Few verticals have undergone as massive a change as retail in the last couple of years. Driven by cutthroat competition and significant shifts in customer expectations, retail companies are striving to align themselves with the changing landscape, with IT playing a crucial role in their ability to achieve this.
To offer customers a shopping experience that is accessible, seamless, and engaging, retail IT leaders must devise revenue-focused strategies that, harness cutting-edge technology to address present and future needs of the business.
Here are three technology trends that IT leaders in the retail industry must adopt to create value for both their organizations and their customers.
These days customer experience is king. To ensure a richer, smoother shopping experience, retail IT leaders must be reduce any friction that might hinder a smooth transaction. That means delivering a seamless initial contact online or in-store, removing any issue related to adding products to a virtual or physical cart, and making checkout and payment processes intuitive and easy to complete.
To meet this need, leading retail CIOs are deploying innovative frictionless technology solutions that produce a no-queue grab-and-go experience. These solutions leverage the latest advances in IoT and weighing scale and camera technologies to minimize or even eliminate friction, as they can precisely track the items customers add to their baskets and bill them when they exit the store.
Brands such as Sam’s Club, 7-Eleven, Amazon, Wheelys 247, and Albertsons are already offering checkout-free shopping experience to customers.
As per RBR London’s Mobile Self-Scanning and Checkout-Free 2022 study, there has been a threefold increase in the number of stores leveraging checkout-free technology worldwide. From 250 such stores in 2021, the study forecasts the number to touch 12,000 by 2027.
With an increase in online shopping, there has also been a spike in identity theft and payment fraud. By deploying fraud-prevention solutions, retailers can steer clear of chargebacks. This helps build customer confidence and and further improves frictionless retail. The results of such a fast, efficient, frictionless, and cohesive customer journey are increased footfalls and higher earnings.
With fast-changing customer preferences and a rise in competition, retailers are increasingly turning to AI to help them solve complex problems and make faster decisions. From big fashion brands to staples and grocery stores, every retailer is looking to apply algorithms to improve the bottom line, especially in the areas of omnichannel retailing, demand forecasting, and predictive analytics.
By applying algorithms to better predict fluctuations and demands in the market, retailers are better positioned to solve one of the biggest challenges in retail — inventory management — by stocking the right products depending on the market situation.
For instance, Walmart’s AI solution Eden leverages machine learning to optimize inventory levels and predict demand across its stores. This has helped the company cut down out-of-stock episodes by as much as 30%, while reducing waste and overstocking.
By putting algorithms to work on big data collected from diverse sources, retailers can intelligently predict what customers will buy and in which order. Grocery stores, for instance, can plan their stock-ups based on weather conditions, customers’ buying patterns, and geolocation. And by better understanding customer buying habits through algorithmic analysis, they can optimize store layouts for improved navigation and increased sales, for example, stocking fresh vegetables upfront, followed by bread spreads, and then beer at the end.
Online retailers such as Alibaba and Amazon are well-known for exploiting algorithmic retail to provide their customers with recommendations in real-time, based on their browsing activity. They also send relevant emails, advertisements, and texts. Many retailers are also following suit.
Customers today want a complete understanding of a product before purchasing it. Immersive shopping meets these needs by building interactive experiences for customers, thereby increasing their chances of making the purchase. Moreover, investing more time with a product increases their familiarity with your brand.
As a result, leading retail CIOs are utilizing technologies such as virtual reality, augmented reality, and machine learning to offer 3D visualizations, virtual showrooms, and AR mirrors for a more enriching and fulfilling shopping experience.
Realistic 3D visualizations provide a good idea of how a product would look like when viewed from different angles. This helps overcome customers’ fear that the actual product would look different from how it appears on the website.
Real estate and automobile companies are making use of virtual showrooms, which enable customers to view apartments and automobiles respectively from the comfort of their homes.
Retail outlets offering wearables such as watches, clothes, jewelry, or makeup are using augmented reality mirrors as a large number of customers want to try these products on before purchasing online.
As customers look for more engaging ways to shop, digital, experiential, and immersive environments will become imperative for retailers to adopt.
Digital Transformation, IT Leadership, Retail Industry