing Melbourne-based Carrum Downs supermarket, in a bid to speed up the delivery of online grocery orders.

McKinsey believes that over 50 percent of all activities in retail can be automated with current technology. AI will be used to improve and automate merchandising decisions. Business and supply chain execution will see control towers being deployed to monitor the business holistically blazing a trail toward the autonomous supply chain.

The key to automation is the seamless connection of data; as the drive to transform accelerates the ability to connect without constraints, it is even more important. Now is the time.

  1. After omni-channel

As a consumer, every time you are exposed to an improved experience your expectations are reset – to a new and even higher level. The phrase omni-channel is tired and yet few retailers have delivered on its promises.

This describes “harmonised retail” where at every stage of the consumer journey – select, transact, acquire and use – the experience is consistent and completely fluid. Customers get what they want, where and when and how they want it.

This has significant implications in terms of data, coordination and operations. Given that a simple BOPIS (buy-online-pick-up-in-store) transaction can involve 20+ systems, this is not easy. Add in the complexity of differing technology standards and vendors and you can see the pains felt by the IT team. Seamless, agile and rapid connectivity, agnostic to system or channel, and unconstrained by different vendors, is a superb painkiller.

But not everything a retailer sells will be their own merchandise.  Retail ecosystems will expand and grow such that retailers will sell their products through other channels but also sell products and services from other organisations.  These third party products and services will complement and enhance products they sell and offer the opportunity to differentiate.  An example might be an electronics retailer selling a third party installation service for a new TV or a grocer offering a bespoke celebration cake from a local producer as an additional item on their ecommerce site.

Critical to all of this is the elimination of data silos inside the organisation, but for ecosystems to drive real benefit, transparent, rapid and agile connectivity externally will become more critical.

  1. Stores will be reborn

Stores will reinvent themselves with safety and customer experience in mind.

Across all types of retail, physical stores will become digital operational hubs for delivery and order pick-up while also becoming experience centres. A digital operational hub is essential to meeting customers’ same-day delivery expectations without investment in additional distribution centres.

COVID safe plans for customers and store associates needs to be maximised through in-store solutions like smart social distancing, robotic sales assistants and augmented reality for trying on clothing without touching it. Customers will be able to visit stores remotely. Early adopters of this approach including Ferragamo whereby customers at home can enter a virtual store or get live product demonstrations and advice from associates in-store.

Technology in-store will aid staff by eliminating more mundane activities such as monitoring planogram compliance and evaluating shelf-stocks.  But it will help in other ways too.  The typical large grocery store contains multiple different technologies all collecting data – each with a discrete piece of the puzzle that draws a picture of overall store operations.  POS devices, hand held scanners, heating and ventilation devices, door sensors, security cameras and many more – all of these collect data on what is happening in store.

Imagine connecting these together to provide a holistic view of the store.  This could provide a real-time view of operations within the store that could be utilised by both store management and merchandising teams to allow fine-tuning of promotional pricing or supply chain product allocations.  Collect the data over time and you have the ingredients to make further improvements to the optimal execution of in-store processes as well as generating create predictive models to automatically respond to changes much more rapidly.

As a retailer, you cannot wait to evolve because your customers will not wait. Look beyond the past, where evolution was constrained by connectivity and into the future where data flows seamlessly. Just imagine what you can do with seamless orchestration and connectivity across and outside of your business.

The ability to connect and orchestrate like this is critical to the future of retail allowing you to out-innovate your competition without fear. The future of Australian retail has never been more exciting with new advancements set to change the face of the industry.

Oliver Guy is senior director for industry solutions at Software AG