1、1 Deep Dive February 22,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Executive Summary Retailers are facing a host of challenges,including intense competition,macroeconomic headwinds and shifting consumer preferences,and they also ne

2、ed to grow revenues,manage costs and improve efficiency.In this report,we leverage proprietary survey findings to explore the perceived impacts of various business components on US retailers revenues and assess retailers current and planned investment levels in in-store technology to address these.W

3、e reveal how these significant investment plans require accompanying investment in proper supportive cloud and edge technology infrastructure.Market Scale and Opportunity Our survey found that more than two-thirds of retailers plan to increase their investment in technology over the next three years

4、,with nearly three in 10 planning to increase spending by at least 10%.Coresight Research Analysis We identify five major aspects of business that impact retailers revenues:associate empowerment,business insights,customer engagement,operational efficiency,and security and safety.On average,retailers

5、 rank security and safety as having the biggest impact on net revenue compared to other categories.Within safety and security,enterprise data security ranked highest,likely reflecting the enormous pressure on management to maintain customer trust and avoid the negative repercussions of a data breach

6、.Our survey found that retailers experience significant impacts on revenue across a broad range of operational areas.Retailers recognize the potential of technologies to address these areas:at least 86%of retailers indicated that they either currently use or plan to use various emerging technologies

7、 across business categoriesand over one-third of all retailers plan to increase their investment in each type of technology over the next three years.What We Think Our survey results show that retailers have a healthy outlook on IT spending and that they report both using several leading-edge techno

8、logies currently,with concrete plans to use them in the future.To increase flexibility and performance,retailers need to deploy additional computing power nearer to the physical store,which works in concert with the enormous computing power available in public clouds.Deborah Weinswig CEO and Founder

9、 Coresight Research Retail Challenges Drive Edge Technology Investment Deep Dive 2 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.CONTENTS Introduction.3 Market Scale and Opportunity.3 Retail Challenges Drive Edge

10、 Technology Investment:Coresight Research x VMware Analysis.5 Five Business Areas Impacting Retailers Revenues.5 1.Security and Safety:The Most Pressing Category Impacting Revenue.6 2.Business Insights:Supply Chain Challenges and Inflation Remain Revenue-Generation Obstacles for Retailers.73.Operati

11、onal Efficiency:Retailers Require Increased Visibility into Operations Management.8 4.Associate Empowerment:Equipping Staff Effectively To Serve Customer Needs Drives Revenue.9 5.Customer Engagement:Retailers Want To Invest in Online and Offline Integration.10 Retail Technology:Current and Future De

12、ployment Plans.11 About VMware.15 Case Studies.16 What We Think.17 Implications for Brands/Retailers.17 Implications for Technology Vendors.17 Methodology.18 3 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Introd

13、uction Retailers face brisk headwinds in 2023.With market competition increasing,retailers must invest in initiatives to boost revenue and differentiate their business offerings.At the same time,consumer expectations are rapidly shifting,with shoppers seeking a more experiential,flexible and seamles

14、s shopping experience than ever before.Given these factors in the context of an uncertain macroeconomic environment,retailers must address crucial business components and identify solutions to drive growth and weather near-and long-term challenges.In this report,we examine retailers rapid investment

15、 in in-store technology and the implications,leveraging proprietary findings from a Coresight Research survey of US-based IT decision makers conducted in November 2022.We explore the perceived impacts of business components on US retailers revenues,across five major aspects of business:associate emp

16、owerment,business insights,customer engagement,operational efficiency,and security and safety.We assess retailers investment levels in technology to address these components,maintain a competitive advantage and drive sales in a difficult environment.Retailers can tap business gains through technolog

17、y solutions,such as by leveraging cloud computing,which enables them to turn fixed costs into variable costs,access near-unlimited computing power and develop new functions more quickly and easily.Yet the cloud on its own may not be enough;retailers also need to deploy computing power closer to phys

18、ical storesfor example,on store premiseswhich is also known as on-the-edge computing,to enhance security and provide a quicker response for functions such as computer vision,which are sensitive to delays in the network(i.e.,latency).Cloud describes computing infrastructure in which data is sent to a

19、 remoteserver or data center to be processed,managed and stored.Edge describes computing infrastructure in which data is processed closerto the source,rather than sending all data collected to a central data center(such as the cloud).Compared to cloud,edge computing can processsmaller amounts of dat

20、a at a time,process data faster and achieve fasterresponse times once data is processed.In fact,Coresight Research found that 68%of retailers are increasing their spending on in-store technology over the next three years,which we believe will predominantly be focused on edge computing,given our surv

21、ey results(discussed in this report).Finally,we believe that retailers need a software platform that determines which actions need to be performed in the cloud and which actions are best performed locally.This report is sponsored by VMware,an industry leader in multi-cloud services and infrastructur

22、e.Market Scale and Opportunity According to a Coresight Research survey of US-based IT decision makers who spend at least$100,000 on IT solutions per year,conducted in November 2022,more than two-thirds(68%)of retailers spent at least$3 million on IT in 2021(the latest completed year at the time of

23、the survey).Much of that spending is likely to have been focused on expanding e-commerce capabilities to adapt to rapidly Retailers can tap business gains through technology solutions,such as by leveraging cloud computing and deploying computing power closer to physical storesalso known as on-the-ed

24、ge computing.4 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.changing consumer needs during the pandemic,resulting in less spending on physical stores.In the near term,we expect strong IT spending among physical

25、retailers as consumers return to brick-and-mortar stores and expect a more engaging,responsive and tech-enabled shopping experience,as we discuss in our Global Retail in 2023 report.Figure 1.US Retailer Spending on Information Technology in 2021(USD)Percentages may not sum to 100 due to rounding Bas

26、e:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight ResearchOur survey found that more than two-thirds of retailers plan to increase their investment in technology over the next three years,with nearly three in 10(29%)planning to increase spending by at least 10%(see Figure

27、2).We think that this near-term focus on technology implementation indicates that retailers believe they can use technology solutions to realize real and important business benefits and address a range of current business components impacting net revenue.Figure 2.US Retailers Plans for Technology In

28、vestment over the Next Three Years Compared to Now(%of Respondents)Percentages may not sum to 100 due to rounding Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight Research 9%24%40%19%8%1%$500,000 to$1 Million$12 Million$35 Million$610 Million$1150 Million More than$50M

29、illionOver two-thirds(68%)of retailers spent at least$3 million on IT in 20211%5%14%14%39%26%3%Decrease by more than 20%Decrease by 10%to 20%Decrease by 1%to 10%Stay the sameIncrease by 1%to 10%Increase by 10%to 20%Increase by more than 20%Nearly three in 10(29%)retailers plan to increase retail tec

30、hnology spending by at least 10%in the near term.More than two-thirds(68%)of retailers plan to increase their investment in technology over the next three years 5 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Ret

31、ail Challenges Drive Edge Technology Investment:Coresight Research x VMware Analysis Five Business Areas Impacting Retailers Revenues We identify five major aspects of business that impact retailers revenues:associate empowerment,business insights,customer engagement,operational efficiency,and secur

32、ity and safety.Given the background of our respondents(working in IT),we assumed that they would be well versed in the relevant components of these categories.Our survey analysis reveals retailers perceptions of how much these categories impact revenue,indicating the key focus areas and priorities o

33、f these companies.In the following sections,we explore each of the business categories in order of average ranking(with lower ranks signifying bigger impacts),shown in Figure 3.On average,retailers rank security and safety business elements as having the biggest impact on net revenue compared to oth

34、er categories,with nearly half(47%)of all respondents placing this category in Rank 1 or Rank 2(the biggest impacts).However,operational efficiency was placed in the Rank 1 spot by the highest proportion of retailers(24%)and the average weighted rankings of each category are very close,ranging from

35、2.8 to 3.2.Coupled with the strong intentions to increase technology investments,as discussed above,the close rankings reveal that retailers are likely experiencing elements impacting net revenue across business categories,leading them to seek a more holistic and infrastructure-level approach to max

36、imizing revenue through technology implementation.Figure 3.Five Business Categories:Potential Impact on Net Revenue(%of Respondents)Respondents were asked to rank the five categories based on their potential impact on net revenue,from 1(biggest impact)to 5(lowest impact)Base:200 US-based IT decision

37、 makers,surveyed in November 2022 Source:Coresight Research 15%22%24%21%20%19%15%16%24%27%23%16%24%19%20%21%24%20%19%17%23%24%18%18%17%Customer engagementAssociate empowermentOperational efficiencyBusiness insights Security and safety12345AverageRank2.82.92.93.13.2RankOverall,security is perceived t

38、o have the biggest impact on revenue,but operational efficiency was most often ranked in the top spot.Lower average rank indicates a bigger impact Overall,security is perceived to have the biggest impact on revenue,but operational efficiency was most often ranked in the top spot 6 Deep Dive February

39、 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.1.Security and Safety:The Most Pressing Category Impacting RevenueAccording to our survey,as shown in Figure 3,US retailers ranked security and safety as the most significant element i

40、mpacting net revenue.Retailers face a growing number of potential threats and challenges,including cybersecurity breachesa particularly sensitive issue due to potential loss of sensitive customer data and the ensuing damage to the retailers reputation.In addition,organized retail crime,fraud at the

41、checkout terminal and threats to associates safety are increasing concerns for retailers.The National Retail Federation(NRF)reported that retailers experienced an average 26.5%increase in organized retail crime incidents in 2021.Social and legal changes may be accelerating retail crime.For example,v

42、ariation by state in felony theft thresholds enable individuals to steal more or higher-value items without the fear of stronger penalties.According to the NRFs Organized Retail Crime Survey in 2020,64%of retailers reported that they saw an increase in the average organized retail case value in stat

43、es that had increased the felony threshold,up from 51%in 2019.In addition,the Covid-19 pandemic was an accelerant as thieves were emboldened since courts were closed and law enforcement was not responding to nonviolent property crimes.To protect against retail crime,retailers may shift their investm

44、ent priorities:while next-generation technologies can provide bells and whistles,retailers are feeling more pressure since the pandemic to focus on data and asset protection.Within security and safety,we asked retailers to rank subcategories(specific business components impacting net revenue)based o

45、n their impact on net revenue,as shown in Figure 4.Our survey results reveal that enterprise data security is perceived to have the biggest impact on revenue(with the lowest weighted average rank of 3.6)and was most often ranked in the top spot(21%of respondents).We attribute this to increased threa

46、ts of cybercrime and returns fraud,as omnichannel expansion by retailers during the pandemic has resulted in a greater number of potential points of weakness in networks,and cybercriminals have recently targeted technology providers in order to gain access to networks.Among security and safety conce

47、rns,retailers indicated that enterprise data security was the most important element impacting net revenue.7 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figure 4.Security and Safety Subcategories:Potential Impa

48、ct on Net Revenue(%of Respondents)Respondents were asked to rank the seven categories based on their potential impact on net revenue,from 1(biggest impact)to 7(lowest impact)Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight Research Computer vision can analyze customer

49、behavior to determine loitering,dangerous behavior or theft and fraud at self-checkout terminals.This analysis requires a substantial amount of computing power that needs to be available on demand and located on the edge of the network to guarantee acceptable availability and response times(i.e.,wit

50、h low latency).2.Business Insights:Supply Chain Challenges and Inflation Remain Revenue-Generation Obstacles for Retailers“Retailers ranked“business insights”as the second most significant category overall.Retailers continued to combat supply chain bottlenecks and high inventory levels in 2022 due t

51、o inflation and global conflict.Nearly half of all survey respondents ranked supply chain visibility/management as one of the top three components impacting net revenue in the business insights category(see Figure 5).Supply chain visibility/management was also ranked by 17%of respondents as having t

52、he biggest impact on revenue(rank 1)among all business insights subcategories,tied with price optimization.Price optimization is a major challenge affecting retailer revenue,particularly in the current inflationary environment.21%14%16%14%13%13%12%19%15%15%14%15%11%13%13%16%12%21%16%9%14%14%17%13%12

53、%13%16%16%10%15%19%10%15%19%14%14%10%14%15%10%19%19%10%15%12%16%20%15%14%Enterprise data securityCustomer behaviormonitoringAccess controlTheft&fraud detectionSafety robots(e.g.,spilldetection)Age verificationRFID/smart tags1234567Average Rank3.63.93.94.04.14.24.3RankLower average rank indicates a b

54、igger impact Overall,enterprise data security is perceived to have the biggest impact on revenue and was most often ranked in the top spot 8 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figure 5.Business Insight

55、s Subcategories:Potential Impact on Net Revenue(%of Respondents)Respondents were asked to rank the seven categories based on their potential impact on net revenue,from 1(biggest impact)to 7(lowest impact)Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight Research Busines

56、s intelligence and analytical functions are typically not time-sensitive and can be performed in the public cloud.However,required response times for insights from functions such as demand and price optimization are becoming shorter and shorter as the need for data in retail approaches a real-time l

57、evel.3.Operational Efficiency:Retailers Require Increased Visibility into OperationsManagementAs we highlighted earlier,the highest proportion of surveyed retailers(24%)ranked operational efficiency as the business category with the biggest impact on revenue,as shown in Figure 3.Within the operation

58、al efficiency category,our survey found little differentiation between various elements impacting net revenue,given that three of the six categories tied with an average rank of 3.5.Energy monitoring emerged as the top-ranked elements impacting net revenue,on average(with a weighted rank of 3.3).As

59、discussed earlier,global supply chain disruption continues to present major challenges to retailers,with current high energy costs compounding these problems.Retailers seek to address energy costs not only because they are a financial burden,but also to achieve long-term sustainability goals as they

60、 attempt to find alternative energy sources.17%13%14%13%16%17%11%13%21%15%15%13%14%12%18%14%15%16%13%11%15%17%10%17%14%15%13%16%15%17%14%15%13%15%13%12%14%12%13%18%16%16%10%14%15%15%14%16%18%Supply chainvisibility/managementDemand forecastingTraffic flow analysis Inventory/assortmentoptimization sof

61、twareFacial,gesture,and moodsensingPrice optimizationOccupancy sensing1234567AverageRank3.83.93.94.04.04.04.3RankOverall,supply chain visibility/management is perceived to have the biggest impact on revenue and was most often ranked first(along with price optimization)Lower average rank indicates a

62、bigger impact The highest proportion of surveyed retailers(24%)ranked operational efficiency as the business category with the biggest impact on revenue.The top-ranked element among operational efficiency components was energy monitoring.9 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,

63、Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Two of the three subcategories impacting net revenue tied for second placeautomated inventory monitoring and store manager dashboardsreveal retailers needs for increased visibility into their online and brick-and-mortar operat

64、ions,to enable them to cut costs and save time.Figure 6.Operational Efficiency Subcategories:Potential Impact on Net Revenue(%of Respondents)Respondents were asked to rank the six categories based on their potential impact on net revenue,from 1(biggest impact)to 6(lowest impact)Base:200 US-based IT

65、decision makers,surveyed in November 2022 Source:Coresight Research The processing of data from in-store sensors(such as thermostats and lighting),delivery vehicles and other equipment should logically be performed as close to the source as possible to ensure fast response times and not to be hinder

66、ed by network connectivity issues.4.Associate Empowerment:Equipping Staff Effectively To Serve CustomerNeeds Drives RevenueWhen asked about specific subcategories impacting net revenue related to associate empowerment,22%of survey respondents indicated that customer service has the biggest impact on

67、 revenue.Notably,this is the only associate empowerment subcategory directly focused on customers rather than employees,and reflects the idea that edge-enabled devices can allow employees to gain a better understanding of customers.This suggests that retailers may believe that meeting customer-facin

68、g needs is more significant in driving revenue than addressing employee needs.However,recent scandals,such as the Southwest Airlines debacle in December 2022,reveal the detrimental effects of deprioritizing investments in updated IT systems that support employees,including scheduling systems,onboard

69、ing and process management.19%21%16%15%14%16%22%14%17%17%18%14%18%16%18%17%17%15%12%18%20%20%16%16%15%14%16%19%17%20%15%19%15%13%20%20%Energy monitoringAutomated inventory monitoringStore manager dashboardsSelf-service point of sale(SPOS)Autonomous vehicle delivery(e.g.,drones)Predictive maintenance

70、123456AverageRank3.33.53.53.53.63.7RankIn terms of associate empowerment,customer service is perceived to have the biggest impact on revenue.Retailers may believe that meeting customer-facing needs is more significant in driving revenue than addressing employee needs.Overall,energy monitoring is per

71、ceived to have the biggest impact on revenue,but automated inventory monitoring was most often ranked in the top spot Lower average rank indicates a bigger impact 10 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.

72、Other subcategories impacting net revenue generated little differentiation in their rankings,as shown in Figure 7.Figure 7.Associate Empowerment Subcategories:Potential Impact on Net Revenue(%of Respondents)Respondents were asked to rank the six categories based on their potential impact on net reve

73、nue,from 1(biggest impact)to 6(lowest impact)Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight Research Activities that affect customer sentiment,such as associate enablement via tablets or other devices,need to be managed on the network edge to offer speedy service and

74、 to be available during network connectivity issues.5.Customer Engagement:Retailers Want To Invest in Online and OfflineIntegrationRetailers ranked customer engagement as the least impactful category of the options given for company net revenue,as shown earlier in Figure 3.This may reveal a gap in u

75、nderstanding between what customers want versus what retailers think customers want.For example,consumers think brands and retailers are not doing enough when it comes to personalization:71%of brands and retailers think they excel in marketing personalization,but only 34%of consumers think the same,

76、according to Coresight Research surveys conducted in the UK and the US in October 2021.In terms of specific components,respondents ranked app integration and BOPIS(buy online,pick up in-store)as having the biggest impact on revenue,on average(see Figure 8),indicating retailers need for better online

77、 and offline integration.In addition,highly ranked technologies such as infotainment terminals,reality technologies and contactless kiosks are likely reflective of shoppers desire for increased digitalization features in-stores and immersive experiential retail.A 22%18%13%16%19%13%17%22%19%15%15%13%

78、15%15%18%18%17%19%17%13%20%20%14%17%16%16%18%17%14%20%14%18%14%15%22%19%Customer serviceFeedback(e.g.,employeesurveys)Connectivity(e.g.,enablingemployee SmartPhones)SchedulingProcess managementOnboarding(e.g.,initial training)123456Average Rank3.33.43.53.53.53.7RankRetailers ranked customer engageme

79、nt as the least impactful category for company net revenue,which may reveal a gap in understanding between what customers want versus what retailers think customers want.Overall,customer service is perceived to have the biggest impact on revenue and was most often ranked in the top spot Lower averag

80、e rank indicates a bigger impact 11 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Coresight Research survey of US respondents conducted in February 2022 found that online return kiosks and contactless payment opt

81、ions in stores ranked among the top three most popular in-store technologies among US consumers,with 23%and 29%of respondents,respectively,reporting that they would like to see these technologies in stores.On the other hand,non-technology related services,such as shoe repairs/shines and massages,ran

82、ked low on the list of 16 options.Figure 8.Customer Engagement Subcategories:Potential Impact on Net Revenue(%of Respondents)Respondents were asked to rank the eight categories based on their potential impact on net revenue,from 1(biggest impact)to 8(lowest impact)Base:200 US-based IT decision maker

83、s,surveyed in November 2022 Source:Coresight Research Applications such as in-store signage and entertainment and augmented/virtual reality,in particular,are highly sensitive to latency and therefore require edge-computing power and continuous availability.Retail Technology:Current and Future Deploy

84、ment Plans Our survey revealed that retailers believe business components which impact net revenue exist.We believe that technology solutions are key to helping retail companies solve a multitude of current business challenges and drive business growth in both the short and long term.Advanced techno

85、logies can be integrated throughout the in-store shopping journey across multiple business areas,as depicted in the image below.18%14%14%8%10%15%11%12%11%12%11%16%15%11%13%14%11%13%15%16%14%9%14%11%13%15%13%12%13%14%12%11%14%12%11%14%16%12%10%13%15%10%12%16%12%16%12%11%11%14%13%11%10%12%15%15%9%12%1

86、4%10%13%14%15%15%App integrationBuy online,pickupin-store(BOPIS)Contactless kiosksInfotainmentterminalsAugmented/virtual realityInteractive digitalsignageService robotsLast-mile/pickuplockers12345678Average Rank4.24.44.54.54.54.64.64.7Lower average rank indicates a bigger impact Overall,app integrat

87、ion is perceived to have the biggest impact on revenue and was most often ranked in the top spot Technology solutions are key to helping retail companies solve a multitude of current business challenges and drive business growth in both the short and long term.12 Deep Dive February 15,2023 Deborah W

88、einswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Diagram of next-generation technology retail use cases Source:VMware The survey results indicate that retailers recognize the potential of technologies to address business components impacting net reven

89、ue,with most survey respondents having already deployed or planning to deploy various emerging technologies across business categories,as shown in Figure 9:at least 86%of retailers indicated that they either currently use or plan to use each of the 17 retail technologies that we asked retailers abou

90、t.The most widely deployed technology is RFID(radio-frequency identification)or smart tags for tracking,according to our surveycurrently used by 56%of respondents.RFID tags aid in loss prevention and improve sales,store productivity and self-checkout,addressing rising labor costs and shortages.Accor

91、ding to a 2018 University of Leicester study of 10 retail companies that invested in RFID technology,the retailers saw a 1.5%5.5%increase in sales,while their inventory accuracy improved from 65%75%to 93%99%.Coupled with RFID,the other top technologies,such as digital video for loss prevention,revea

92、l retailers focus on enhancing safety and security,which is consistent with survey respondents ranking it as the most impactful business category.As discussed earlier,an increase in retail crime likely led to retailers to invest in tech-based security solutions.According to the 2022 National Retail

93、Security Survey from Appriss,NRF and the Loss Prevention Research Council,69%of surveyed retail respondents experienced increased in-store fraud in 2021.At least 38%of respondents indicated that they plan to deploy each type of technology solution we asked about.The most popular technology that resp

94、ondents plan to use associate audio networks(cited by 51%of respondents),which is unsurprising given that it is currently the least deployed technology(currently used by 40%of respondents)and because implementation of associate audio networks addresses multiple business categories impacting net reve

95、nueCoupled with RFID,the other top technologies,such as digital video for loss prevention,reveal retailers focus on enhancing safety and security,which is consistent with survey respondents ranking it as the most impactful business category.13 Deep Dive February 15,2023 Deborah Weinswig,CEO and Foun

96、der,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.most notably,security and safety.Associate audio networks enable associates to communicate and offer better service,as well as aid retailers in the management and deterrence of crime,in addition to informing customers of s

97、afety protocol through recorded messages and in real time.Figure 9.Technologies that Retailers Are Currently Using or Planning To Use(%of Respondents)Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight Research Corresponding to their strong plans to adopt different techno

98、logies in future,surveyed retailers reported plans to increase their investment in those technologies over the next three years:over one-third of all retailers plan to increase investments in each type of technology(see Figure 10).56%52%51%51%50%49%49%48%47%46%46%45%45%45%43%41%40%38%38%41%40%42%40%

99、42%39%45%47%45%50%46%45%48%45%51%RFID/smart tags for inventory trackingBeacons/communication with customersmartphone appsSensors for energy monitoring/IoT applicationsDigital video for loss preventionSelf-checkout terminalsDigital video for traffic measurementCustomer in-store checkout/scan and goIn

100、-store private wireless communication networksDigital video for inventory management Automated/mechanized stocking/fulfillmentMagic mirrors/smart displaysSmart shopping cartsAutomated/mechanized home deliveryIn-store shopping kiosks/“endless aisle”Decentralized/store-level cloud serversOther traffic

101、 measurement devices like thermalimagingAssociate audio networksCurrently usingPlanning to useOver one-third of all retailers plan to increase their level of investment over the next three years in each type of technology we asked about.Overall,technology adoptiontechnology adoption is remarkably hi

102、gh,with at least 86%86%of retailers indicating they either currently use or plan to use each technology 14 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.The four technologies that saw the highest proportion(17%ea

103、ch)of retail companies indicate plans to decrease investment were traffic measurement devices,digital video for traffic measurement,digital video for inventory management and self-checkout terminals.The function of thermal traffic counters is likely being integrated into existing multifunctional sto

104、re cameras.Similarly,the ubiquity of cameras in retail stores likely reduces the need for standalone digital-video platforms for inventory management,though shelf-edge cameras are a promising technology.Finally,consumers are divided on self-checkout terminals:some consumers consider them difficult t

105、o use and likely to require intervention from a store associate,and finance managers need to be convinced of the units ROI(return on investment).None of the top five technologies that retailers plan to increase investments in explicitly empower associates,which is interesting given that several of t

106、he top technologies retailers currently deploy address this category.This,coupled with the fact that retailers ranked associate empowerment as the second-lowest category,implies that retailers are looking to get value out of the investments they made in this category during the pandemic rather than

107、investing further in the near future.Although associate empowerment technologies may have a more indirect impact on revenue,retailers should not ignore their ability to reduce operating costs.The top technology for future investment is in-store checkout,cited by 47%of respondents.This may be due to

108、a focus on cutting labor costs and increasing efficiency,which can also improve conversion:shoppers may not complete a purchase if there are slow,long lines.Other popular technologies retailers plan to increase their investments in include RFID tags,energy monitoring and Internet of Things(IoT)appli

109、cations.We think that the distribution of investment across business categories impacting net revenue surveyed underlines how crucial technology is in optimizing the future store.The top technology for future investment is in-store checkout,cited by 47%of respondents.15 Deep Dive February 15,2023 De

110、borah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figure 10.Retailers Plans for Technology Investment over the Next Three Years Compared to Now:Breakdown by Type of Technology(%of Respondents)Ordered by proportion of respondents that plan to inc

111、rease investment,from highest to lowest Base:200 US-based IT decision makers,surveyed in November 2022 Source:Coresight ResearchAbout VMware VMware is a leading provider of multi-cloud services for all applications,enabling digital innovation with enterprise control.The companys retail solutions ena

112、ble retailers to benefit from a cloud-native,scalable and secure platform that positions them for growth by accelerating the consumer experience and offering frictionless employee engagement.Some of VMwares latest innovations involve its edge infrastructure,which is crucial in efficiently processing

113、 data to optimize customer experience in retail scenarios.13%10%11%17%14%16%17%12%17%14%12%13%17%14%14%14%16%40%44%43%37%42%42%42%46%42%45%49%49%44%48%49%50%49%47%46%46%45%44%42%42%41%41%41%39%39%38%38%37%35%35%Customer in-store checkout/scan and goRFID/smart tags for inventory trackingSensors for e

114、nergy monitoring/IoT applicationsOther traffic measurement devices like thermal imagingAutomated/mechanized stocking/fulfillmentBeacons/communication with customer smartphone appsDigital video for inventory managementAutomated/mechanized home deliveryDigital video for traffic measurementIn-store sho

115、pping kiosks/“endless aisle”Digital video for loss preventionIn-store private wireless communication networksSelf-checkout terminalsMagic mirrors/smart displaysDecentralized/store-level cloud serversAssociate audio networksSmart shopping cartsDecreaseStay the sameIncreaseVMwares retail solutions ena

116、ble retailers to benefit from a cloud-native,scalable and secure platform that positions them for growth.Over oneone-thirdthird of all retailers plan to increase investments in each type of technology 16 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 C

117、oresight Research.All rights reserved.Case Studies Below,we analyze two company case studies to understand how VMwares edge infrastructure optimizes in-store technology deployment and drives revenue.VMware and Hughes Managed Services x The Vitamin Shoppe The Vitamin Shoppe,a US-based retailer of nut

118、ritional supplements,views its physical stores as a key element of the digital transformation of its approximately 700 US retail stores.The companys vision is for a simpler,higher-performance“network-less”architecture,with fewer potential points of failure that could hurt reliability.In the new arch

119、itecture,processing a credit-card transaction involves the store platform contacting the card processor directly,rather than having to connect through a VPN to the retailers data center,which would then connect to the card processor,as was done previously.The Vitamin Shoppe has a loyal customer base

120、,nearly 90%of which belong to the retailers loyalty program.The need to provide high-quality service to these customers plus nearly every interaction requiring high-speed connectivity makes reliability and performance crucial.In addition,store associates use mobile devices to perform customer lookup

121、,manage inventory,execute transactions and fulfill BOPIS(buy online,pick up in-store)and ship-from-store orders,which have demanding connectivity requirements.With key criteria regarding security,performance(including the flexibility to serve future needs)and cost,The Vitamin Shoppe evaluated soluti

122、ons from a variety of service providers,ultimately selecting Hughes Managed Services,a network and technology solutions provider whose solution is built on the VMware platform plus its own network management service.Thus far,the solution has exceeded the retailers expectations in terms of bandwidth,

123、security,reliability and cost,according to company management.Moreover,the solution is“futureproof,”offering the flexibility to add other devices in the future,such as electronic shelf labels,digital media and self-checkout terminals.VMware and Hughes Managed Services x Major Sporting Goods Retailer

124、 With more than 400 locations in the Western US,a major sporting goods retailer sought to update its technology infrastructure,specifically aiming to improve on-premises network security,enhance multi-cloud infrastructure to support retail operations,and migrate to the cloud.The retailer turned to H

125、ughes Managed Services,which worked in partnership with VMware to deploy Azure VMware Solution and VMware SD-WAN to address these technology priorities.VMware SD-WAN was quickly installed at each retail location,usually in less than 30 minutes,and was up and running to support and connect the retail

126、ers operations at multiple locations,and successfully improved network performance,security,and capacity.An executive at Hughes Managed Services reported that for retailers with many applications running,VMwares suite of solutions enables consistent high levels of performance and is visually intuiti

127、ve,enabling retailers to quickly respond to network issues.The Vitamin Shoppe,a US-based retailer of nutritional supplements,has a vision for a simpler,higher-performance“network-less”architecture,with fewer potential points of failure that could hurt reliability.17 Deep Dive February 15,2023 Debora

128、h Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.VMware x International Supermarket Retailer An international supermarket retailer with over 4,000 stores leveraged VMwares edge computing stack to improve its customer experience,fraud detection and

129、existing applications.To enhance customer experience,the retailer leveraged VMwares smart point-of-sale(POS)systems,enabling convenient checkout experiences anywhere in-store and a personalized customer marketing experience during the customers in-store journey.This significantly impacted the retail

130、er as it completes nearly 20 million in-store transactions every week.Additionally,VMware deployed computer vision and machine learning technology to help the retailer detect POS and self-checkout fraud.Finally,VMware improved the retailers in-store agility by deploying its Tanzu TKG,a technology so

131、lution that helps run various applications,enabling various business units,including business and IT teams,to work autonomously alongside existing applications.What We Think Our survey results show that retailers have a healthy outlook on IT spending and use several leading-edge technologies current

132、ly,with concrete plans to use them in the future.Respondents ranked business insights and operational efficiency nearly as highly as security and safety.To offer the low latency and high degree of local performance on demand that this growing number of in-store devices requires,retailers need to dep

133、loy additional computing power nearer to the physical storeand hybrid-cloud platforms direct which tasks need to be performed locally,versus public clouds.Implications for Brands/Retailers In the current uncertain economic environment,retailers and brands haveto determine spending priorities,from te

134、chnology to other investmentareas that can also benefit business operations(e.g.,sustainability andmarket diversification)and then justify them to their investors.The technologies outlined in this report offer numerous ways for retailers toincrease revenues,reduce costs,enhance customer experiences,

135、increaseefficiency,and reduce friction for employees and customers.Given thepopularity of many wide-ranging technologies,we think that retailersshould consider how these tools can be implemented to improve businessoperations across the board.Retailers also need to complete their move to the cloud an

136、d deploycomputing power nearer to physical stores to improve performance,whichrequires a platform to manage what computing needs to be performedlocally versus in the cloud.Implications for Technology Vendors There are considerable opportunities for sensor and display vendors andinstallers to help cr

137、eate retailers desired in-store experience.Leading-edge platforms help retailers manage operations and efficiency in-store by more securely processing data and improving data processingspeed.To increase flexibility and performance,retailers need to deploy additional computing power nearer to the phy

138、sical store,which works in concert with the enormous computing power available in public clouds.18 Deep Dive February 15,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.There are also many opportunities for technology vendors and softwa

139、re firms to develop industry-specific applications and services for retailers.Methodology In November 2022,Coresight Research surveyed 200 US-based IT decision makers at retail companies with at least 50 consumer retail locations and which spend at least$100,000 per year on IT solutions.Respondents

140、did not include wholesale club,business services/office supplies or auto parts businesses.About Coresight Research Custom Reports Coresight Research Custom Reports are produced as part of commercial partnerships with leading firms in the retail,technology and startup ecosystems.These Custom Reports

141、present expert analysis and proprietary data on key topics in the retail,technology and related industries,and enable partner companies to communicate their brand and messaging to a wider audience within the context of brand-relevant research.This report is sponsored by VMware,an industry leader in multi-cloud services and infrastructure.For more information,visit VM.New York Hong Kong Lagos London Mangaluru(India)Shanghai C Deborah Weinswig,CPA CEO and Founder Coresight Research Charlotte Rothschild Analyst John Harmon,CFA Senior Analyst