Business Operations Future of Work Essay

INTRODUCTION

In the last few years alone, technology has evolved to an extent where the way people do business has changed significantly and now that we stand on the eve of industrial revolution 4.0, it is impressive to see how far technology has come and where it is planning to go. According to Chen et al. (2012), companies have more data and information at their fingertips than ever before about the customers, competition, the industry and market trends etc. and they also have access to this data instantly which helps them make decisions on the fly. Artificial intelligence is also making great strides in the retail industry allowing for mass personalization and customer centric retail trade activities. In fact, 85% of all transactions will be AI based by 2020 and 2018 will be the year to witness scalability in AI (Rogers et al. 2015). Drone technologies, Robotics, automation, augmented reality etc. are impacting retail concepts of supply chain, inventory, selling, marketing etc. While these technologies may be 5 to 10 years out before they are rolled out in public for commercial use and a significant adoption rate it achieved, the prototype and applications for these technologies in retail is already being discussed and organizations that plan to stay competitive in the future are already thinking of waysto implement these technologies as soon as they become available as well as their application to specific systems and processes to streamline operations, improve performance and achieve business objectives.

AIM OF THE ESSAY

The aim of this essay is to evaluate the impact of Industry 4.0 on retail sector and to recommend retailers so that they can embrace future challenges in the retail industry. Since, retail sector is a large sector of the economy so in order to limit the scope of the essay, we define retail trade as inclusive of the following practices and functions of a retailer-buying and selling of goods directly to the customer, warehousing and storage, focus on customer satisfaction, promotion and advertisement of the product etc.

CURRENT ISSUES IN RETAIL SECTOR

Majority of the present day retailers are primarily engaged in the traditional business model in which customers have to come to the retail store, spend time on exploring the options that are available at the store, make comparison and based on this, make a purchase decision. The selected items are billed by the retailer, and customer can take those items with him to their home. In order to support customers in the purchasing process, retailers have to keep a stock of item on the shelf. The items are kept in stock in the warehouse and as soon as customers take these items from the shelf, retailer replenishes these from the shelf. This requires an analysis of sale of items and then human effort for replenishing item (Wang et al. 2015). Because of cost optimization, retailer try to hire as little people as possible so that cost can be saved and profits can be increased. This leads to a situation in which one cannot identify why or why not customers have purchased some items (Rezaei et al. 2014). Moreover, this process is also time-consuming as retailers have to travel to the store and spend time on shopping and travel back to their homes. Moreover, this process is also time-consuming for the retailers as they have to purchase stuff, put in their warehouse and then transfer to the shelf. Retailers also have to keep track of the shelf so that if needed, more items can be replenished (Fafatas and Fischer 2016). Lots of money is invested in the stock and in storing it. No or minimal information is obtained about the current purchase preferences of the customers. Moreover, it is also very difficult for the retailer to make an accurate estimate of future purchase preferences of the customers (Rogers et al. 2015). These problems need to be addressed. Courtesy of Industry 4.0 and industrial revolution 3, new technologies have emerged that has and will transform future of the retail sector by making it more technology intensive, buyer-oriented, intuitive and futuristic.

FUTUURE WORK IN RETAILTRADE INDUSTRY AS A CINSEQUENCE OF FOURTH INDUSTIAL REVOLUTION

There are number of drivers of Industry 4.0 which will shape retail industry in next 5 years. An account of few of these is mentioned below.

BIG DATA AND ANALYTICS

Technologies in the fourth revolution will impact many industries including the retail trade industry. One of the most obvious changes to this industry is the use of big data, which is something that has already started impacting the way things work in retail. Big data in retail does not only allow to build a 360-degree view of the customer but also help with the measurement of brand sentiment, create personalized promotions and messaging, optimize e-commerce and social media marketing activities, help in inventory and supply chain management which is a big part of the retail trade industry scope of work. According to Gandomi and Haider (2015), only digitization cannot help supply chain and procurement, there are other industry 4.0 technologies required to create successful platforms and strategies like Internet of Things IoT, smart data, cloud technology, ERP systems etc. There are in fact use cases already in the industry on how big data can help you make smarter decisions. Forbes 2018 discussed how Target, a U.S. based department store leveraged on big data and analytics by identifying prospective pregnant women. Another success story of using big data to create successful strategies in the industry include the use of data and analytics to model predictive behavior and use this approach instead of the end of season sale to estimate he rise and fall of demand for a product which was found to be more accurate 90% of the time (Wang et al. 2018). According to Sivarajah et al. (2017) reports that 62% of companies that utilize big data report a competitive advantage for their organization for instance, consumer technology and multi-channel shopping experiences are changing in the sense that a consumer begins researching a product on a mobile or an app, purchases it online, picks it up at a store; coordinating these activities require interaction of different elements utilizing the big data and analytics aspects that are high on volume and velocity. It is anticipated that in the next few years, Big data
would be used by all the members of the supply chain and will help firms in development of lean supply chain. It means that instead of final retailers, all members of the supply chain will produce when needed. Moreover, artificial intelligence coupled with big data will make miracles. It would create a system, which will imitate human thinking and forecast future purchase and consumption pattern of human beings with high accuracy. By linking this system with enterprise resource planning software of all the members of supply chain, the new information system will be able to control the whole production process and thus be able to build a lean supply chain.

VIRTUAL REALITY

Even more fascinating is the use of virtual reality in the field of retail. According to Sherman and Craig (2018), virtual reality can be seen as a world portrayed through a three-dimensional computerized interface that imitates the environment of the real world. With more and more business moving to e-commerce and brick and mortar stores slowly edging out of the business, virtual reality offers unparalleled experiences to customers that do not want to travel to a physical location and even if there is a physical store, they want to experience product/ service offerings that are usually hard to sample. For instance, retailers like GAP are already offering Virtual dressing rooms which utilize a virtual 3D model to allow customers to try on clothes and see if they fit or like them. This is revolutionary in the field of fashion retail which strengthens the case for online or e-commerce retailers as well. Fashion and apparel is not the only industry that can benefit from virtual reality (Dascal et al. 2017). Other retail businesses that can include this technology in their operations are tile and flooring shops, bathroom accessory, fitting and design providers, wall paint retailers etc. These can use the virtual reality technology to provide a more personal and tangible experiences to the customers, which will make it easier for them to get the customer’s buy in (Tyrrell et al. 2017).

ROBOTICA AND AUTOMATION

Automation through advance robotics is also connected to the retail industry, even if indirectly. These technologies are expected to extensively impact the supply chain, logistics and manufacturing functions that retailers may perform, especially if they are larger in size. Automatic packaging, labeling etc. for online retailers like Amazon are some of the many success stories in the retail industry for automation. Culla et al. (2017) argue that traditional warehouses can be converted into zero inventory transit terminals where inventory processes are totally replaced by transportation and sorting activities performed through robotics and automation. The RFID technology for instance offers opportunity to retailers, to follow products through the process and automate inventory management (Fiorini et al. 2015). Treadgold and Reynolds (2016) argue that ground based robot technologies as applied in the case of Amazon and Google through substantial investments to address fulfillment challenge. These trends will amplify in the near future as these are highly accurate, systematic and organizations have started enjoying it. It is anticipated that in future, there would be no need of placing items in sorted form in the warehouse. They can be placed anywhere and in order. When these items will have an RFID, the robot will track those items using their RFID and will pick those from the location where they are placed. This will save sorting and arrangement time in the warehouse (Jorge et al. 2015).

DRONE TECHNOLOGY

Drone deliveries are another retail 4.0 technology, that are being introduced in the market to solve multiple challenges in delivery and logistics in detail. According to Goodchild and Toy (2017) drone deliveries stop the need for road transportation and would surely cut transit time; but airspace and safety concerns are two very steep barriers to overcome. These drones are supposed to be unmanned aerial vehicles that can make door-to-door delivery thereby working through difficult to reach terrain and infrastructure issued. There are companies like 7-Eleven in the US that have successfully completed FAA approved drone delivery in 2015 and the trend is just starting to pick up with more and more retailers expressing interest in this technology (Evans et al. 2015). According to Marin et al. (2015), drone technology continues to increase in sophistication, and the cost keeps coming down and most importantly the consumers continue to demand faster delivery, which means that it won’t be too long before everyday deliveries are being made by drone.

CONCLUSION

Industry 4.0 offers a lot of potential opportunities to the retail trade industry to create synergies and efficiencies through newly identified technologies that are expected to significantly improve the business and future of work for the better. It is critical however to understand that retail is a broad umbrella and may cover different kinds of retailers selling different things from apparel to electronics, home furnishings, hardware etc. Therefore, based on individual business needs, it is critical that these business organizations start mapping out these needs in the coming time and start thinking of investing into technologies that can help their business perform better. Experts and consultants can be hired to navigate the company through this exciting phase to make it ready for the next stage of evolution in technology. It is also important to understand that while technology is changing for the better, critical and technical skills like Information technology, data and analytics etc. are a key component of all elements of Industry 4.0 and may create significant gaps in the talent pipeline. Hence while considering which technologies to invest into, retailers also need to consider cultivating the talent that is available and hone their skills into enabling them to do their job better in the future so that revenue is not adversely affected.