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5 Technology Trends To Change Retail Industry In 2020

Retail Industry Technology is widely adopted by retail companies with the quite obvious purposes of overtaking less advanced competitors, gaining new customers, and eventually increasing revenues. Just like technology, retail remains a shifting landscape. In particular, the emphasis on digital transformation continues to reshape shopping, online experiences and even customer expectations of physical stores. The retailers who thrive in this environment are the ones who embrace technological change. Let’s take a closer look at 7 tech trends that will affect the retail sphere over the next few years.

Retail Industry

 

Trend #1: Augmented shopping

A report from Gartner indicates that 100 million consumers are expected to engage in a shopping experience that employs augmented reality. AR has been around a while, but the maturation of the technology—particularly on mobile platforms—has put AR systems in the hands of everyday retail customers.

A number of retailers are embracing the trend. Lacoste, American Apparel and Uniqlo have opened virtual showrooms and fitting rooms to allow customers to try products in virtual spaces. Zara has deployed smart mirrors that read RFID tags on clothes that have been pulled from racks to provide suggestions in a fashion closer to what consumers see from online stores rather than brick-and-mortar locations. Ikea is using an ARKit-based app to encourage customers to visualize what new furniture will look like in a room while moving their phone cameras around in real time.

71% of respondents in a report from 2016 stated they’d be more interested in shopping with a retailer that provided AR-based try-before-you-buy options. By making these experiences more engaging for customers, retailers can create a lure that’ll bring customers back into the brick-and-mortar setting.

Leveraging AR technology to provide visitors with enhanced indoor navigation experience is the next step to building brand loyalty. Wayfinding mobile apps help customers not to get lost and can even lead them to a certain product in a store. Augmented Reality-based indoor navigation is capable to remove shortcomings of beacon-based solutions and provide more accurate user positioning.

Trend #2: Personalized interactions with customers

The big technologies behind personalization are data science and machine learning, which allow retailers to anticipate customer needs before they know what they want themselves.

A McKinsey & Company report indicated that 36% of US companies confirmed having an edge carved out using analytics. Done right, these systems can provide rapid recommendations that speed the buying experience along.

Developing opt-in for data collection is a big part of this process. Rather than just hassling consumers to download an app that many of them will delete once they get the deal they want, incentives have to follow consumer wants and needs. This calls for developing robust shopping profiles, allowing machine learning methods to drill down through information about similar customers. Calls to action can then be tailored to specific users, such as Macy’s has done with its style preference system.

In-store options are catching up to online and app-based ones quickly. A major driver of this advancement is Bluetooth Low Energy and RFID, allowing low-power consumption solutions to be deployed throughout stores. FashionAI, a technology built by Alibaba Group, generates personalized mix-and-match apparel recommendations for shoppers as they move around stores. They can then quickly find items that will fit their tastes.

According to Amazon, 35% of its sales are driven by its recommendation engine. Using AI, these kinds of recommendation systems can be refined in cyberspace and deployed widely in real-world settings.

And of course, we shouldn’t forget about NLP-driven chatbots that get ever smarter and deliver personalized experiences. Even outside the retail sphere, chatbots are expected to be the biggest word in customer service, offering deals and recommendations, providing easy navigation and tracking orders.

Trend #3: Omnichannel retail to deliver seamless shopping experiences

The new age of omnichannel marketing means that customers expect a seamless experience across all channels. They see items on websites, visit stores, whip out their phones and start looking for help. They visit a store, see an item, save it to their phone, go home and want it delivered. They stay online, purchase and expect pickup in the store.

In other words, none of the channels are distinct or meaningful to them. Look at the role mobile-based visual search plays in customers making buying decisions. Pinterest Lens lets a user pull out their phone, snap a picture and find related pins on the platform in a matter of seconds. The platform has experienced 100% year-to-year growth, indicating interest in visual search is there when there’s an app that can do it well.

This also means that other seamless omnichannel interactions are open for use. People are happy to click online and collect items in the store. According to a report from the National Retail Federation, 89 million customers use a combination of online and in-store shopping over the post-Thanksgiving runup for the holiday shopping season. Especially enticing for retailers is the report that omnichannel users spent $93 more than average customers.

Tech innovation finds its way everywhere. For example, the concept of “buy online, pick up in-store” (BOPIS) may seem nothing new for the retail sphere. However, it is close to entering the mass market, with several top retailers having adopted and refined the approach. For example, Walmart, having installed pick-up towers to its stores, employed supporting innovations like driverless vehicles for customers.

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Trend #4: Staff-free and cashier-less stores

Freeing staff members up from menial and time-consuming tasks is an important part of re-imagining the retail landscape in the coming years. The tools that will allow this digital transformation include RFID tags, computer vision systems, machine learning, IoT devices and facial recognition.

One of the most promising concepts in this area is the cashier-less Amazon Go store chain. Despite being not completely staff-free, it still allows smartphone-wielding customers to shop quickly, without time-consuming lines and checkouts. Vendors in the merchant terminal industry are also getting onboard, with Mastercard showing off unmanned checkout technologies for use in convenience stores. Using smart shelves, sensors can be utilized to tie physical products to a customer’s virtual shopping cart. IoT-based systems can then identify when they and the items exit the store, at which point the sale is registered to their credit card.

In 2017, KFC experimented with face recognition software that was tied to predictive systems. The fast food choices of customers were remembered, and sales were sped up in the process.

Self-ordering kiosks are also a trend worth watching. CaliBurger introduced a system in 2018 that recognizes faces and streamlines the ordering process. Loyalty programs and rewards can also be constructed around these technologies, reducing the steps that go into swiping a card in order to get perks.

Trend #5: Voice-enabled shopping to reduce the sales cycle

Voice-based search has taken off in recent years, especially as a function on app-enabled smartphones and television sets. The logic is extremely straightforward. A person can speak 100 words a minute relatively easily, but they can only type half as many over the same time.

The boom in voice-activated systems has largely been driven by companies like Amazon and Google with their Alexa and Google Home products, respectively. A handful of competitors, especially Sonos and Apple, are also driving innovation. The ever evolving IoT technologies will also help smaller competitors to enter the market. According to a survey by NPR and Edison Research, 53 million Americans now have at least a single smart speaker system at home.

Integrating voice into any device is easy thanks to the advent of the Amazon Voice Service. You can expect to see many products that will bear the label “Alexa-enabled” in the near future. This idea found its way to the Internet of Things products like smart mirrors, which deliver varied content in an engaging manner.

There are three net effects that can be gained from voice-enabled retail shopping. The first is the speed and personalization that can be attained. Second, customer loyalty can be encouraged by making things like tracking packages as simple as uttering the question, “Where’s my package?” Third, voice-based systems can be excellent enabling technologies for products like AR/MR headsets, connected automobiles, and smart homes.

Societal adoption remains the strongest headwind against voice technologies. There are continuing security concerns, and access to systems is a worry, too. In particular, parental controls need to be dependable enough that families are happy to leave speakers sitting around their houses.