As the next-generation technology solutions continue to emerge in the areas of big data analytics, artificial intelligence, the Internet of Things, and more, many traditional retailers are weighing the risk of taking the early-stage technology investment plunge.
And according to a recent study by Fung Global Retail & Technology, things are just getting started as disruption in the retail industry is predicted to continue well beyond 2020.
And why not dive in? The higher the risk, the greater the reward, right? Sometimes.
While innovation brings the promise of joining an exciting new era in retail, not every hot retail technology will make it. In some cases, the costs could be too high, the timing could be wrong, or worst of all, the technology might not even work.
Leadership also plays a strong role in the success of even the best ideas.
Consider one of the most high-profile retail technology failures of our time – Powa Technologies.
The one-time London-based unicorn, valued at $2.7 billion at its peak, went bankrupt last year.
Powa created a mobile payment app and point-of-sale terminals for retailers with the goal of providing a seamless experience across all purchase channels.
The company folded due to poor management and technology that simply didn’t work.
Another example is the much-touted RFID technology which came onto the scene nearly a decade ago.
RFID promised retailers the ability to record a variety of information, including quantities and locations of various stock items.
While 96 percent of retailers now have plans to deploy RFID tags on their apparel products, early adopters like JC Penney (NYSE:JCP) pulled back plans to roll out the technology in 2013 because it was too expensive.
Walmart similarly experimented with RFID technology a decade ago, but at wide-scale implementation they failed to wring out inefficiencies and save costs. They have yet to return to the technology.
Yet another example was Tommy Hilfiger’s attempt at virtual reality headsets.
The company felt the technology would enhance the shopping experience in select stores. However, the headsets were removed shortly after their introduction due to poor performance.
The favored innovations of today tout machine learning and artificial intelligence and promise to help retailers streamline processes, predict shopping behavior and trends and create efficiencies that improve margins.
CMOs are all over it. According to a recent Persado study which surveyed more than 100 marketing leaders, 86 of the CMOs said they were planning to invest in AI this year.