How Secure and Resilient Connectivity Drives Operational Success in an Omnichannel Retail Environment

Central to this digital transformation is critical connectivity. Enabling the successful deployment of:

• Real-time AI capabilities
• Online Point of Sale (POS)
• Self-service kiosk systems
• Real-time-dispersed inventory management systems
• Intelligent asset tracking
• Managing of vehicle fleets and their transported assets [for meeting delivery service level agreements (SLAs)].

Connectivity being the invisible thread tying together modern retail ecosystems and central to safeguarding sensitive customer data.

As the reliance on IoT enabled omnichannel retail grows, however, so does the challenges in maintaining complex, stable, and secure networks across dispersed sites.  

This blog, therefore, delves into the key transformations in technology and consumer behaviour that are affecting retailers and the increasing critical role of connectivity in retail operations. Covering key areas including the roles of AI, ML and Hybrid Intelligence Systems, as well as the role of technology in building new customer experiences [i.e. via Augmented Reality (AR) and Virtual Reality (VR) systems]. Offering powerful insights into current challenges, as well as looking at some actionable strategies. 

The retail industry now stands as one of the most dynamic sectors in the world, shaped at the cutting-edge of evolving consumer behaviours and expectations. The rapid technological advancements and fierce competition has meant that retailers have needed to embrace a wide array of digital tools to remain relevant. From advanced inventory systems, highly personalised customer engagement platforms, to digital smartphone marketing, retailers have tended to lead the way.  

Retailers today must therefore operate within highly interconnected environments. Connectivity playing a major role in customer engagement for both on-line platforms and in-store environments. Successfully integrating these systems by creating connected and seamless end-customer experiences being key to a retail brand’s: 

• Digital services adoption 

• Successful customer engagement 

• App reuse  

Consumers make all sorts of judgments about the flexibility, seamlessness, and frictionless appeal of these types of services (and in so doing also making inferences about the quality of the retail brand’s operations). In omnichannel scenarios, these being highly interconnected with the expected experiences of physical stores. 

Connectivity is also central to how consumers perceive in-store experiences. From the moment a customer walks into a store to the completion of their transactions, a web of systems is at play that is central to the stores digital infrastructure. For example, POS terminals must communicate with central servers to verify payments; digital signage must update in real-time with tailored promotions and pricing; and inventory systems must track stock levels across multiple locations to coordinate fulfilment services. For all these systems to function seamlessly, robust connectivity is essential across the (multiple) retail store footprints.  

This greater intrinsic reliance on connectivity that digitisation brings, creates a host of challenges that can disrupt key operations and destroy the appeal of omnichannel experiences. Retailers must therefore grapple with complexity of systems, maintaining a high-level service uptime, managing both new and legacy equipment while also integrating physically disparate technologies.  

Connectivity failures, even brief ones, can ripple across the entire operation, resulting in tangible financial and reputational losses. For example, POS systems are the lifeblood of retail transactions. A reliable connection is not only necessary for processing card payments, but also integrating loyalty rewards, and updating sales records in real time. When connectivity fails, the effects are immediate: customers grow frustrated, lines grow longer, and transactions may be abandoned altogether. Without reliable and ultra-secure connectivity even the most sophisticated systems can falter, leading to lost revenue, reduced efficiency, and disappointed or dissatisfied customers. 

As retail operations become more digitised, the risk of cyberattacks also grows as attack surfaces increase and become more complex. Retailers must handle vast amounts of sensitive customer and account data, from payment information to customer profiles across a wide range of geographies. A single security breach can compromise this data, resulting in financial loss and reputational damage. Cyberattacks or Denial of Service (DOS) Attacks can also disrupt connectivity altogether. Investing in secure connectivity solutions is therefore a critical aspect of sophisticated omnichannel retail operations.  

Retailers are facing a landscape shaped by rapidly advancing technology, shifting consumer behaviours, and increasing on-line competition. At the heart of this transformation is a need for resilient and securely connected systems that can meet the needs of fast paced and dynamic retail environments. Due to the transformational ways consumers shop on- and off-line, the retail industry is facing several significant technological challenges in this area. Given the greater complexity that omnichannel retailing requires, this means that connectivity systems must be highly geo-available, robust, and secure to ensure seamless consumer services and for business continuity. 

System connectivity is the backbone and orchestration technology for a whole range of services that comprise omnichannel retailing offerings. Networks that can adapt, recover, and maintain operations under all conditions and in all omnichannel retail scenarios are critical to success. Without it, even the most promising digital initiatives can falter, leading to customer dissatisfaction, logistical and operational delays, and poor financial performance.  

Resilient connectivity therefore serves as one of the key pillars of modern retail operations. Ensuring that every component, from payment systems to inventory order management, functions seamlessly and securely. Allowing businesses to remain operational during disruption scenarios, be it network outages, equipment failures, or security breaches. In a world where 97% of businesses report a range of connectivity issues impacting their operations monthly, investing in resilient connectivity solutions is therefore essential.  

A broad range of integrated wireless, cellular, broadband and back-up technologies are key to modern omnichannel retail. The effectiveness of in-store Wi-Fi and mobile connectivity have always been crucial to utilitarian operational functions but is now also central to the ability to effectively deploy informative, pleasurable, and hedonistic shopping experiences for consumers.  

Retail system interconnectivity and connectivity now being core to: 

• Expanding Consumer Experiences 

• Seamless Integration of Online Channels and Features with Physical Store Spaces 

• Strategic and Operational Data Collection and Analysis Using AI and ML 

• Increased Dynamic Customer Engagement and Personalisation 

• Creating Operational Efficiencies 

One of the key issues many retailers face, however, is the fragmentation of these systems that can create a poor overall experience for consumers. To succeed in omnichannel, they require all touchpoints to operate effectively and to relate well to each other.  

Secure and highly optimised wireless, mobile and Wi-Fi connectivity are central to these systems, and are increasingly expanding across sites to reach out and engage with customers from before they arrive.  

For example, the appropriate use of EV charging systems provides attractive rewards for visitors and can play a key role in their selection of retailer. They can also help ensure customers are incentivised to download and use store apps which is critical to a broader engagement between the retailer and the consumer. Whether it is to park or charge their vehicle, access product information via interactive displays, or utilise showrooming or webrooming services, apps and Wi-Fi are the essential tools and starting points for creating omnichannel conversations. Offering the potential for more personalised engagement and dynamic solutions to be offered to customers whether they are in-store or elsewhere.  

These systems, however, need to subtly navigate the needs to remain relevant dynamically, introducing spontaneity, discovery, novelty, and variety. Becoming informative and value-adding for the consumer. Avoiding appearing to misunderstand a consumer’s needs or overtly appear to track or pester them.  

While the use of AI and ML are critical to the ability to offer these services, employee engagement and the use of hybrid intelligence systems remains key to avoiding the many pitfalls associated with them. 

Retailers implementing omnichannel retailing also often encounter hurdles caused by issues such as: 

• Managing outdated systems 

• The safeguarding involved in managing intricate data  

• Creating a high level of system interconnectivity  

• Maintaining operational protocols and system interfaces to create a consistent brand image  

The main hurdle in implementing omnichannel is therefore interoperability. Many traditional retailers having systems in place that are incompatible with modern and flexible e-commerce platforms. Causing data silos which hinders secure, seamless information exchange, and as a result, leads to sub-par customer experiences. 

To provide the flexibility of intra-store, inter-store and on-line product and service exchanges, and flexible home or collect-and-collect deliveries, connected supply-chains are fundamental to the success of omnichannel retail experiences. Moments matter in customer decision making, which requires a range of objects, assets, and system interfaces to be reliably connected together. Supply chain interconnectivity and resilience also means preparing for the unexpected.

For example, unexpected issues and events can disrupt the visibility of products or stock. Recent geopolitical tensions and natural disasters highlighting the need for more adaptable and effective forecasting systems, supply chains and back-up options. Retailers are also increasingly use AI and ML to help predict and adapt to a range of disruption scenarios. The ultimate aim being to establish supply chains that are highly visible, flexible, and robust. 

As retail becomes more digitally interconnected, the risk of data breaches and cyberattacks increases. Requiring the investment in robust security measures, processes, and technologies. Important as the greater integration of omnichannel and online retail technologies has led to some notable incidents being reported to the UK’s Information Commissioner’s Office. Retailers must therefore focus on enhancing their digital security through advanced encrypted data communications and storage, completing frequent security audits, and ensuring comprehensive employee training is in place. Vital for protecting confidential data on an ongoing basis and essential for upholding public and consumer confidence in the retail service brand. 

Cyber security is not just about business resilience and continuity, it is also about protecting financial systems, customer, and stakeholder data. Retailers therefore need to ensure that consumers, business, and financial data is secured, private and compliant with industry regulations. 

For example, the PCI DSS (Payment Card Industry Data Security Standard) applies to any organisation that captures, uses, transmits, or stores card-holder data. A requirement for any device, software or system that uses credit or debit cards provided to consumers by the major card-issuers (such as Visa and MasterCard). Despite the existence of the PCI DSS system since 2004, however, data breaches do still occur, which can result in significant cost and embarrassment. 

Integrated payment gateways are essential for achieving the seamless omnichannel retail experience that many sellers are striving for. Helping businesses centralise the all-important payment processes and providing customers with a variety of frictionless payment options; including PIN based and contactless credit card payments, mobile app payments, digital wallets, unattended self-service kiosks, as well as online systems. Integrated forms of these systems offer a significant advantage by maintaining consistent transaction records and payment methods across the different purchasing channels. Major retailers, like Walmart Stores, for example, utilise these systems to combine in-store retail and online payment services.  

It is crucial that while these systems offer the flexibility consumers require, they also maintain the highest levels of security and compliance. Payment and data security is always a paramount concern, but the use of advanced encryption and tokenisation features are helpful in protecting client information during transactions and can help reduce the risk of data theft or loss.  

Cyberattacks are an ongoing and significant threat to the retail and hospitality industries, primarily because these sectors handle large volumes of credit card information and personal data. Many retailers, however, fail to regularly update their POS systems with the latest security measures or standards, often relying on basic anti-virus software to meet only minimum-security standards. In open-source systems or with the increasing use of Android in payment terminals, this means that extra layers of network security are required.  

POS systems and their cloud services are attractive cyber targets because they store and process vast amounts of sensitive customer and financial information. For example, credit card details, bank account numbers, customer names, addresses, and other important personal data.  

Cyber attackers infiltrating these systems through various attack surfaces or vulnerabilities are seeking ways to steal, manipulate, or exploit valuable information. Their primary goal often being:  

• Data Theft: Harvesting credit card numbers, expiration dates, and CVV codes for fraudulent transactions. 

• Financial Gain: Selling stolen data on the covert web or directly exploiting it for financial fraud. 

• Business Disruption: Using ransom-ware to lock POS systems and demand a ransom for restoration. 

• Exploitation of Customer Data: Leveraging customer information for identity theft or phishing campaigns. 

Secure, in-store and IoT connectivity, data storage and back-up systems are therefore an essential component in safeguarding customer and sensitive system data. Ensuring security compliance while also affording effective system interoperability.  

The EU GDPR (General Data Protection Regulations) gives individuals more control over their personal data collection and processing and imposes key responsibilities on organisations for data protection. ISO 27001 also being an important global standard for information security in retail. Being certified helps organisations understand and manage cyber risks methodically and have systems in place that help maintain operations during attacks.  

Strict adherence to standards is crucial as is regular penetration testing (a structured form of hacking where ‘attackers’ work on your behalf to uncover any vulnerabilities that could be exploited). A useful method for assessing the ongoing security of networks and online applications. By pinpointing vulnerabilities, security teams can focus on making the necessary improvements to overcome digital intruders. 

Despite the growth in self-service and retail automation systems, many retailers struggle to find and retain key employees. Affecting their customer service levels and operational efficiencies in omnichannel environments.  

AI and IoT technologies, however, allow more scalable automation of repetitive tasks. In omnichannel settings, consumers can complete parts of the process themselves, particularly when aided by aided by AI. For example, scanning QR codes to see instant product information, using self-service kiosks that intuitively predict their needs and help them place orders, as well as self-checkout systems and subscription services that meet the needs of their daily or weekly routines.  

AI and IoT can also provide advanced real-time analysis of complex data sets. Freeing up valuable human resources for more strategic or creative activities, such as improving customer engagement and feeding their knowledge and learnings into Hybrid Intelligence systems. Thereby creating a development trajectory that builds more creative and innovative human and AI ‘tuned’ services that can provide retail businesses with a real competitive edge. 

With AI, retail staff in the future will need to be a blend of tech-savvy and customer-focused. As AI increasingly takes on basic or repetitive tasks, employees can become experts at helping create memorable shopping experiences and social interactivity for consumers, aided by real-time systems that analyse data and provide key insights. Forward-thinking retailers are therefore now offering advanced training programmes to help staff handle the new technical tasks that using AI systems entails. Helping to create a mindset that assists them to use these technologies interactively towards improving levels of customer service. 

Technologies including smart-building IoT systems, digital displays, inventory tracking and Bluetooth beacons are important for creating seamless omnichannel experiences. Click and collect, secure locker deliveries, buy in store and deliver to home, and customer friendly home delivery options all rely on sophisticated asset tracking and fleet vehicle connectivity systems. Powered by resilient and secure connectivity that form part of a frictionless service solution. 

These systems are also vital for creating operational efficiencies. Increasingly, suppliers to retailers are engaged in using such systems and systems such as smart shelves to facilitate faster and more responsive demand predictions and automated re-ordering systems to ensure popular items remain actively replenished and available in real-time. Enabling slow-moving goods to also be removed or downsized.  

Dynamically connected digital-pricing displays being central to these types of services. Ensuring that promotions and offers can be transmitted across all channels and displayed effectively in store seamlessly and in real time for a desirable, instant, and cohesive effect.