Digital transformation has revamped the existence of every industry unimaginably. Technological disruption has intensified completion, changed business models and eliminated geographical barriers. The retail industry has witnessed unprecedented changes due to retail technologies evolution.
The rapid rise of e-commerce giants such as Amazon and Alibaba and the paradigm shift in consumer preferences have compelled traditional retailers to rethink their strategies and explore new forms of consumer engagement. The revolution took off with the advent of the iPhone app development and smartphones.
Retailers are now using immersive experiences, often blurring boundaries between online and offline worlds. The stakes are high, and it is all about convenience, personalization and flexibility. There is no denying that the mandate is clear to either change or be left out in the highly competitive world.
A major transition for established brick-and-mortar retailers is eminent. The evolution has resulted in digital transformation from warehouse, inventory, and logistics to supply chain management at every business level. Retail software solutions are available for each and every function.
What does Retail mean?
Retail is included in the global economic sector which defines the part or department which is in the charge of providing any kind of services and goods to consumers. The most popular sectors of retail are stores, shops, markets, and supermarkets that directly deal with the final consumers. The retail industry is directly linked with trades, local and global rates of consumption, companies and suppliers, products and qualities, and consumers. The differences with other sectors that make the retail sector special are directly impacted by the ongoing trends and customer’s response to the trends whether it is in technical terms or global trade market.
Retail Apocalypse: Is it real?
This year alone, major global retailers such as Bon-Ton department stores and Toys R Us permanently closed, while J.C. Penney, Sears and Macy are announced major store closures. The growing eCommerce industry is making it challenging for brick-and-mortar stores to stay relevant
Store closures and job losses in retail continue to dominate the news. Several reasons have contributed to the closure of retail stores such as rising costs, technological disruption and changing consumer behaviour. The UK high street also continues to undergo a considerable structural change.
According to recent research, customers are looking for a more personalized experience and excellence in the retail sector in the past few years. In the post-pandemic era, their habits of shopping and buying have mostly shifted towards the e-commerce section and omnichannel shopping because of the convenience, those all have been escalating since the digital transformation already. These changes are rapid and significant and have been influencing the shopping habits of people so retailers now need to concentrate on the demands as well as the manners of the services they are providing. The best way to make the consumers comfortable and provide them with more convenience is to be a part of global digitalization and adopt the latest trends, may it be updating themselves with the simplest payment method or introducing more automated processes in the shop stores.
There are numerous examples of innovation happening within the store and retailers are now investing in customer experience to provide a better, omnichannel customer experience.
The retail industry is dynamically changing to emerging technologies and trends. The key to surviving in this industry is to adapt to changing customer preferences and demands with the help of Retail IT Solutions and new technology in the retail industry.
The Major Stats and Numbers of the Retail Industry
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UK Retail Industry Challenges
- Consumer Spending
- UK High Street
- Online Shopping
Retail Technologies Trends that will Define Future for The Industry
From facial recognition to biometric checkout, smart sensors tracking customer movements in the store—technology is redefining retail software solutions and how retailers function with optimum efficiency.
1. Rise of Mobile Applications
The usage of smartphones is increasing rapidly, which leads mobile applications into the trend. Due to the high adoption of mobility solutions, retail-based apps have taken over the industry. It helps retailers increase reach, build loyalty, and improve efficiency by providing multiple purchasing options and hassle-free services.
The primary reason that attracts retailers towards mobile application development service is that it allows to run businesses 24*7. Apart from this, retailers can also save infrastructure costs and offer the next generation shopping experience to their customers.
The development of mobile applications has grown as a response to the pandemic even further where customers need not physically visit the stores to shop items they need. Furthermore, the mobile app developers have ensured a smooth and hassle-free shopping process for the customers by making the apps simpler. Thus, the customers need not have great technological knowledge for using these apps. They can figure out their actions once they install and start using these apps. Such apps have increased customer satisfaction and increased the total number of customers visiting a retail app, thereby increasing the sales of the retail company.
2. Social Shopping
With social media platforms, it is easier to target the right and wider audience. Social networking sites help spread product information more effectively by encouraging users to like, share, and discuss in the comment section. It is considered a powerful and effective marketing strategy for E-commerce as social media platforms can engage users.
Most retail companies have tried using big data to monitor the activities of their target customers. They have done this through tracking activities across different social media sites followed by suggesting similar items that can attract the customers. Various companies have also shifted to creating social media pages instead of mobile apps or websites. This has helped the customer directly view the products on their pages instead of using a different platform to purchase them. Most social media pages have options to place the order or a link to direct you to their official business page where you can purchase the items of your choice.
Benefits of social shopping
- Improved customer engagement.
- Consistent audience growth.
- Increase in average order value.
- Higher search engine ranking.
- Improved customer insights.
3. Extended Reality
Extended Reality comprises enhanced digital and physical experiences combining augmented reality (AR), virtual reality (VR), and mixed reality (MR). It will greatly change shopping preferences and change the interaction between the company and its brands.
Benefits of Extended Reality
- Reduce costs
- Increase revenue and productivity
- Improve customer experience
How it works
Extended reality provides customers with the option to navigate through different products and virtually try products using a mobile application. It also gives customers the option to share their experience with other users.
Extended reality is especially gaining traction in the new normal, avoiding touchpoints during shopping due to COVID-19 social distancing restrictions. It limits the need for touching items that the customer might not end up buying.
4. Recommendation Engines
Recommendation engines have become a popular solution for online retailers looking to suggest products to users. These tools filter out information of lesser relevance to predict the likeliness of a user purchasing an item and suggesting those products or services to the user. This technology can play a vital role in building an omnichannel experience for the user right from researching a product online to purchasing in store. Recommendation engines work better based on the availability of data.
- Higher cart sales and improved customer satisfaction thanks to recommendation automation.
- Providing highly contextual user experience.
- Drive high conversion rate by giving personalized product recommendations.
5. Order Fulfilment Automation
Order fulfilment automation integrated with your existing systems can forecast future inventory needs, as well as enhance inventory replenishment best practices. These innovative retail technologies are ideal for small and mid-sized distributors, suppliers, and online retailers. It centralizes and automates fulfilment operations, especially with orders converging from different sales channels. Order fulfilment solutions process orders, reducing processing time.
Benefits of Order Fulfillment
- Real-time inventory control
- Advanced purchasing based on trends
- Warehouse management
- Easily track an unlimited number of products
- Prioritize orders based on the customer needs, inventory needed, and seasonal peaks
- Reduced fulfilment times resulting in unexpected cost savings
6. Facial Recognition
Facial recognition is fast becoming an integral part of the retail industry. This path-breaking technology is helping retailers overcome the problem of shrinkage, as well as personalize online shopping experience back to the brick-and-mortar stores. Retailers can use facial recognition to analyze the behavioural patterns of customers while shopping at their retail stores. It allows them to understand what customers feel and how they behave and act while in their stores.
- Improving customer experience by providing a real-time customer experience
- Combat returns fraud based on its mode of operation
- Understand your customers better
- Integrate with other loyalty software, CRM and cash register for increased sales
- Know your customers better and purchasing behaviour, as well as patterns
7. Inventory Management
Inventory management solutions are improving inventory control and real-time tracking of stock, giving the retailer a holistic view of product availability in-store.
Benefits of Inventory Management
- Effective management of stock-flow and predictions
- Improve forecasting to improve the retailer’s bottom line
- Integrate sales and inventory data to decide reordering and promotion strategy
- Review data and place orders to avoid stock outages
- Prioritize purchases based on an item’s profitability and popularity
- Determine dead stock such as damaged items, incorrect deliveries and unusable seasonal items.
8. Internet of Things
With over billions of connected products like home speakers, TVs, entertainment systems and cars to the Internet, retailers can collect voluminous data and actionable insights about customers’ product usage and preferences. This will allow targeted marketing to customers throughout every phase of the buyer journey. “Connected devices will be 3x the global population by 2023” By- Cisco
It’s clear that The Internet of Things makes shopping faster, cheaper, and hassle-free. Furthermore, Internet of Things has helped in carrying out smooth and successful business operations, Starting from managing and monitoring your stocks to inspecting the performance of your fleet, IoT helps you accomplish a lot of tasks. Suppose you want to check your driver’s route or his average speed. Or, you want to the total quantity of perishable items in your warehouse and their total cost. You can do all this with the help of IoT. Thus, IoT not only helps in enhancing customer satisfaction, but also ensures a proper maintenance and regulation of your business.
9. Artificial Intelligence
Artificial intelligence is all set to change the outlook of the retail industry completely. The most likely technology to reshape the retail landscape is artificial intelligence (AI), driven by data from customers themselves. Analysis of “heat maps” provides details of customers’ movements in a particular section and which items they look. This information can be captured by LIDAR sensors. Similarly, virtual assistants and robots inside the store help make a recommendation to customers that add value to the customers.
AI like Siri, Cortana and Alexa are completely revamping consumers’ daily shopping experience. From manufacturing, distribution to delivery, AI will play a crucial role in the retail world.
Artificial intelligence is all poised to change the way payment is done. Chatbots deployed by payment companies are now providing an innovative way to check balances and make payments.
There are many benefits of implementing AI technology in the retail industry
- Reduction in expenses.
- Customer service.
- In-store assistance.
- Price formulation.
- Price projection.
- Supply chain management.
- Visual search.
10. Augmented Reality
Augmented Reality is also a potent tool that stores are increasingly using. Augmented reality (AR) is expected to get even more sophisticated in 2021 with Apple and Google moving AR into the iOS and Android operating system. The adoption and implementation of AR technology will undoubtedly witness an increase. As AR technology matures, more retailers will explore ways to use it. For instance, retailers have produced demos of AR in the changing room to great effect. One of the most successful case studies of AR app development is IKEA. The app used Apple’s ARKit to preview how different IKEA products would look in the actual environment. It was simple, just scan the floor using the iPhone and select the product that needed to be placed.
The narrative surrounding retail is not limited to just sales in the present world, it has changed a lot and it emphasizes more on the customer experience. Customers in the present time are not attracted just by high-quality products but also retail experiences that evoke a good feeling in them. The rise of technologies like augmented reality and virtual reality has made it possible to provide customers with offline experiences in online shopping. The metaverse has now become a buzzword and experts predict that soon customers can visit and check the stores all while sitting in the comfort of their homes.
Take advantage of our best AR app development services for your next project.
11. Big Data Analytics
Big data analytics continues to mature. It is helping in strategic decision making. Progressive retailers are exploring new ways to leverage big data analytics to enhance different business aspects from sales, marketing, and customer service to retail operations. Retailers have adequate tools and data sources. It is just a matter of using big data tools and technologies in the best possible manner. Big data analytics can help retailers forecast demand, customize shopper experience and streamline the supply chain.
When used effectively, big data services and technologies can create a 360-degree view of customer experience across digital and in-store channels. Big data will only work if you are willing to make drastic and significant changes to your business.
As retailers struggle to do more with less in a margin-squeezed environment, the potential for Blockchain to reduce operating costs is one of its principal attractions. Blockchain can reinvent essential business functions, bringing trust and security in retail functions spanning across supply chain management, accounting and audit, and related account management processes.
13. Robotics and store assistants
Robotics and store assistants are transforming the retail space by enhancing the comforts of both the customers and retailers. These devices can help the customers to search for their products at the store. For any other queries, they can guide the customers to the nearest staff. This will help the customers to get their products quickly without spending much time. On the other hand, the store owners can use robotics and store assistants for different activities – checking stock prices, identifying pricing errors, and locating misplaced products. This retail technology can also be used in logistics and supply chain ensuring the maintenance of stocks. By introducing automation in retail businesses, technology has helped in enhancing operational efficiency.
14. Cashier-less stores
Contactless services are in demand in today’s world. The covid 19 pandemic has increased the demand for cashier-less stores which are gaining immense popularity amongst the customers also. These cashier-less stores are attracting a lot of customers – mostly the health-conscious ones. The cashier-less stores can scan the items purchased by customers automatically and also receive the payment directly through cards. Implementing this technology helps the store staff to ensure the swift movement of the customers. It also helps the retailers to reduce their operational costs and save money. This technology is gaining its grip in the market for increasing productivity.
15. QR codes
QR code is one of the most successful innovations of science that is helping in the growth of many sectors. The implementation of QR codes in retail businesses has not only reduced the operational costs of the owners but also enhanced the comfort level of customers. Now the retail owners do not need to publish costly printed marketing materials, a simple QR code contains all the needed information related to the product. A consumer can know everything related to the product simply by scanning the QR codes. The QR codes come in different forms – text, pdf, and coupons, thus keeping a wide range of options to communicate with the customers. The QR codes can also be used to share website links to the audience which also helps in increasing traffic as well as sales.
16. Buy Online Pick Up In-store (BOPIS)
This option has emerged as a convenient and reasonable shopping option for the customers and is in trend in the retail industry. This option allows the customers to order the product online and pick it up right from the store themselves. With this option, the consumers can select their products anytime as per their convenience and collect them from the stores. This helps in saving money taken for delivery besides providing the same-day pick-up options.
The retail industry is abuzz with modern technology and the implementation of perpetual inventions has helped in the growth of this sector.
Related Post: Emerging Technology used in the Retail Industry
Payment Trends in New Retail Technology to Watch Out
Smartphone “wallet” apps will emerge as a new way to pay– a trend that’s being driven by “lifestyle” apps such as Alipay and WeChat.
Easy check-out options
Most retail firms with an online app or page aims at easy check out options. This makes their site less complicated and ensures the customers can buy whatever they want to at any time of the day. Hence most mobile apps and sites have developed both the ‘shopping cart’ and the ‘wishlist’. The customers who view products but are not willing to buy them immediately can put them into the wishlist while the ones who want to can add it to their cart and check out directly. You can also track your delivery as soon as you place the order.
Biometric payments (fingerprint or iris scans) will be used to authenticate payments, replacing cash shortly. A report predicts a trillion biometric payments will be made annually by 2022. Biometric payments are one of the most important and revolutionary discovery of technological advancement. With the high rate of technological advancement and the subsequent development of new apps, there has been a steep increase in the rate of cyber crimes. Since biometric payments are made only through your facial or biometric recognition, the chances of data breach or leakage of your financial details is impossible. While on the one hand, these payments are easier to make, they are also safer than other modes of online and card transactions. However, such a technology is yet to be fully adapted by the retail sector.
Voice-activated payments driven by digital assistants such as Amazon’s Alexa will become more commonplace, with finance companies already pursuing the technology. Around 28% of people use smart speakers for sending money or making direct payments. The portion of customers using voice-activated assistants is not huge due to security reasons. Even after this, the future of smart speakers and voice-activated assistants looks promising as big companies like Apple, Google, and Amazon are investing to build secured advanced speakers. The stats also indicate a bright future for smart speaker payments in future.
Cryptocurrencies and Blockchain might not replace conventional payment systems any time soon, but several banks are exploring Blockchain’s ability to authenticate transactions.
Contactless payments have become one of the most preferred payment methods. As the name suggests, contactless payments allow the customers to simply wave their mobiles across the reader. This method is way faster and more convenient than inserting a card. Many companies like Samsung, Amazon, Google, and Apple have their payment system. The customers need to simply download the app, register with their details, and wave their phone across any reader. Contactless payments are made possible by NFC technology. UK finance has also predicted that 36% of total payments will be made through NFC-powered contactless payments by the year 2027.
The dominance of mobile wallets
Digital payments are the future. Retail companies are successfully using digital payment technologies to give comfort and the best payment services to their customers. In the present time, mobile wallet solutions are dominating. This is nothing but an application that tries to mimic a physical wallet. With the help of this mobile wallet application, customers can store money in their mobile wallet and easily make their payments.
Data Analysis for Management, In Terms of Safety and Cost:
As the retail sector revolves around operations, it also includes cleaning, reconfiguring the layouts, etc., for the safety of the consumers and their employees. Data analysis can be used for maximizing the overall value and managing the stores or documenting the safety measures in the stores. The right analysis will help to get a 360-degree view of the consumers and the current path to optimize the right business decisions. Unconstructed data can lead to the exact opposite though.
Using Automation processes for most of the operations:
Often retail stores get in trouble regarding selling age-restricted products to young ones or reordering processes or stocking and restocking, customizing, etc. AI can help to verify the identification of consumers when they are buying age-restricted items such as alcohol or tobacco, or customizing the products. With artificial intelligence, retail stores can explore endless possibilities to enhance the shopping experience for the customers so that they get more encouraged and increase their purchases. The customer data collected during their shopping can be translated into campaigns for future sales which would be data-backed and automated. This way, the human effort and time can be reduced and it would also be very customized.
Bluetooth Low Energy (BLE) Applications and Implementations
Bluetooth Low Energy Applications are also called the Beacon Network, it is a brand new implementation of digital advancement. The Beacon Network allows retail stores and renowned brands to understand the location of a particular customer in their physical outlets and stores so that they can provide the customer with a customized and personalized in-store shopping experience. As communication is the key to the success of every retail store, retailers need to rely on these kinds of technologically advanced tools, it would help them to improve the shopping experiences of all customers and provide them discounts and personalized offers according to the previous purchase record and the shopping type of the customer.
Artificial Intelligence and Demand Forecasting
Some largest brands all over the world are already using this powerful tool to enhance the shopping experience of their customers. Demand forecasting is powered by machine learning which can be applied to improve the current status of inventory management, inventory planning, relationship management, manufacturing, marketing, logistics, etc. to deal with the high demand of the market and obviously during panic-buying just what the consumers did during a pandemic. Demand forecasting leads the retail sector to have more sustainable production, supply, and consumption. Amazon has put an example of leveraging the power of artificial intelligence and machine learning for this purpose.
Indoor Positioning System (IPS):
IPS or Indoor Positioning Systems help the consumers to navigate while being at the store as in most cases GPS is not available in the retail stores or they are not accurate enough. Indoor Positioning System has been used by Target and Lowes retail stores to enhance customers’ shopping experiences. Retail stores can build an app for smartphone users so that they can access the indoor map of the store to see their locations and the locations of the item they need from that particular store. This system has at least three basic yet essential benefits for the store: Item tracking and stock tracking, customer traffic tracking within the store outlet, and targeted suggestions for the customers depending on their shopping preferences.
Customer Behaviour Analysis: Through Artificial Intelligence
Analysis of indoor customer traffic tracking can also lead to customer behavior analysis. Customers’ spending habits, their interest in specific types of products, their demographics, everything can be analyzed through this. This would give the retail sector a better idea of dealing with or stocking specific types of products at a specific time or season for a specific genre or crowd. This idea can also be used in e-commerce, by tracking and analyzing the user’s behavior while they are in an online store, on which items they are clicking or seeing the descriptions, etc.
Successful retailers are continuously creating unparalleled, immersive customer-centric experiences in-store, enabling brick and mortar to compete with the convenience and variety of online shopping. Winning means taking the strengths of each and creating the best of both worlds.
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