Digital technology is continuously revolutionizing the world of brick-and-mortar and online retail. Here, we’ll take a closer look at some of the key ways digitalization is transforming both the internal and customer-facing sides of the retail industry.
Back in 2011, Gartner predicted that by 2020, 85% of retail customer interactions would be facilitated by artificial intelligence.
While we can’t definitively say whether this prediction has become a reality, the fact is that AI certainly has impacted the way in which retail brands engage with their audiences.
For one thing, AI allows eCommerce companies to provide automated service and support to website visitors both proactively and on-demand. Whether we’re talking chatbots, dynamic content, or laser-specific product recommendations, we’re already in the midst of seeing what AI can do for the customer experience.
Internally, retailers are now using AI to assist with demand forecasting and to better optimize their approach to product storage, retrieval, and delivery. This allows warehouse and fulfillment teams to focus on completing the tasks at hand, knowing full well they’re doing so in the most logistically-sound manner possible.
Augmented and virtual reality technology continues to evolve in ways that enhance the in-store and online experience for the modern consumer.
Ikea, for example, has continually improved an AR-based app that allows customers to simulate furniture placement within their homes:
Source: Visualize before you buy!
From there, the customer can quickly navigate to the appropriate page on Ikea’s website to complete their purchase.
Taking things a step further, Macy’s has begun experimenting with VR technology within many of their brick-and-mortar locations. Here, customers can furnish a virtual room with selected items, then don a VR headset to see how it looks in “real” life.
In both cases, the customer is able to visualize a piece of furniture within their own home before buying it — making their purchasing decision just that much easier.
The advent of cloud computing has supercharged the modern retailer’s ability to collect, store, and access a variety of data from anywhere with an internet connection.
In turn, retailers can use this massive collection of data to quickly make informed business decisions regarding internal or customer-facing processes. More than just using this data to “back up” business decisions that have already been made, cloud technology allows teams to become more data-driven — meaning they can now base the decisions they make almost entirely on the vast amount of info they’ve collected over time.
From a logistical standpoint, cloud storage technology is typically cheaper, safer, and more secure than the traditional on-premise method of data storage. Overall, this translates to higher productivity levels for retailers across the board.
As cloud computing technology evolves, it will allow even cash-strapped startups to access and take action on large sets of data. In some ways, this may level the playing field a bit for growing startups that stay data-driven over time.
The Internet of Things (IoT) has brought us into an interconnected — and ever-connected — digital world. And this certainly applies to the retail world, too.
RFID technology, for example, has led to ultra-quick product location, both within warehouses and brick-and-mortar stores. In turn, this allows for faster delivery, more responsive customer service, and a more positive overall customer experience.
Beaconing is another IoT-related tactic that enables brick-and-mortar retailers to increase brand awareness and foot traffic by pinging local consumer’s smartphones as they walk by. As IoT, AI, and other emerging technology continues to evolve, we’ll likely see beaconing become more personalized and optimized for timing.
The more interconnected our various devices become with the world around us, the more ways retailers will have to provide a personalized and enjoyable experience to their customers.
Believe it or not, robotics — and actual robots — are currently being used in the world of retail in a variety of ways. AI-based chatbots are relatively common online already.
Now, we’re beginning to see this technology transfer over to the brick-and-mortar realm, with mobile robots being used to deliver navigational, promotional, and other such information to shoppers.
We’re also seeing businesses increasingly rely on robots to complete logistical or procedural tasks. For example, Levy Restaurants uses Flippy — a robotic chef — at its Dodger Stadium location to flip burgers, deep-fry French fries, and more.
With robots completing these more simple tasks and providing simple services, staff members will have more time and energy to dig into the more complex processes and pressing issues going on around them.
Ultimately, this will lead to more efficiency across the board.
Though not fully perfected yet, voice-assisted shopping technology is being adopted throughout the retail world in a number of ways. As things stand, consumers can use smart devices to:
Combined with the advancements being made in AI and the other technologies we’ve discussed, there’s little doubt that voice-assisted shopping will play a huge role in retail in the years to come.
Brick-and-mortar stores as we’ve known them over the past half-century are quickly becoming relics of the past. Emerging in their place is the retail store of the future — the smart store.
The idea is to use brick-and-mortar locations as more than just a place to sell goods. Rather, these locations are being used to enhance the overall customer experience.
Source: Nike recently launched Nike Live stores in California and Tokyo
Each location is full of innovative features related to athletics, sportswear, and fashion. For example, the “sneaker bar” above is a space for fashion-conscious consumers looking for just the right sneaker for their wardrobe.
As the above technology continues to evolve, we’ll likely see brands look for new and exciting ways to implement them into their smart store experience.
While cash and credit are still the go-to payment methods for today’s consumers, digital payments are quickly gaining ground.
This is especially true for digital commerce. As Statista points out, digital payments in the US increased by over 15% in 2019. What’s more, the amount of consumers using digital payments has increased by 6% since this time in 2018.
From Apple Pay and PayPal to WeChat Pay and more, we’re likely to see an increase in adoption of digital payment methods from both online and brick-and-mortar retailers. If it’s what the modern consumer wants — and it helps remove friction during payments — there’s little reason not to offer digital payments at your store.
The faster a retailer can fill orders, the more orders they can fill — and the happier their customers will be.
For this reason, retailers are looking to use technology however possible to streamline receiving, storing, and delivering their products. In fact, Alibaba has already created a warehouse system in which robots take care of up to 70% of the work to be done.
(Again, we have RFID, AI, and other such technology to thank for this.)
Regarding fulfillment, improvements in GPS tracking have enabled delivery teams to identify the optimal routes to take at any given moment. What’s more, companies have begun experimenting with drone and unmanned vehicle systems for “last-mile” deliveries.
Blockchain technology is used to create permanent, transparent, and highly-secure records of transactions in a variety of industries.
Needless to say, there are a number of ways in which retail companies can take advantage of this technology.
Inventory management, for example, becomes more automated, reliable, and comprehensive via blockchain. This allows teams to keep track of their inventory levels, as well as the location of their products, with relative ease — while all but eliminating input errors along the way.
Similarly, transactional and other accounting-related records will be kept just as clean and secure through the implementation of blockchain technology. This will minimize discrepancies between records being kept by various parties (i.e., the retailer, the customer, suppliers, and more).
All in all, it’s pretty clear that digitalization and other technological advancements are transforming the world of retail as we know it.
Still, we hesitate to say that technology is “taking over.” Reason being, we believe there should always be a human element to the experience you provide your retail customers.
Yes, in many cases, your customers will be able to complete entire purchases without ever actively engaging with an actual representative of your team. But, neglecting to provide this more human-to-human experience entirely will lead to major problems for your company at some point down the line.
The emerging technology we’ve discussed can certainly allow you to provide an enhanced, even futuristic, experience to your customers that helps set you apart in your industry. But, if the human element is absent from your in-store or on-site experience completely, your use of technology can end up doing more harm than good.