Retail technology works best when it supports, not replaces staff: Study
The findings of the study, conducted by researchers from Goa Institute of Management (GIM), Indian Institute of Management (IIM), Ranchi and University of Missouri in Kansas City, USA, were published in the International Journal of Sociology and Social Policy.
The research found that given the social and technological context in which firms operate, their strategic choices shape their HR strategies, which in turn drive their technology choices.
Coming at a time when Indian retail leaders face pressure from competitors and consultants to digitize human resources and workforce management, the research shows that adopting technologies used by large global retailers often does not work effectively in most retail contexts.
“In retail, technology does not create value, frontline employees do. The question is not what technology exists, but what helps a store achieve greater profitability per square foot with the people it already has and the location it operates in,” GIM Professor of Organizational Behavior and Human Resource Management Anamika Sinha told PTI.
“Socio-technical thinking helps leaders make disciplined choices rather than expensive mistakes,” he added.
The study also finds that the right technology for front-line employees not only improves sales, basket size and customer engagement, but also improves the use of store resources to meet goals. He added that retail formats vary greatly in location strategy, customer traffic, price sensitivity and business intensity.
These differences mean that frontline staff need different levels of autonomy, and technology may need to assist, replace or simply get out of the way.
“Many retail technology investments ignore these differences, leading to higher costs without better results,” Sinha said.
According to him, key factors that increase productivity include digital literacy of frontline workers, inventory systems, and training systems that develop assisted selling talent.
Additionally, operational factors such as store layout, hiring practices, supervisory behavior and peer-focused learning culture also influence whether technology helps or hinders, Sinha said.
Emphasizing that data-based recommendations give better results in premium stores, Sinha said, “In high-frequency hypermarkets, personnel who guide customers in crowded aisles can save time, increase basket size and create loyalty.” he said.
The research highlights that technology’s disregard for social and operational context often adds more complexity than performance.
The biggest gains were observed when technology supported employee judgment and enabled employees to act as knowledgeable salespeople rather than simply processing purchases.
“The research shifts the focus from technology adoption to value and defines human resources technology as a retail store display and not as a strategic benefit,” Sinha said. he said.
Challenging the notion of ubiquitous best practices and contradicting the retail industry by rejecting the use of technology.
Unlike other studies, it evaluated retailers’ realities, which are not best practices, Sinha said.
