This year, the retail industry faced changes unmatchable in magnitude due to the COVID-19 outbreak. Although retail has always been a melting pot of technological innovation, the pandemic in 2020 transformed consumer behavior in ways that are likely to grow beyond passing trends and carry on into 2021 and the following years.
Statistics reveal that the majority of customers actually intend to continue adhering to the newly developed shopping habits even after the pandemic. Depending on the country, between 69 and 92 percent of people report that they will either mix their pre-coronavirus behaviors with the new ones or switch completely.
As 2020 is nearing the end, businesses should consider the surge of digital transformation in retail and equip themselves to face 2021 with the right tools.
In this article, we’ll look at the most promising trends in retail technology that can help your enterprise prepare for the possibility of repeating lockdowns and come out on top when the pandemic blows over.
Online shopping and delivery
One of the latest trends in retail technology is enabling clients to shop remotely and receive goods without leaving their homes. In the conditions of the pandemic, online shopping is one of the most essential retail technology trends. Companies that develop and polish their web stores and delivery services are likely to win customer loyalty in 2021, as they offer a safe, fast, and incredibly convenient experience.
According to McKinsey’s report, between 15 and 50 percent of customers in the majority of countries claim that buying online will remain their preferred shopping method even after the pandemic.
Developing your own online store now is not only a promising investment but a practical necessity if you want your company to prosper.
Artificial intelligence to aid logistics
Retail tech powered by machine learning can help optimize the delivery sequence and other aspects of logistics. One vivid example of how you can use advanced retail technology to improve your supply chain is Amazon’s custom-developed AI software that enables the company to deliver goods to any location within one hour.
The company’s AI takes in the data about how many units of each item their customers are likely to buy and determines where the majority of these clients come from. The system accounts for all sizes, colors, and other applicable characteristics of each product. This kind of predictive analysis allows Amazon to stock the goods in warehouses closest to locations from which the respective orders are most likely to come.
The main benefits of incorporating AI into supply chain management include the following:
- Faster delivery with less resource waste. Customized AI systems can keep track of all delivery routes and adjust them dynamically as well as determine how many staff members are needed at each location.
- Optimal stocking with computer vision. Connecting video feed from warehouses to a system that uses computer vision can help determine how to stock the goods, and it’s also useful for leading staff members to the already packaged products to facilitate deliveries.
Virtual and augmented reality
Advances in retail technology in 2021 will help consumers get a complete shopping experience without venturing out to the store. Extended reality applications are already helping numerous retail businesses improve the engagement for their clients, and this trend is only likely to grow.
Companies like Specsavers and L’Oreal already use AR to help their customers select the most fitting glasses frames and make-up, respectively. Augmented reality applications allow users to see how each product would look on their faces, removing the necessity to guess the correct parameters or go to the store.
Although the future of retail is not fully online, adding virtual or augmented reality features into your digital marketplaces will increase customer satisfaction, cut the number of product returns, and boost sales.
The retail technology transformation has given rise to a new trend in shopping that includes providing live video consultations to customers. The idea is to allow people to receive the same experience of talking directly to the seller as they can get in the store.
Incorporating the possibility of video shopping into your business is beneficial because it helps retail customers obtain invaluable real-time information about any product. It also includes the impact a salesperson can have on a customer’s buying decisions that’s often unavailable during conventional browsing of online stores.
The retail industry is bursting with information that businesses can leverage. In 2020, big data is no longer merely a buzzword but a powerful tool to drive your forecasting, recommendations, and even product quality. Predictive analytics using big data in retail is so promising, experts estimate this market to increase from its 4.2 billion dollar value in 2019 to 13.3 billion in 2025.
Retailers can use predictive analytics in several main areas:
- Demand forecasting. Big data is an incredibly effective tool to predict how the demand for a particular item is likely to change. You can use this to figure out how many units of each product you need, what to launch onto the market next, and what will soon need a makeover.
- Product recommendations. Predictive analytics can help you understand each customer’s shopping behavior and generate personalized content and recommendations. This helps both improve your customer experience and increase loyalty by adding a personal touch to your campaign.
- Quality control. Big data can also help warn customers about potential dangers quickly in case something goes wrong. For instance, Costco once used the aggregated data to identify customers who bought foods with possible Listeria contamination and deliver thousands of warnings within just one day. Having a fast and efficient way to leverage customer data can help you make your services safer.
- Logistics. Using big data is useful to predict which stores need to be stocked with a particular kind of product.
Personalized customer recommendations
Customer experience will never be complete without personalization. As online retail has skyrocketed, so has the demand for advanced recommendation engines and other retail technology types for personalization. Personalized recommendations can make your clients feel welcome as well as provide them with useful insights, simultaneously driving your revenue up by 5-15 percent.
Recommendation engines take numerous factors into account, but most systems can be classified as a combination of content-based and collaborative recommendations.
- Content-based. These systems consider each customer’s previous purchases, as well as their browsing history on the site, product returns, and wishlist content. After analyzing this information, recommendation engines can provide suggestions on what products may be interesting to the client.
- Collaborative. This type is used in retail technology solutions more frequently, and it aims to find similarities within groups of customers. These recommendation systems identify patterns in users’ behavior and apply the resulting recommendations to each applicable member of the group.
Customer support chabots
Chatbots in retail businesses will be getting more and more sophisticated over the next few years. The whole industry of natural language processing (NLP) is predicted to grow beyond $43 billion by 2025, which amounts to a 3.5 times larger value than is presented this year.
Chatbots help retail organizations communicate with customers more effectively and suffer less resource waste. These systems can conduct a conversation that feels natural to a user, recommending items, helping make a purchasing decision, or solving a technical issue—all without any input from a human employee.
Chatbots can also gather customer data for analytics and identify the most promising consumers, subsequently redirecting them to your employees.
Automation to improve inventory control
Technology innovations in the retail industry stretch beyond software. In supply chain management (SCM), automated warehouses are well on their way to becoming the future of retail technology, optimizing processes and reducing costs, delivery times, and resources needed for production.
Incorporating the following elements into your infrastructure can significantly improve inventory control and aid your SCM:
- video feed from a warehouse, processed by a computer vision system to automatically classify all items;
- dynamic analytics of what you have in stock, eliminating the need for manual inventorization;
- AI-powered management systems to control the delivery of goods and subsequent home delivery to customers;
- pick-to-light technology that uses a smart lights system to guide employees to the location where the required product is.
In-store analytics tools
Technology in retail stores in 2021 should aim to gather and process customer data. Gaining insights from online consumer activity is a familiar practice, but you should expand it to your real-life stores if you want to stay on top.
Services like AdMobilize, ShopperTrak, and Dor already exist to help companies measure foot traffic and gather demographic information about consumers.
A custom-made system can be tailored to your particular needs and provide insights into your staffing situation, conversion rates, and visitor behavior.
Robotic store assistants
Retailers use robots more and more frequently to improve the functioning of the store. This retail and technology innovation helps with safe and efficient cleaning, transportation of goods, product tracking, customer assistance, and analytics.
Some examples include the following:
- Amazon Scout autonomously delivers products to consumers’ doors.
- LoweBot provides assistance to customers in stores, answering their questions, helping with navigation, leading them to the desired item, and so on. The robot also gathers customer visit data for further analytics.
- Millie finds and cleans various spills inside the store. The robot can also determine whether there is a safety hazard and alert the staff immediately.
Voice search and personal assistants
Voice search technology is one of the fast-growing retail technology solutions for 2021. Experts predict the number of voice assistants that people use to reach 8.4 billion in 2024.
Voice assistants like Siri, Alexa, and Microsoft’s Cortana make users’ everyday activities more pleasant and easy. A custom-made solution for your retail business can go further and help you enhance the customer experience, improve client engagement, and deliver news about fresh product releases, sales, and special offers in a human-friendly manner.
One of the most irreplaceable kinds of technology in the retail industry is digital wallets and contactless payment systems. Incorporating digital payment into your business will provide users with a fast, secure, and extremely convenient payment method.
Digital wallets help make purchases with just one click, as opposed to older online systems that require users to input credit card details every time, conduct multi-step verification, and wait for the transaction to complete. Depending on the payment system, consumers can use the face recognition log-in method or Touch ID to make a purchase.
Geolocation marketing technology
Geolocation and proximity marketing is not the latest technology in the retail industry, but it will certainly be one of the fastest-growing in 2021.
This technology has the following primary functions:
- It helps retail organizations customize recommendations and content for consumers more accurately. Geolocation detection allows you to divide your clients into target groups by their current city and show them personalized promotions, products with special prices, and hot offers nearby.
- Proximity marketing with beacon technology can lead customers to particular items in your store, track the clients’ interest by detecting which aisles they surveyed, and offer personalized product recommendations.
Consumer purchasing behavior is one of the determining factors in how trends in retail are formed. In 2020, the coronavirus pandemic triggered a massive shift in how consumers shop, and many of the new tendencies will remain relevant even when life stabilizes again.
The most promising technology trends in retail for 2021 are centered around online shopping, automation of processes, and reducing the physical contact required. Still, while consumers enjoy having the ability to shop from home, the feeling of real communication is no less critical to clients. To prepare yourself for 2021, consider incorporating video shopping or augmented reality solutions into your online marketplaces.
Learning how technology is changing retail is the first step towards building your own successful marketplace. Eastern Peak has extensive expertise in developing solutions that implement the latest trends in retail and correspond to the exact needs of your company. Contact us today to get a free consultation and start enhancing your business.