Maintaining profitability and stability in a time of war is a challenge for any business. And even more so for retail, where margins are initially very low, but there is a high dependence on external factors. Under these conditions, smart automation of key processes can help businesses.
What RAU Expo 2024 showed
On June 14, 2024, the VII International Specialized Exhibition of the Retail and Commercial Real Estate Industry RAU Expo 2024 took place in Kyiv. It was a testament to the resilience and unity of Ukrainian business in the face of current challenges. Over the two days of the exhibition, more than 1100 participants from leading market companies attended 79 expert presentations, 56 expositions and took part in numerous business conferences.
With all the variety of events at RAU Expo 2024, its main leitmotif was the discussion of how the retail business in Ukraine should operate in times of war. It is no coincidence that the Association of Retailers of Ukraine chose Risk Management: From Resilience to Anti-Fragility as the main topic of the event.
The leitmotif of most of the speeches by practitioners was the search for solutions to improve business efficiency in the face of staff, energy and financial shortages, logistics disruptions and other problems caused by the war. Representatives of companies that managed to not only withstand and adapt to the difficult conditions, but also demonstrated how to continue development and support the country and the frontline.
The key topics of discussion included wartime resilience strategy, market analytics, marketing, synergy of tax and economic policies to ensure sustainability, specifics of working in new markets, solutions and innovations for business. And the “cherry on top” is the automation and innovation of business processes in retail.
However, if you look closely, it turns out that business process automation is directly related to confronting the challenges faced by the Ukrainian retail industry during the full-scale invasion.
Wartime IT
To be fair, even before the Great War, Ukrainian retailers paid a lot of attention and money to computerization and automation of their business. Without this, it would have been difficult to survive in such a highly competitive market. But first the pandemic and then the war – these challenges have dramatically increased the level of requirements for IT infrastructure and the degree of automation of business processes in retail.
For example, the threat of physical destruction of both individual outlets and in-house data centers has been added. In addition, the level of hacker attacks has increased dramatically. All of this prompts us to look for and apply solutions that minimize potential losses, as well as to apply security solutions to protect information, as constant DDoS, hacker attacks on infrastructure facilities, the banking system, and large business players (and there are many of them in retail) are the reality of today.
According to the Microsoft Digital Defense Report 2023 (MDDR), a third of all hacker attacks in Europe in 2023 were aimed at Ukraine. The number of information security incidents in 2023 increased by almost 63% compared to 2022. This means that the issue of protecting IT infrastructure from cyberattacks has become extremely important.
That is why one of the main IT transformations of today’s Ukrainian retail is the transition to the cloud. Currently, the cloud market is a segment that is growing by 20% annually. The share of retail in this growth is 6-7%. In monetary terms, this is billions of dollars and this volume will continue to grow. In addition, large retail chains have begun to request not just migration to leading cloud providers, but also the creation of hybrid solutions (physical + cloud storage), as well as industry clouds.
Another serious challenge for the retail industry today is the lack of staff. High staff turnover has always been a big problem for retailers, not only in Ukraine but also globally. For Ukrainian business, this challenge is more relevant than ever. There are several reasons for the staff shortage: the demographic crisis, migration due to the full-scale war, and a decrease in the number of able-bodied people in the market due to mobilization.
The logical and natural response of retailers to the shortage of staff is to increase the degree of business automation. Retail chains are adding more and more automated solutions to their warehouses and markets; the next step is to maximize automation in their relations with counterparties.
The next challenge is to increase omnichannel. Today’s customers want to buy things and products online but pick them up in an offline store. Or vice versa: to choose in a store but buy online. And many even use the Internet to check whether the product they are interested in is available in an online store.
To meet these demands, physical retail outlets, online stores, apps, and social media must work as a single ecosystem to ensure a seamless shopping experience. And while omnichannel used to be considered a cutting-edge approach by retail leaders, today it is a must for anyone who wants to be competitive. However, this approach requires a very serious improvement of the retailer’s IT system, bringing it to a qualitatively new level.
Another challenge is the personalization of customer experience, which is now moving from the category of a pleasant bonus to a top customer need. It is becoming imperative for retailers to use big data, artificial intelligence, and machine learning to better understand the behavior and preferences of their audience.
A study by the Twilio communication platform showed that 66% of consumers will abandon a brand due to the lack of a personalized approach. At the same time, for 86% of respondents, the personalized experience increases brand loyalty, and 56% are ready to make a repeat purchase from such companies. A personalized approach can reduce customer acquisition costs by 50%, increase revenues by 5-15%, and increase the return on marketing investment by 10-30%. And most importantly, all of this works in Ukraine, too.
After all, marketing and logistics are “eternal” topics. It has become much more difficult to build seemingly normal processes during the war (especially in logistics). Therefore, retailers need new IT tools that will allow them to promote goods and services more effectively and optimize logistics processes.
How LITIKO can help
As you can see, today Ukrainian retail needs a new model of building an IT infrastructure that combines the resources of various cloud environments IaaS, PaaS, SaaS technologies, as well as the most advanced business process automation solutions.
LITIKO, as an integrator of ECM/BPM, ERP, CRM IT solutions, has long been engaged in the automation of business processes for retail and offers modern intelligent solutions for retail chains. We combine the latest technologies with a deep understanding of retail needs to deliver integrated and flexible solutions that adapt to your requirements.