Merchants in both the food and accommodation space are interested in investing innovation to stay competitive. However, these merchants offer relatively few in-store features. The following Deep Dive examines how the food and accommodation market compares to the health and beauty market in terms of innovation readiness and the factors that motivates each market’s innovation priorities.
Good and accommodation merchants are not alone in pursuing innovations to keep competitive. Those from other industries — including health and beauty — are also making it a key priority, so how do their efforts compare?
Accommodation merchants perform like those from health and beauty. They earned an index score of 34.1, higher than retail firms’ average of 33.5 and the 31.4 earned by food companies. This is lower than health and beauty’s 35.1, however, possibly because the sector’s merchants’ in-store and online offerings are more robust and include loyalty and rewards, coupons, promotion codes and storing online profile data, among other features.
Many merchants across all studied markets pursue innovation to remain competitive. This is especially true for the 78.3 percent of accommodation firms and 77.1 percent of food companies that called it a primary reason to do so, more than the 69.9 percent of health and beauty merchants that said the same.
Accommodation merchants were more likely to consider customer loyalty and business analytics improvements, while those for food more commonly see innovation as a way to boost sales and revenues. Health and beauty merchants placed greater importance on improving customers’ in-store shopping experiences, likely because they encourage patrons to test products before making purchases.
Accommodation merchants are behind their counterparts in terms of preparedness, though. As seen in Figure 3, 43.5 percent are either “very” or “extremely” prepared, a lower share than found in food (49.3 percent) or health and beauty (61.9 percent) firms.When selecting POS vendors, 73.1 percent of accommodation firms pointed to the technology’s functionality as a key reason for adopting it. This was also the top concern for 65.9 percent of food companies.
Different merchant types placed higher emphasis on other innovations. Health and beauty firms considered POS systems’ prices to be most important (51.7 percent), more than accommodation (58.1 percent) and food (61.2 percent) merchants. Food companies were more concerned about providers’ trustworthiness than their counterparts at 58.2 percent.
Food and accommodation merchants may have expressed less interest in adopting smart POS systems than health and beauty companies, but a significant share were still looking for new opportunities to remain competitive and boost sales. These firms also expressed interest in acquiring new providers, and were therefore eager to learn how the right smart POS system could work for their specific needs.