The Tech Trends That Will Shape The Future of the Retail Sector
- Digital Transformation of the Retail Sector
- Retail Technology Trends
The retail sector has undergone numerous transformations, especially in recent years, which is why it’s crucial that amidst this spiral of change retailers find a way to adapt to the new shopping habits of customers.
Unlike other sectors where the main objective is to be profitable, in the retail sector the focus of 2022 shifts to achieving an excellent and personalized customer experience. The last few months have further accelerated the digital transformation, and customer habits have shifted towards omnichannel shopping and e-commerce. This means that it is essential to understand where these trends are heading and what are the keys to making a business competitive in the future.
The retail sector is an economic sector that refers to the sector in charge of providing goods and services to the final consumer. It is the industry most closely linked to consumption, bringing together companies, traders, products, and consumers. The clearest examples are supermarkets, shops, and bookstores.
Digital Transformation of the Retail Sector
As mentioned above, consumer habits have changed more rapidly and significantly in recent years, and this means that retailers can get stuck in more traditional habits. It is vital that companies see and understand the new trends and how digitalization can become their best ally.
In the United States alone, e-commerce grew more than three times faster from 2019 to 2020 than in the last five years, which translates to far more consumers now purchasing products before trying them. For traditional retailers to build stronger and more memorable relationships with their customers, it is essential to create a stronger brand and offer a better immersive customer experience based on digitization.
According to Forbes, “95% of all customer interactions will be powered by AI, making it a crucial tool for retailers to remain competitive.”
By relying on technology, business decisions are improved with the goal of increasing sales, thanks to the analysis of millions of data in real-time, the commitment to disruptive proposals, convenient and simple payment methods, or automating processes are just some of the proposals to become a smart, profitable and future-proof retailer.
Discover the tech trends that are transforming your industry
Get our FREE technology trends report by sector.
Retail Technology Trends
We are facing an omnichannel customer that demands personalized experiences. Therefore, our challenge must be to be able to predict consumer behavior and the possibility of satisfying these needs in a simple way and at the time the user demands.
Technology has become responsible for making all this possible, and the following are the ones that will shape the future of the retail sector.
Hybrid and omnichannel Customer Journeys
The trend towards a digital model is growing more and more, as it offers great convenience by allowing shopping from anywhere, anytime. It is also a perfect opportunity for retailers to track customer behavior.
At the same time, in-store shopping still offers great appeal for those who prefer a more ‘tactile’ experience. Hybrid shopping, therefore, brings together the best of both worlds to create customer journeys that meet all their requirements.
Physical retail outlets can leverage logistics and inventory management innovations to offer flexible payment methods or loyalty programs. In addition, online retailers can build customer relationships and offer immersive shopping experiences from traditional retailers to apply to online commerce.
XR and Metaverse for Immersive Shopping
Customer experience is one of the most important aspects of the retail sector; therefore, retailers must cater to efficient, consistent, and memorable service.
This is where immersive technologies and their strong involvement in the metaverse come into play. This has created a lot of hype over the past few months, thanks to the endless possibilities it offers. Companies such as Adidas, Nike, Burberry, Ikea, and Zara have already offered new experiences to their consumers in this digital world.
This is the most immersive method to date, and its applications include virtual dressing rooms, simulators of how furniture or accessories will look in our home, etc.
Dynamic pricing can be introduced by having better insight into demand and real-time information on stock levels to reduce food spoilage or wastage.
Adopting these types of smart labels allows prices to be updated for an entire shelf and across multiple stores on the fly, leaving behind the need to do this manually. In addition, they are easier to read and can display product information beyond price.
Predicting Demand with Machine Learning
One of the biggest challenges for retailers is to improve stock tacking. Now Artificial Intelligence solutions make it possible to monitor product turnover in real-time and analyze the purchasing situation.
Introducing AI makes it possible to react quickly to ensure the availability of goods of certain products depending on the parameters that trigger the purchase, such as the weather. A snowfall forecast should mean that we have products in stock according to these conditions.
User-Friendly Shopping and Payment Applications
In Europe alone, digital wallets have spread to more than 20,000 shops, and 31% of Europeans are expected to use the digital wallet on their mobile device. The retail sector’s future also lies in 2.0 shops with advisory staff and automated checkouts.
The front-end can now be separated from the back-end, enabling retailers to roll out new models and functionalities in their shops more quickly. Shoppers demand more choice in the checkout process and should be able to choose how they interact with the point of sale, from how they pay, to how they view information to how they locate the product.
Security and loss prevention
As more retailers use self-checkout technology, preventing losses and potential attacks are going to be crucial. Therefore, increasing the presence of computer vision can help reduce theft.
Enhanced video surveillance (EVS) cameras can be used to alert managers to suspicious behavior by visitors to a store. Using cameras, robots, or other AI-assisted technologies on them may be the smartest way to scale as labor costs rise and staffing shortages continue.
Automation of Processes
Implementing AI to automate operations is essential today, whether it’s for verifying identification when customers buy age-restricted items, reordering processes for low stock, recording serial numbers, or customizing product samples according to the customer… The possibilities are endless.
We can also apply it for marketing purposes, where customer data can be collected to encourage an increase in their purchases. This collection of information can be translated into data-backed campaigns that can be automated, such as communications or the launch of offers based on loyalty to our brand.
Chatbots and Voice Commerce
The latest breakthroughs in NLP (Natural Language Processing) have made it possible for voice assistants to become an excellent ally for retail. By 2025, the US is expected to have more than 77 million households with smart home devices, so there is great potential for the retail sector.
IoT devices can listen to the consumer’s voice and respond accordingly, helping customers find products and make purchases. Chatbots are a handy tool for answering questions online in real-time, saving much time in customer service.
The “beacon network” or BLE (Bluetooth Low Energy) applications allow brands and retailers to understand exactly where a customer is in the physical shop in order to offer them a personalized experience at all times.
Carrefour is an example of the implementation of this technology, on which they rely so that their communications are key for their customers when making a purchase. This improves the customer experience, as well as generating personalized offers and discounts according to the type of shopper. Retailers are able to study and understand their customers’ needs and interact with them thanks to innovative technological tools.
It’s one of the retail technology trends that is gaining momentum in all sectors, including retail. Consumers are placing more and more importance on the ethical values associated with a brand, and shopping is moving towards a greener trend.
Sustainable and disruptive technology facilitates the creation of a more balanced future without sacrificing efficiency or business growth. Migrating to a Cloud model, opting for digitalization to generate less waste, and improving processes using Computer Vision or Big Data to minimize costs and maximize production are just a few examples.
>> Download our ebook to become a profitable omnichannel retailer by predicting demand and offering a personalized customer experience in real-time.