Innovation can’t flourish without a strong network. Simple as that.
Ambition and drive are certainly instrumental when looking to innovate within the retail sector, but without the strong foundations that a reliable network can provide, there’s only so far that a retailer can go. With both physical and digital stores expanding the amount of technology utilised, connectivity must be elevated to the next level, or else all that effort towards innovation falls flat. As the High Street becomes more competitive, no ground can be lost.
A network that always operates at peak performance is vital for innovative High Street businesses striving for success, and failing to adapt to expanded technological needs can prove fatal. From a degraded customer experience (CX) to an increased risk of cyber security breaches, the network must be robust and ready to support any ambition. With a strong network, those foundations to innovate remain stable and unlock the true potential behind digital transformation. Without it, there’s a real risk on missing out.
Curtailed customer experience
Turns out that 74% of consumers are likely to base their purchasing decisions on experience alone. The retail environment itself now contains multiple digital and in-person touchpoints, each one proving pivotal in how businesses interact with customers. Providing that crucial best-in-class customer experience now revolves around a seamless, omnichannel experience that involves both the online and offline store fronts.
This ‘phygital’ approach has seen, for example, the option to ‘buy online, pickup in-store’ (BOPIS) increase in popularity, with that market alone projected to reach $666 billion in value by 2028.
It’s all about meeting customers at their level, providing the experience they expect. However, if the network can’t support this more encompassing CX strategy, then CX itself will begin to suffer.
After just one poor experience with a company, more than a third of customers reduce, or even stop, spending their money with them. A bad experience can arise from numerous avenues, such as a slow first response time to any queries or even coming face to face with a less than hospitable member of staff. In terms of network connectivity and a poor experience, that involves customers being unable to make any sort of purchase in person or online.
If a point of sale (POS) terminal is offline, then customers will purchase from another retailer that has a functioning network.
This is just one scenario that can arise when the network cannot perform consistently, which only leads to a loss in customer retention rates and a damage to brand reputation. That brings its own cause for concern, especially when providing enhanced CX rests on a greater reliance on technology.
The Internet of Things (IoT) is the big talking point when the topic of innovative technology in retail is brought up, with radio frequency identification (RFID) tags and sensors, for example, being instrumental to smart shelving. A better understanding of product demand ensures inventory is managed more effectively, and staff can restock shelves when popular items are nearly gone. Customers can get the items they need and won’t leave disappointed if these items are out of stock – it all leads to a better customer experience.
For 73% of customers, experience alone dictates their spending habits among High Street brands, sitting behind product quality and prices. If High Street brands are being held back by their network when looking to improve CX with cutting-edge technology, then customers will look to new horizons in finding the experience they’re looking for. The inability to transition to a digitally led retail environment can also have severe consequences on revenue itself.
Reduced revenue
When the network goes down, estimated costs for organisations ranges from $1 million to $5 million, showing just how damaging downtime can be. The impact on the bottom line is certainly alarming for any High Street business, and action must be taken to alleviate the situation caused by an unreliable network. That same network is the cause of, and direct consequence of, this reduced revenue.
First, when customers don’t have the ability to pay for items, whether it’s online or in a store itself, revenue begins to suffer. Not only are immediate profits from these sales lost (72% of retailers highlight lost sales during downtime), but long-term revenue also begins to dry up as customers can lose faith in a brand and their services.
It can cost five-seven times more acquiring new customers compared to retaining existing ones, meaning there’s pressure on High Street brands to do everything they can to establish a network that’s robust and reliable.
That unreliable network can impact revenue when technology that has already been integrated to manage inventory fails. IoT systems can give retail leaders critical insights into the health of their equipment, allowing better decision making thanks to predictive maintenance. Anticipating repairs or impending end of life means maintenance can be carried out before equipment failure, or out of normal operating hours to alleviate disruption.
Predictive maintenance can reduce costs by 12%, while simultaneously extending asset life, boosting uptime, and, above all, keeping produce in good condition.
Once the ability to predict maintenance is gone, inventory is now at risk. Perishable products, such as food, can become spoiled when equipment fails, which accumulates towards lost revenue as the costs put to producing and supplying these items can’t be made up through sales.
Energy overconsumption can also start digging into the bottom line, as these machines will be consuming energy without any purpose i.e. keeping produce fresh. With an understocked inventory, customers will be unable to buy the products they’re looking for, starting the whole cycle of failing to retain customers and losing ground to High Street competitors.
Above all, it’s another clear sign that, with a poorly managed network, innovation cannot thrive.
Inventory mismanagement extends beyond the traditional store, as technology assigned to make supply chain operations more efficient will be useless if the network can’t support them. RFID tags tracking stock in real-time, sensors monitoring goods in transit, IOT-based picking systems – all are designed to streamline supply chains and rely on the network to function.
With an average of 73% being spent on the growth and performance of the supply chain, High Street retailers endanger that expenditure going to waste if the network is stalling innovation. The consequences of an ill-managed supply chain, including late deliveries and lost profits, just add to the woes from missing out on the push towards true innovation.
Once again, the network is critical for digital transformation and innovation to make its mark in the retail sector. Revenue directly suffers when said innovation cannot be enhanced, as it deprives businesses of the opportunity to improve operations and open new avenues to capture customer sales. While network failures and untapped innovation gives retail leaders headaches regarding their diminishing sales and ability to run an efficient supply chain, another threat arises – security.
Sluggish security
The High Street is facing a crisis regarding rising crime. 18% of retail employees were subject to a violent attack in 2023, with over 400,000 shoplifting incidents recorded in the same year. Away from the frontline retail store, cybercrime is also growing at an alarming rate, as 57% of High Street businesses recorded a greater number of incidents compared to previous years. Both online and offline security are paramount to the fortunes of any retailer, with innovative technological solutions providing the key to that strengthened security.
Yet the network infrastructure is the linchpin; if it’s unable to support this tech-led strategy, then a magnitude of problems will emerge…
Proactive security is the new way forward for the High Street. Anticipating and deterring any probable threats ensures that staff and sensitive data stay safe. Traditional security cameras, once equipped with facial recognition software, can provide staff with a pre-emptive warning once any previous offenders arrive on site. Access control, number plate recognition, and 24/7 alarm systems all contribute to providing complete store security.
Meanwhile, threat hunting, awareness training, and endpoint monitoring keeps cyber criminals at bay with measures that close off threats before they escalate further. What they all have in common, of course, is network reliability to guarantee continuous, undisturbed operations.
However, once the network goes down, then the retail environment is faced with a vast attack landscape – both online and offline. With security systems in retail stores offline, blind spots once covered by cameras are now avenues for potential criminal activity, especially when the ability to warn staff of the return of previous offenders is now unavailable.
Access control systems previously installed to manage entrance to particular areas of a store are now unable to function, prompting possible inventory or cash theft by felons, and even staff (40% of retail theft is committed by employees). Alarms designed to provide 24/7 security would also be unable to detect any unsolicited entry if the network has gone down, giving retail leaders further reason to be concerned. Bear in mind, all of this is just for physical retail spaces.
On the online front, a lack of security can prove disastrous. Sensitive data, particularly customer data, is at risk of being compromised during a cyberattack taking advantage of absent defences. Customers will have had their private information exposed, causing brand reputation to suffer; in 65% of data breach cases, that has been the case.
On average, UK businesses take 38 days to identify a cyberattack, and 43 days to actually recover from it. There can be no doubt left on how fatal network downtime can be for High Street businesses when the technology designed to fortify cybersecurity cannot operate.
Cyberattacks are now the leading cause of IT downtime, despite more sophisticated technology being available to deal with these threats. 24% of IT leaders cited cyber incidents as the biggest cause of downtime in their organisations, with those same attacks amounting to 52% of data loss occurrences. It’s abundantly clear just how vital proactive security is to safeguarding network operations, but it’s the network itself that must be reliable enough initially to support these crucial strategies.
No negotiations – the network is necessary!
The technology available to the retail sector is expansive, growing day by day and promising new horizons of innovation. Heatmaps to optimise store layout, augmented and virtual reality experiences, and artificial intelligence (no surprises there) are all just a handful examples of what we can see being more widely implemented on the High Street soon. A larger reliance on technology can put strain on a network, leading to downtime, a multitude of negative consequences, and the opportunity to innovate out of reach.
What unlocks innovation for the retail sector is a robust network that can support digital transformation – a network that’s monitored proactively by a support team available 24/7.
When retailers partner with a managed service provider like Gamma, that path to innovation is open, advancing towards a future where not just technological excellence is achieved, but also a complete re-imagining of business communications. The retail sector is ready to be invigorated by the potential that technological innovation can bring, and it’s the network that will support it.