Retail technology works best when it supports, not replaces staff: Study

Human resource technology in retail works best not when solely relying on advanced systems, but when it helps frontline employees in turning store space into a better customer experience, according to recent research.

The findings of the study conducted by researchers from the Goa Institute of Management (GIM), Indian Institute of Management (IIM), Ranchi and the University of Missouri, Kansas City, USA, have been published in the International Journal of Sociology and Social Policy.

The study found that, considering the social and technological context in which firms operate, their strategic choices shape their HR strategy, which in turn guides technology choices.

 

The research, which comes at a time when Indian retail leaders face pressure from competitors and consultants to digitise human resources and workforce management, shows that simply adopting technologies used by large global retailers often does not work effectively in many retail contexts.

"In retail, technology does not create value, frontline employees do. The real question is not what technology exists, but what helps a store earn more per square foot profitability with the people it already has and in the location it operates," Anamika Sinha, Professor, Organisational Behaviour and Human Resource Management, GIM, told PTI.

She added that "Socio-technical thinking helps leaders make disciplined choices instead of expensive mistakes."  The study also finds that the right technology with frontline employees not only improves sales, basket size, and customer engagement, but also the use of store resources to meet its goals.

Retail formats differ widely in location strategy, customer traffic, price sensitivity, and labour intensity, it added.

These differences mean frontline staff need different levels of autonomy, and technology may need to assist, replace, or simply stay out of the way.

"Many retail technology investments ignore these differences, resulting in higher costs without better results," Sinha said.

According to her, the key factors driving productivity improvements include digital literacy among frontline employees, inventory systems, and training systems that build assisted selling capability.

In addition to this, operational factors such as store layout, hiring practices, supervisory behaviour and peer-driven learning culture also influence whether technology helps or creates obstacles, Sinha said.

Emphasising that data-driven recommendations tend to work better in premium stores, Sinha said, "In high-frequency hypermarkets, staff guiding customers through crowded aisles can save time, raise basket size, and build loyalty."  The research highlights that technology ignoring social and operational context often adds more complexity than performance.

The largest gains were observed where technology supported employee judgment, allowing employees to act as informed sellers rather than just processing purchases, it said.

"The research shifts focus from the adoption of technology to that of value, defining human resource technology as a retail store display and not as a strategic benefit," Sinha said.

Defying the concept of ubiquitous best practices and contradicting the retail industry by refusing the use of technology.

Unlike other studies, it evaluates the realities of the retailers, which are not best practices, Sinha said.