The retail sector has undergone drastic change over the last decade. Technology has shaped that change, with customer behaviours and new possibilities both being transformed by technological innovation. Retailers are continuing to look to technology as a key area for investment as they seek to keep existing customers onboard and find new avenues for growth.
This is creating huge opportunities for technology providers, with Gartner forecasting global IT spending in the retail industry to grow by 6.5 per cent this year to reach $209.4 billion, up from $196.5 billion in 2023. In the long term, spending is expected to grow at a 6.9 per cent compound annual growth rate to reach an estimated $262 billion by 2027.
Connectivity is at the heart of many retail technology deployments, with the feasibility of many projects relying on fixed and mobile networks. Mike van Bunnens, managing director, Comms365, explained, “In today’s retail industry, consistent and reliable internet connectivity has become a non-negotiable necessity. The impact of internet downtime goes beyond missed sales; it disrupts operations, erodes customer confidence and damages a brand’s reputation.
“A single instance of connectivity failure can mean the loss of repeat customers, as their trust in the brand wanes. For retailers, always-on internet is essential not just for transactions, but for creating seamless experiences that keep customers returning.”
Van Bunnens added that the retail sector’s shift toward cashless transactions, accelerated by the Covid-19 pandemic, has amplified that need for unfailing connectivity.
He explained, “With most payments now processed through chip-and-pin or contactless methods, internet connectivity underpins nearly every transaction. The rise of pop-up stores has further cemented this reliance on cellular broadband, as these temporary outlets become integral to brand strategy – not just for brand awareness, but to drive substantial sales. Connectivity is key to their success, and 4G or 5G is often the solution of choice.”
Adrian Sunderland, CEO, Jola, also discussed how mobile services are opening up new possibilities for retailers. He said, “Low cost 4G and 5G data multi-network SIMs have solved the affordable reliability conundrum that retailers have faced for years. Broadband connections unusable for days with no compensation or Ethernet circuits for ten times the price, and still no guarantee of 100 per cent uptime.
“A second fixed line is expensive and offers little comfort because it uses shared infrastructure. If you were climbing a rock face you wouldn’t attach your second rope to the same piton. Multi-network SIMs further improve SLAs and negate the need for expensive site surveys, whilst private APN options steer traffic away from the public internet, considerably improving security.”
Sunderland explained that retail customers are using 4G and 5G for temporary sites, for backup and in locations where fixed-line connectivity is impractical, such as for digital signage in retail stores where running cables is difficult. He added, “Multi-network SIMs are useful for multiple, geographically dispersed sites as they negate the need for costly site surveys and provide nearly 100 per cent uptime. One supplier is easier to manage and visibility and control over all SIM assets in a single real-time mobile manager portal is essential.”
Martin Saunders, COO, Highlight, offered a detailed overview of how retailers can stay connected to those networks by ensuring they understand what is happening across them. He said, “Retailers are looking for technologies that enable them to make more data-backed decisions that deliver quantifiable advantages for their IT operations and overall business. This means being able to streamline support processes and increase observability across their stack of technologies to ensure customer experience is at its best.
“Since the network is the backbone of most retail environments, any outage can have a direct impact on a retailer’s revenues and reputation. Retailers are looking for comprehensive service observability across both the network and applications, enabling them to track and monitor the performance of their systems effectively. Any potential issues can then be identified quickly.”
Powerful hardware
Unlike other sectors where software is king for new deployments, hardware remains a vital cog in the machine of many retail estates. Daniel Blaya, vice president of global sales, ProGlove, said, “Retail technologies in demand today focus on increasing efficiency and meeting consumer expectations for variety, speed and convenience. This demand extends beyond the retail floor into the entire supply chain, including the production, movement, and distribution of goods through factories, warehouses, depots and stores.
“With a growing labour shortage in these areas, the need for hardware that simplifies tasks for workers and software that identifies workflow inefficiencies is increasing. Technologies such as collaborative robots, smart glasses, barcode-scanning gloves, and smartwatches are becoming essential for streamlining operations and supporting employees.”
Another key piece of hardware for many retailers is something that will facilitate better communication between employees, and headsets are becoming commonplace. Paul Grant, channel manager for the UK and Ireland, Snom said, “Retail stores are busy environments, often with lots of background noise, which can be challenging for employees that need to be able to communicate with each other, and customers, clearly and effectively.
“PA systems are helpful when making broadcast announcements. However, for employee-to-employee communication, teams need an alternative solution.”
Grant explained that one option is digital enhanced cordless telecommunications, or DECT, enabled headsets. He said, “If you visit your local supermarket, you’ll likely see staff using them to communicate with one another at the checkouts or on the shop floor.”
Grant added, “DECT is a digital wireless standard which does not interfere with other networks due to the dedicated frequency band that it uses. Call quality is often improved and more consistent. It also provides greater coverage compared to Wi-Fi or GSM technologies.
“When paired with a multicell DECT base station headsets allow employees to move around the store freely while remaining connected with their colleagues. If the store spans multiple levels or if staff are going back and forth between the stockroom, the technology’s connectivity and range ensures that they won’t lose signal.”
ProGlove’s Blaya added that these devices generate vast amounts of data, so the ability to integrate this information across systems is becoming a key focus.
Blaya said, “Retailers are increasingly turning to data integration platforms to centralise insights from disparate sources, allowing for more accurate and timely decision-making. By breaking down data silos, these platforms enable a clearer view of operational inefficiencies and customer trends, helping retailers enhance productivity across the entire supply chain.”
Channel companies are supporting retail customers across the UK to deploy these technologies and make the most of their investments, with managed services taking away much of the complexity for these businesses.
John McKindland, head of partner channel in the UK, Sona Business, explained, “Retail technologies that are in demand vary from simple to sophisticated deployments. The high street multiples are looking for a solutions provider that can do everything – the router, the connectivity and the hosted UC plus some data centre services all managed by one MSP, as a central point of contact. It’s a one-stop-shop approach.”
Future developments
There are also plenty of emerging technologies that are finding their way into retailers’ shopping baskets. Artificial intelligence, or AI, is at the top of that list.
For Blaya, from ProGlove, AI might be exciting for retailers, but automation is still having an impact. He said, “The AI boom has generated a lot of excitement around the potential for automation in areas such as supply chains and in-store operations. However, while automation holds significant promise, retailers are taking on a balanced approach, focusing on refining the collaboration between technology and people.
Rather than full automation, there is a growing trend towards partially automated solutions that enhance human roles, helping retailers to harness the power of technology while ensuring that employees remain central to the customer experience.”
“Technologies that promise to improve customer experience will continue to be in demand across the sector. Michelle Kelly, solutions manger, retail, 8x8, highlighted personalisation as a key area of investment. She said, “If there’s one phrase or word driving retail customer experience at the moment, it’s personalisation. People are too busy and cynical towards a lot of offers and promotions sent to them, so the onus is on the retail companies to deliver a more relevant service. Fortunately, there’s a lot that the contact centre can be offering towards that.
“The main thing retailers are starting to accept is that the customer relationship is longer than the previously assumed sales cycle. SMS, WhatsApp and other channels are having great impact and open rates for relevant and targeted promotions. That’s driving loyalty and engagement but these same channels can then be used post-purchase to ensure customers are informed of any updates on their products - the order status, the delivery updates or a nudge to register a warranty.”
Kelly explained that retailers can use SMS for reminders and updates, particularly around events or payment notifications and event bookings. She added, “It’s not always around grand gestures and huge promotions. In fact, another area that is seeing considerable traction is the use of tools for two-factor authentication and one-time passwords as account access and transactions notifications ensures customer data is protected, giving them peace of mind and enhancing their overall experience.
“But it’s not all WhatsApp, SMS and other tools being used for proactive outreach. Video is also having a great moment in retail with contact centre tools being used for help with building furniture, carrying out bike repairs, fixing PCs and much more with the benefits here being immense. For the company, they are helping a customer quicker and that problem solving helps build loyalty. You’ll see more and more of this in the coming years.”
Retailers are also continuing to experiment with blending their online presence with bricks-and-mortar stores to keep their brands front-of-mind for customers. Ross Clinch, enterprise partner manager, Evolve IP, said, “Retailers need to blend traditional in-store experiences with the latest technologies to ensure customers can buy in the manner best suited to them – product offering, and target customer demographic is highly likely to dictate the blend required.
“Technologies being deployed into retail need to be accessible throughout the stores to both customers and staff – a standalone handset at checkout will no longer suffice. Integrated retail-specific headset solutions solve part of this challenge, by enabling staff to be available irrespective of where they are within the store. These incremental efficiency gains enable staff to better support customers throughout their buying experience.”
Retailers are currently facing a shoplifting epidemic. The Office for National Statistics found that 2023 was the worst year on record for shoplifting. More than 430,000 cases were recorded, more than a third up on the year before.
Paul Grant, channel manager for the UK and Ireland, Snom, said, “Retailers are currently facing a shoplifting epidemic – the Co-op, for example, recently announced that it had lost almost £40 million in revenue during its first half due to theft and fraud. Technology such as headsets gives employees the opportunity to react quickly and to discreetly alert colleagues if they spot an incident.
“With more businesses prioritising efficiency and sustainability, the integration of automation into communications is one area to watch too. IP-based phone systems can be used to control a variety of smart tasks – such as turning lights on or off, controlling room temperature and monitoring air quality.
“Public address systems are also able to open electric doors and latches via configurable relay modules, which can be activated remotely by SIP. This automation could help retailers to save costs and energy - particularly in larger stores.”
Working with retail customers
So, how can resellers and MSPs help to address the technology challenges faced by the sector? Comms365’s van Bunnens described how retailers can be supported with their connectivity needs.
He said, “For MSPs and resellers, there is a clear opportunity to help retailers navigate these challenges. By offering resilient, multi-network 4G or 5G backup solutions, providers can ensure businesses stay connected, even in the face of network outages.
“Many connectivity providers offer some form of backup service, but the limitation of being tied to a single network can leave businesses vulnerable. Comms365 takes this a step further by offering multi-network SIM solutions, which provide higher resilience and faster recovery from connectivity failures.
“We’ve seen first-hand the benefits of robust connectivity for major retail brands. Whether it’s ensuring resilient connectivity for fashion chains or using bonded 5G technology to open new distribution centres on time, our solutions can be tailored to meet the evolving needs of the retail sector.”
Clinch, from Evolve IP, commented, “Gone are the days of delivering siloed technologies into retail. Whether it’s telephony, ERP systems, in-store communications, or security and revenue protection platforms, these technologies need to seamlessly integrate, to deliver value to all stakeholders within the organisation.”
He explained that global reach is also becoming a factor, as retailers branch out into new markets. He added, “Therefore resellers and MSPs wanting to win in this vertical need to have an international wholesale offering within their portfolio.”
Like many other sectors in the current economic climate, retailers are also under pressure to make cost savings. Resellers and MSPs that can offer solutions that can make a meaningful contribution to alleviating those pressures will find customers willing to discuss possibilities.
Grant, from Snom, said, “With many small and medium sized retailers facing increased cost pressures, resellers and MSPs need to ensure they are providing stores with highly functional devices, which are easy to deploy and don’t require them to undergo costly recabling projects.”
He pointed to multicell DECT base stations as one example. He explained these allow retailers to scale their communications systems up or down depending on their needs. Software updates can also be sent to these devices wirelessly, enabling IT departments to make time and cost savings.
Saunders, from Highlight, added, “Resellers and MSPs can play a crucial role by leveraging service observability tools that give retailers a clear view of their entire network infrastructure. By identifying overloaded or underutilised circuits, they can ensure their retailer customers can optimise bandwidth usage, ensuring resources are allocated accurately and efficiently.
“MSPs and resellers can simplify information for non-technical teams by breaking down complex technical data into simple metrics, making network information accessible and understandable for non-technical, customer-focused teams. This can empower first-line support staff to respond more effectively to issues, improving overall response times and reducing the burden on more technical IT teams.”
With mergers and acquisitions continuing to shape the sector, channel companies also have an opportunity to help retailers keep their technology under control as their businesses change. Saunders said, “As retail businesses undergo mergers, acquisitions and expansions, their IT infrastructure often becomes increasingly complex. MSPs can help manage and integrate these disparate networks, technologies, and service-level agreements into a cohesive, manageable service. With overall observability, retailers can navigate the complexities of managing different systems and ensure seamless operations across the entire network.”
Educating stakeholders on their options as technology evolves will be critical. McKindland, from Sona Business, said, “Education is the key to addressing tech challenges. That could be online resources to keep up-to-speed where everyone has a personal responsibility to do that. But, for organisations, regular training sessions with their vendors for accreditation and general product training is crucial.
“AI will play a role in this area, enabling access to better presented tutorials [as well as] assessing and guiding employees and organisations through a predicted needs analysis and upskilling the workforce in responses to market trends and changes.”
An open door
Another area of opportunity is to work with retailers to allow them to offer eSIM solutions for their customers. Gabriel Salvate, head of customer solutions, BICS, explained, “One trend you can expect to see blow up in the next few years is retailers offering travel eSIMs to customers. eSIMs are a new type of embedded SIM card that comes with the latest phones. These allow you to connect to a new service provider in just a few clicks.
“People travelling to different countries can purchase a pre-paid SIM to keep roaming charges down. There is particular demand for this in the UK as we see roaming charges return after Brexit.”
Salvate explained that this might sound “highly removed” from the brick-and-mortar world of retail, but offering such a service is easier than in the past. He said, “You don’t need to be a telco, you can launch a travel eSIM offering in a few months through a single partner. Travel brands, retailers and other retailers in the travel business could all cash on this opportunity, but it will be a race before the market becomes saturated.
“We’ve already seen brands like French retailer Carrefour, Uswitch and Revolut launch their own eSIM service – with only more to be expected.”
Grabbing opportunities
Retailers will continue to invest in technology as they look to attract and retain customers so they can continue to grow their businesses. And the Channel can be at the heart of building a thriving retail landscape across the UK and beyond.
Blaya, from ProGlove, said, “Resellers and MSPs play an important role as strategic partners to retailers by bridging the gap between complex technology solutions and its end users.
“With deep-seated understanding of the retail sector, partners can provide tailored solutions that meet the unique needs of each business, driving seamless human-machine collaboration. They can position themselves as a one-stop shop for retailers, helping them over any adoption inertia, and to stay ahead of industry trends while optimising operations in ways that truly drive the business forward.”
This feature was included in our November 2024 print issue. You can read the magazine in full here.