Leveraging tech innovations is the key to success in 21st century retail
- The impact of automation and AI on the retail sector is undeniable
- RoT: Retail of Things
- New ways to pay
- Augmented reality: ‘try before you buy’
- Omnichannel: there’s no one-way street in retail
- 3D printing: this emerging technology is making its way into retail in a big way
Perhaps no sector has experienced technological disruption as profoundly as retail. The advent of online shopping, the ubiquity of social media, and increasing customer demands are forcing change, and the future of retail must embrace technology as never before.
The impact of automation and AI on the retail sector is undeniable
Because technology can improve the efficiency of the supply chain, decrease lead times, and predict demand, it’s becoming an essential component of tomorrow’s retail. For instance, in 2016, Target started employing autonomous robots in one of its biggest distribution centres in California, signaling the future of retail automation. Designed by Symbotic, the bots use ledges to move through aisles, stacking and moving products with speed and precision. They use software to track each case, knowing exactly where every item is at all times, enabling rapid and accurate picking to complete an order.
Not having an item that a customer wants is a retailer’s worst nightmare. But with the help of artificial intelligence (AI), this problem need never happen. AI offers not only incredible possibilities for managing inventory, but also the ability to leverage predictive analytics, anticipating the needs of customers. In the future, AI is expected to erase security concerns when it comes to online shopping. Using past customer behaviour to prevent fraud, and employing chatbots can further strengthen the relationship between customers and retailers.
RoT: Retail of Things
For retailers, the IoT is a new field of innovative possibility. Strategically placed sensors can gather information about customers and then send personalised offers to their smartphones at the point of sale, beacons can engage new and existing customers, while RFID tags can make inventory super-efficient. The Milwaukee-based startup Scanalytics, for instance, developed floor sensors to help retailers track customers’ movements. Scanalytics’ paper-thin sensors can count how many customers have entered the store, or how much time they spent at a specific aisle. Such data helps retailers make better-informed decisions.
And to ensure that stocked items are easy to locate, many retailers are already using RFID tags to manage inventory. RFID can collect and send real-time data about inventory to the retailer, including its exact GPS location, letting stock managers know when shelves need to be resupplied.
IoT sensors can also be used to monitor the refrigeration units needed to transport and store food, tracking the temperature, measuring how long food has been warming, and analysing how quickly it needs to be cooled before it spoils. And by integrating this data, each refrigerator can be automatically set at the temperature needed for its contents, automatically shutting down when empty.
New ways to pay
Retail’s demographic future over the next decade is clear, and millennials are reshaping the retail landscape. But the most forward-thinking are already preparing for the arrival of a new cohort of customers — Generation Z. Generation Z and millennials are interested in payment options beyond the traditional credit card, and it’s past time for retailers to consider alternatives.
One promising option are microchip implants. For instance, SJ Rail, a Swedish rail operator, claims “that up to 100 of its customers are embedding microchip implants into their hands to pay for their journey”. And Peter Dahlqvist, the head of SJ Business Sales, is very enthusiastic about the project, too. “The microchip ticket is a good example of how we are happy to try out new ideas alongside customers and help to force the pace of digital development,” he says. There’s no doubt that we’ll see more of this technology as its ease and convenience become clear. According to the Financial Post, over 4,000 people in Sweden have already implanted chips into their bodies to pay for food, rail travel, or enter their offices. Clearly, Sweden is well on its way to becoming a cashless society. In fact, it’s been predicted that half of Swedish retailers will stop accepting cash before 2025.
Augmented reality: ‘try before you buy’
Today, for most users, the only way to use AR is through various photo and video filters provided by their smartphones. For retail brands and stores, however, this tech offers tremendous potential to refine customer experience. For instance, ModiFace, a facial recognition company, has become the leading provider of AR features for retailers. It’s already helped 84 beauty brands to introduce AR experiences, some of which are major names, such as Sephora, L’Oréal, Maybelline, and CoverGirl. “Beauty brands have seemingly had a realization: This is critical, and we have to have it,” says Parham Aarabi, ModiFace’s CEO. “There was an explosion in adoption and expectations in the past two years, and so we’ve been working to standardize this technology across the industry. It’s moving very quickly.”
This ‘try before you buy’ concept ensures that customers are satisfied with their purchases, and by increasing engagement, it lures potential buyers into trying new things as well.
Omnichannel: there’s no one-way street in retail
Increasingly, customers demand quick and high-quality service at a lower price, and to find the right retailers, they switch between online and brick-and-mortar stores. For retailers, meeting this demand means developing an effective omnichannel strategy into their work, combining both online and offline sales channels to improve the shopping experience. The omnichannel approach integrates different channels and devices to engage customers and provide them with a ‘seamless shopping experience’, whether online or in a conventional store.
For instance, Oasis, a UK-based fashion retailer, merged its brick-and-mortar stores, website, and mobile app into one seamless shopping journey. When customers walk into an Oasis store, they’re greeted by a sales associate with a tablet, who can provide them will all the product information they need. What’s more, the tablet also works as a point of sale terminal, which means you can finish your purchase from anywhere in the store. Last, but not least, if the items customers want are out of stock, the sales associate can make an online order and ship the items directly to your doorstep. Oasis also has a mobile app that further strengthens customer engagement.
3D printing: this emerging technology is making its way into retail in a big way
Although some retailers are still sceptical about 3D-printed products, the fashion industry is starting to recognise its immense potential. Iris Van Herpen, a Dutch fashion designer, showcased her extravagant 3D-printed collection at the 2018 Paris Fashion Week. And in 2019, she revealed her new collection, called Shift Souls. All of the pieces from the collection are defined by an algorithm and 3D-printed. As part of the collection, Van Herpen also created face jewellery, named Cellchemy, which was printed in partnership with the Delft University of Technology in the Netherlands.
Emerging technologies are disrupting the retail sector, improving customer experience, and helping retailers to gain a competitive edge. Thanks to technology, shopping is convenient and personalised to fit the needs of both current and future generations. While retail stores are being equipped with high-tech sensors, robots are taking over monotonous tasks. AI provides hyper-personalisation and immersive technologies such as AR allow us to try products in a virtual environment before purchase. Only by implementing and mastering these trends will retailers stay ahead of their competitors.