Reinventing

Retail
Remaining human-centric through the use of technology to
gain a competitive edge in a competitive industry
Introduction
Technology is not new to the retail industry, Retail technology continues to evolve, and
yet no trend has revolutionized—and at times as it does, so too are consumer expectations.
polarized—the retail experience like the internet. Here, we explore some recent trends in
As e-commerce has expanded, it has altered the retail industry and show how a robust
the retail ecosystem from consumer behavior digital strategy presents opportunities for
and human resources to warehousing and last- retailers to use technology to build a healthy,
mile delivery. collaborative ecosystem.

There’s an old saying that “chance favors the

prepared,” and no recent event made that more
relevant than the COVID-19 pandemic. Retail
executives who embraced deploying technology
to manage the end-to-end ecosystem were
better able to withstand the bleakest weeks of
the pandemic.

Even those retailers who were late adopters—

adding and updating technology as a matter of
survival—are now better positioned to:

1 Understand their customers and anticipate

shifts in consumer behavior

2 Manage their businesses more efficiently

by adopting best practices for deploying
technology and human labor

3 Collaborate with internal and external

partners to efficiently manage each point
along the supply chain

4 Respond quickly to future crises and

mitigate potential supply chain problems
resulting from issues such as global pandemics
and climate-related emergencies

| 2
New thinking
is revolutionizing an
Old Industry
Although it’s tempting to view technology in So, while the retail technology transformation
retail as a newer trend, it’s been part of the was underway well before 20201, the COVID-19
industry for nearly 60 years. Over the last two pandemic made investing in technology more
decades, we’ve seen how tech-driven trends urgent and accelerated the process throughout
such as artificial intelligence and e-commerce the retail ecosystem. Even “senior consumers,”
completely flipped the script on the retail who had remained skeptical about using
industry. e-commerce platforms, were forced to put their
faith (as well as their credit card information) in
Some retail executives maintained that e-commerce technology.
they could compete against a digital-native
e-commerce giant like Amazon by emphasizing Looking ahead with this modern mindset,
the human side of the value proposition. But more retail executives are planning or have
consumers have increasingly demonstrated implemented significant increases in technology
their preference for the convenience of investment, particularly in software such
shopping online. And for those who find it as artificial intelligence, inventory and order
inconvenient or impossible to access a physical management, and CRM systems. They are also
store, e-commerce offers them a way to green-lighting back-end infrastructure spending
shop independently and have their purchases to upgrade legacy hardware and software
delivered to their door. systems to handle modern technology.

1
, vi “3 Ways Retail Executives Are Preparing for the Future of In-Store Tech,” Toshiba Retail Dive, 3 Ways Retail Executives Are Preparing for the
Future of In-Store Tech | Retail Dive (industrydive.com)

| 3
How technology supports,
not supplants, human labor
Some resistance to technology stems from the at all levels in these organizations to make fast,
notion that computers and robots are poised to well-informed decisions that help the retailer
replace human beings in retail stores. However, attract and retain customers.
as more executives and consumers see it in
action—and even interact with it—they realize But even in areas where there is plenty of
how technology supports human labor rather emerging technology to handle routine customer
than replaces it. service issues, there is still a demand for a
human touch. Many people are becoming more
Leveraging technology such as artificial comfortable talking to a chatbot about product
intelligence to handle data-driven decisions such questions, pricing, or checking orders. However,
as inventory, distribution, and SKU assortments many consumers—particularly “digital seniors”—
allow retailers to effectively manage the still prefer speaking with a human being, even
supply chain and distribution logistics, better through a digital experience like an online chat
understand brand cycles, and anticipate shifts or text messaging.
in consumer tastes. This data empowers people

| 4
So, rather than replacing people in the retail
workforce, executives now see how AI and
automation help level the playing field through
better supply chain, inventory, workforce, and
customer management. It also fosters better
communication and collaboration throughout
the retail ecosystem and allows machines and
humans to perform the tasks for which they are
best suited.

According to Gartner2, “The critical need to

optimize costs, due to labor shortages and
minimum wage increases, is driving continued
retailer interest and investment in smart robots
throughout 2021.”

There has been an increase in the deployment

of robots to handle tasks such as floor cleaning,
stocking shelves, and package delivery. These
are areas where robot technology is more
cost-efficient than humans performing these
tasks. For example, a robot can scan and count
as many as thousands of SKUs in two to three
hours, helping prevent out-of-stocks by alerting
store associates to potential outages on the
shelves.

Intelligently allocating human and digital assets

helps retail organizations stay competitive
by connecting more meaningfully with their
customers and discovering new revenue
streams to tap.

, Gartner®, “AMR Market Guide for Smart Robots in Retail” June 24, 2021. [Link: https://go.greyorange.com/gartner-market-guide-2021]
2

Disclaimer: GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein
with permission. All rights reserved.

| 5
The evolution
of the Physical Store
Another challenge of breaking through the old
tech-resistant mindset is understanding how the
role of the storefront is evolving.

Retail culture once viewed e-commerce and

brick-and-mortar as separate entities under
one brand umbrella. But shoppers view them
as the same store, which led to confusion
and frustration when they found the item they
wanted on the website but couldn’t get it at
their local store or encountered discrepancies
in pricing.

As executives shifted their culture to view their

online and physical locations as a single entity,
they began delivering a more transparent and
coordinated shopping experience, which, in turn,
restored customer satisfaction.

Today, a store’s physical location is more than a

shopping destination. Accelerated by the COVID
pandemic, local stores now function as Buy
Online, Pick Up In-Store (BOPIS) and Buy Online,
Return In-Store (BORIS) locations, as well as
fulfillment and shipping channels.

Stores that had already built a robust

e-commerce platform quickly pivoted to online
and mobile shopping in the pandemic. They
redeployed associates to order fulfillment and
store sanitizing when brick-and-mortar locations
had to scale back business hours or close their
doors entirely for in-person shopping.

| 6
Giving shoppers a safe and convenient way to for the sensory exploration of a product before
buy online and have their orders delivered to purchasing. While some retailers, such as
their home or waiting for them curbside provided Sephora4 and Ulta Beauty5, let customers try out
retailers a lifeline and offered added value for cosmetics through augmented and virtual reality,
their customers. And even though stores have many retail businesses prioritize investment in
welcomed shoppers back to their physical other technologies6.
locations, home delivery and curbside pickup
remain popular with customers, prompting many
stores to continue offering one or both of these
options.

“State of Retail” National Retail Federation NRF | State of Retail

Although e-commerce continues to grow
3

year over year, there is no indication that it is 4

“Sephora Boosts Augmented Reality Shopping with Real-Time Facial
Recognition” Brielle Jaekel, Retail Dive Sephora boosts augmented reality
poised to replace the physical store any time shopping with real-time facial recognition | Retail Dive

in the foreseeable future. The National Retail 5-6

“Beauty’s New Frontier: How Technology is Transforming the Industry,
Federation reports that 80% of all shopping from Virtual Reality to Livestreaming” Kristin Larson, Forbes Beauty’s New
Frontier: How Technology Is Transforming The Industry, From Virtual Reality
still happens in stores3. There is no substitute To Livestreaming (forbes.com)

| 7
Reinventing the
In-Store Experience
There’s no question that the experience of Digital payment options using Near Field
visiting a store has changed substantially over Communication (NFC) technology enable
the past several years. Some of the changes shoppers to pay for their items by tapping their
have been subtle, such as the role of store smartphone on a pad, eliminating the need for
associates. Other changes, such as checkout, carrying cash or credit cards.
are more profound. All of these are geared
toward reducing the amount of “negative” time Still, other retail stores seek to eliminate the
customers spend in stores, whether they’re cash register. Amazon is pioneering another
trying to find a specific product or paying for new technology, dubbed Just Walk Out. Using
their purchases. this technology, the customer enters the store
with their credit card. Just Walk Out7 tracks
Retailers and brands are adopting mobile app- the products the customer adds to their virtual
based geofencing, beacon, and QR technology to cart (as well as those they return to the shelf).
offer customers targeted deals, help them locate Once the customer is finished shopping, they
items in the store, or allow them to scan a code are automatically charged as they walk out of
to learn more about a product. These modern the store. Amazon has tested and perfected this
features help shoppers decide on a purchase technology in their Amazon Go stores and is
without flagging down a sales associate for now making it available to other retailers.
assistance. It also provides relief for those
customers who prefer to browse without a By balancing human labor and technology to
salesperson hovering nearby. enhance the customer experience, stores find
new and better ways to connect and engage
Stores are also looking to reduce, and even with visitors to their physical storefronts.
eliminate, the worst bottleneck in the shopping
experience: checkout.

Self-checkout lanes are expanding among larger

retail chains. At the same time, other stores,
including Apple, have implemented portable
checkout technology that allows associates to
use mobile devices and card readers anywhere
in the store.

7
“Elevate Your Retail Experience with Just Walk Out Technology by Amazon” Amazon Just Walk Out

| 8
The metaverse:
Which brands are leading the
charge into this new frontier?
The metaverse is a shared 3D experience or fashion world with their “Generation AZ”
an embodied, virtual version of the internet collection9. This genderless collection is
where we will constantly be within it rather available in selected physical stores in Europe,
than have access to it. In the metaverse, Asia, the United States, and virtually on the
people interact much as they do in the Zepeto social media platform.
physical world—hanging out, working out, and
shopping—but through avatars. Nike’s virtual world is modeled on its
headquarters and includes spaces where
Retailers jumped on the shopping aspect players compete in various games. There is
of the metaverse, with fashion brands also a showroom where users can outfit their
immediately embracing the concept. Roblox characters in the latest Nike gear and
old favorites, including Air Max 2021 and Air
Balenciaga announced the launch of its Force 1.
metaverse business unit, building off the
successful release of its Fall 2021 collection
via the Fortnite gaming platform, where users
8
“Balenciaga to Launch Metaverse Business Unit” Robert Williams,
dressed their avatars in Balenciaga couture8. Business of Fashion Balenciaga to Launch Metaverse Business Unit | BoF
(businessoffashion.com)

Zara, in collaboration with Ader Error, a South 9

“Zara Lands in the Metaverse with South Korean Label Ader Error” Georgia
Wright, Retail Gazette Zara lands in the metaverse with South Korean label
Korean fashion brand, entered the digital Ader Error - Retail Gazette

| 9
Leaked patents suggest that Nike has laid
the groundwork for expanding its brand in
the metaverse. Trademarks and patents
range from downloadable digital items to
“cryptokicks,”10 so expect to see a lot more
from the athletic giant and other virtual
trendsetters as the metaverse grows.

Finally, Walmart has indicated it is leaning

heavily into the metaverse. In late 2021,
the mega-retailer filed several trademark
applications with the U.S. government
covering everything from non-fungible
tokens (NFT) and cryptocurrency to virtual
merchandise covering nearly every store
department.

10
“Nike Leaked Patents Reveal Metaverse Plans” George Iddenden, Charged
Retail Tech News Nike leaked patents reveal metaverse plans - Latest Retail
Technology News From Across The Globe - Charged (chargedretail.co.uk)

| 10
The data trade-off:
Making it a win-win for
retailers and customers
Today, most consumers are savvy enough to
understand that data about their shopping
behavior is being collected and analyzed. In
return, they expect a convenient, personalized
buying journey whether they’re shopping on a
website, via their mobile device, or inside a store.

Retail executives had already started investing

more in Customer Relationship Management
(CRM) software to help them connect with
their customers. CRM software allows stores
to use their marketing budget more efficiently
through targeted promotions and offers
relevant to the customer. Through machine
learning, stores can anticipate when the
customer needs to replace a product and push
an offer at the right time.

Of course, it didn’t help that nearly all the

data collected on consumer behavior before
2020 was rendered almost useless virtually
overnight as the pandemic forced changes
to shopping habits. Consumers still expected
a convenient, personalized experience, but
suddenly their behavior didn’t align with the
information retailers had previously gathered
and analyzed.

| 11
Even with the sudden shift in behavior, the provides can quickly separate the digitally
advantage of using AI to gather and analyze mature players from the rest of the pack. The
data is clear. Those retailers who were world faces a looming climate crisis that can
already leveraging the technology were better affect everything from weather to pandemics
positioned to execute on issues in the supply and geopolitical stability. 11
chain and changes in customer behavior in
real-time. Those who hadn’t fully delegated And that, in turn, affects resources,
data collection, analysis, and decisions to transportation, storage, and labor. Those
these systems were forced to create new data that stay on top of impending supply chain
pools and rebuild customer segments. disruptions and shifts in consumer habits will
be better able to ease consumer panic and
Though it may sometimes seem like face fewer out-of-stock problems during the
technology is rolling out slowly in retail, next crisis.
when a crisis hits, the agility that automation

11
“Clouds on the Horizon: What Climate Means for Retail” Daphne Howland, Cara Salpini, Kaarin Vembar, and Caroline Jansen, Retail Dive Clouds on the
horizon: What climate change means for retail | Retail Dive

| 12
Shoppers have spoken
(Or, rather, they’ve tapped
and swiped)
Mobile commerce is poised to continue its
massive growth. A study from Synchrony
revealed that 67% of consumers had
downloaded at least one retail app to their
smartphone12, and another study shows that at
least 77% of shoppers use their mobile device
while they’re shopping in-store to research
products and compare pricing13.

And though recent events have skewed

consumer behavior, a Google report states
that shoppers are more likely to visit a brick-
and-mortar location versus an e-commerce
site if the retailer offers helpful information in
the search results14.

Whether consumers opt to make their purchase

in-app, on the website, or in-store, investing in
website and mobile optimization—particularly
for visual and voice search—gives retailers the
edge when competing for valuable real estate
space on the search results page. According to
Gartner, “By 2021, early adopter brands that
redesign their websites to support visual and
voice search will increase digital commerce
revenue by 30%.” 15

12
“Synchrony Study: Consumer Adoption of Retailer Mobile Apps Doubles” 15
“Gartner®, “Gartner Top Strategic Predictions For 2018 And Beyond”
pub 23 August 2018, Synchrony Bank Clouds on the horizon: What climate November 05, 2019. [Link:https://www.gartner.com/smarterwithgartner/
change means for retail | Retail Dive gartner-top-strategic-predictions-for-2018-and-beyond]

13
“Study: Shoppers more willing to consult mobile phones than associates Disclaimer: GARTNER is a registered trademark and service mark of Gartner,
while in stores” Dan O’Shea, Retail Dive Study: Shoppers more willing to Inc. and/or its affiliates in the U.S. and internationally and is used herein with
consult mobile phones than associates while in stores | Retail Dive permission. All rights reserved.

14
“New Research Shows How Digital Connects Shoppers to Local Stores”
pub October 2014, Think With Google Research shows how digital connects
shoppers to stores - Think with Google

| 13
No shopping list?
No problem! How the
internet of things keeps
pantries stocked
Internet of Things (IoT) is possibly one of the Based on a consumer’s in-depth customer profile
most cost-effective and least-understood retail and machine learning, a delivery truck could
technologies. Its use spans well beyond doorbell arrive at a customer’s door every week, carrying
cameras and smart light switches. The use case items the data analysis predicts the customer
for IoT stretches throughout the entire retail needs. Unneeded items are returned hassle-free,
ecosystem, from supply chain and inventory to a with that information added to the customer’s
customer’s refrigerator and pantry. profile for further learning.

It can be used like beacon technology to foster One of the drawbacks to IoT is its vulnerability to
customer interaction in stores. And at home, attack and exploitation since it connects to the
a consumer can reorder an item with the push internet on such a massive scale. And with retail
of a button (think Amazon’s Dash buttons). A executives focusing their attention and budget
recent article in VentureBeat touts “predictive on other areas, including AI, CRM, and creating
transactions” as the next seismic shift in retail. 16
a consistent and convenient omnichannel
experience, IoT is a lower priority until it can
A customer wouldn’t even need to push a button prove a solid ROI.
to summon a delivery with this technology.

16
“Predictive Transactions are the Next Big Tech Revolution” Alfred Chuang, VentureBeat Predictive transactions are the next big tech revolution
| VentureBeat

| 14
Is it time to retire
legacy hardware?
Two questions
to ask
As the pandemic began shutting the world down,
stores quickly needed solutions to manage
inventory, order fulfillment, and customer
relationships. Many retailers hastily patched in
off-the-shelf software that strained old legacy
systems.

And now, when executive teams are increasing

their investment in digital systems to manage
the end-to-end retail ecosystem, they realize
that it’s also important to scrutinize legacy IT
systems.

Two questions to consider when deciding

whether to update or retire legacy systems are:

What hardware upgrades are needed to

accommodate new software?

Will new software packages integrate

with legacy systems?

Understanding the limitations of current

hardware and software installations helps
CIOs make well-informed business cases for
upgrading legacy systems or replacing them if
they’ve reached maximum capacity.

| 15
CONCLUSION:
Gain the edge with a smart,
human-centered approach
to technology
No question implementing retail technology and Technology’s role in a healthy end-to-end retail
following current best practices gives retailers ecosystem cannot be understated. Current
an edge in attracting customers and employees. trends in retail automation present opportunities
for growth and collaboration among all players
With retail technology rapidly changing and along the value chain, from manufacturers to
expanding capabilities, it’s time to embrace it as retail associates. To be competitive, retailers
a way to enhance, not replace, human labor in need to commit to digital solutions and invest
the industry. By assigning data-driven tasks and in IT systems that integrate modern technology
decision-making to AI and deploying robot and with as little friction as possible.
chatbot technology for routine and menial tasks,
organizations allow store employees to focus Adopting technology that focuses on the human
on crucial customer-facing work that builds side of retail allows organizations to attract and
customer loyalty. engage employees, build a loyal customer base,
and respond quickly and intelligently to changes
The business case for investment in technology in the ecosystem.
(and employee training) has never been more
apparent. The COVID-19 pandemic exposed the
need for automation that allows retailers to keep
serving customers after disaster strikes.

| 16
About Globant
We are a digitally native company that helps organizations reinvent themselves to
create a way forward and unleash their potential. We are the place where innovation,
design and engineering meet scale.

• We have more than 24,500 employees and we are present in 18 countries working for companies
like Google, Rockwell Automation, Electronic Arts and Santander, among others.

• We were named a Worldwide Leader in CX Improvement Services by IDC MarketScape report.

• We were also featured as a business case study at Harvard, MIT, and Stanford.

• We are a member of The Green Software Foundation (GSF) and the Cybersecurity Tech Accord

For more information, visit www.globant.com

Disclaimer
This report is intended for informational purposes only, based on information available in public domain. While the
information provided has been obtained from sources believed to be reliable, neither Globant nor any of its affilia-
tes, directors, neither officers nor agents attests to its accuracy or completeness.

No representation or warranty, expressed or implied, is made regarding the completeness, accuracy, timeliness
or suitability of any and all information and data contained within any part of the report. Globant shall in no case
be liable for any direct, indirect, incidental, special, consequential or exemplary damage or loss (including, without
limitation, loss of profit), which may arise or derive directly or indirectly from use of or reliance on the information
contained in this report. All information contained in this report is subject to change by Globant without notice.
Prior written approval of Globant is necessary to reprint or reproduce in whole or in part this report. All contents,
text, images, data, information and other materials displayed, including any Globant trademarks or copyrights, are
the property of Globant or the designated owner and are protected by applicable laws.

| 17