Jun 18 - 5min readBack to the Drawing Board: Digital Transformation in Shaping the Future of Retail in 2020By Jennifer Green
Digitisation Is the Answer
Tech is changing the way every industry does business by helping to save money, create efficiencies and provide better services and products. Retail businesses have recently jumped on the bandwagon and are also adopting tech to their advantage during the difficult times that COVID has brought to the retail sector.
The end-to-end customer journey now begins with online research and product comparison, and complaining about a product or service is as easy and public as sending a tweet or Facebook comment, prompting immediate action before reputational damage occurs. Where once businesses competed on price and availability, they now compete for search engine rankings and five-star customer reviews to keep ahead during this pandemic. This shift from in-store only to omnichannel spending has forced companies to make huge adjustments to the way they do business.
To make it through the pandemic, businesses are embracing digitisation more than ever before. Across all industries, specifically retail, increasing numbers of companies are adopting and perfecting digital tools to access consumers that lie just beyond reach in the comfort of their own homes.
Here are the top tech trends that we believe will transform the retail space in 2020:
VR and AR
Even when consumers purchase products online during the pandemic, they often go to a brick-and-mortar retailer to see the physical products first. But these in-person trips to the store are crumbling under the weight of quarantine orders. The retail industry obviously needs to “innovate or die” as COVID runs its course.
Virtual and augmented reality offer retailers several ways to enhance the customer experience. From browsing products to virtually “trying them on,” extended reality is already in use by many retailers today. Teen surf and sports clothing retailer Tilly’s offered its customers a back-to-school scavenger hunt experience that helped their customers explore different clothes and accessories.
Extended reality can also provide additional information for customers when they are browsing for products such as the “Living Wine Labels” from Treasury Wines Estates. The IKEA Place ARKit app helps you determine if the furniture you want to purchase will fit and look good in your space. In the future, extended reality will eventually enable consumers to be able to share their shopping experience with others.
Big Data (Predictive Analytics)
Retail organisations have never had an issue in the collection of large quantities of data. But, analysing the data to solve problems or create new solutions has been a struggle. Predictive analytics changes that. Retailers now can be proactive about the future, as the future of retail is on the rocks during this pandemic, by analysing consumer behaviour and trends from the past.
When retailers successfully analyse data, they can understand important information about consumer purchasing behaviour, personalise the shopping experience, address a consumer’s needs based on where they are in the customer journey, improve efficiencies and reduce costs of supply chains and more. Predictive analytics helps retailers be smarter, reduce costs and be more efficient overall.
When you think about how you use Google or your favourite search engine, you rely on finding what you need in the moment, whether that’s for the celebration or how to solve a problem. Retailers who can meet customers “in the moment” have a powerful advantage. Thanks to direct digital access to consumers and powerful analytics capabilities, businesses can capture moments and help customers during their moment of need and even anticipate what a customer might need before they even know it.
Another powerful tech tool for retailers is recommendation engines that help customers find things they never knew they needed and to help funnel options to a consumer at relevant times in their shopping journey. Recommendation engines get better over time. The more data the algorithms assess a customer’s shopping behaviour, the better the recommendations. Retailers can benefit from higher cart sales and improved customer satisfaction thanks to the ease of use. Spotify, Netflix and Amazon are the engines that you may be most familiar with.
Order Fulfilment Automation
By the end of 2025, more than 580,000 autonomous mobile robots (AMR) will be deployed to help warehouse fulfil customer orders. Many retailers are scrambling to adjust to the “Amazon Effect” and are exploring order fulfilment automation to try to increase the speed and flexibility of operations to complete with Amazon. This automation can significantly reduce order processing times. Warehouses have also struggled to find enough human labourers to keep up with demand, so automated systems would be an attractive solution for this.
Many of the most successful retailers have online and offline presences. Facial recognition tech assists retailers proactively battle retail crime and shoplifting. It can also bring the personalised online shopping experience to the brick-and-mortar location. When a customer is identified through facial recognition, the store staff can better respond to that customer’s unique needs. However, there are certain legal and privacy concerns to be worked out, but there are several advantages for retailers who adopted facial recognition tech.
Management of Stock
Automated warehouses help improve inventory control. Rather than wait for manual inventories, smart robotics and computer systems keep reliable stock data in real-time. This accurate data helps retailers manage stock flow, make solid predictions, smart decisions, and forecasting that help improve the store’s bottom line. Better inventory management of raw, in-process, and finished goods reduces waste, spoilage, and even theft.
Automated Store Assistants
Another tech trend that’s changing shopping is robotic store assistants. Pepper, an example of this robotic store assistants, can help shoppers find the merchandise they are looking for and answer questions. They can also email special coupons or special offers. Home improvement store Lowe’s has the Lowebot that helps with in-store customer service.
Chat Bots in Customer Service
There has been rapid adoption of messaging-based customer service bots across retail. Messaging has become the preferred customer service channel, so call volume will be reduced. Artificial Intelligence (AI) bots can improve the journey of the customer pre- and post-sales by lowering cart abandonment and help customers solve problems after the sale without the use of human intervention.
Smart Equipment and IoT
Smart equipment and the Internet of Things (IoT) will transform the shopping experience. Thanks to the large volumes of data that we have available and the ability to process it, consumers can receive a personalised shopping experience that was not possible before. Today’s consumers want experienced that include information and personalisation to help in making decisions. IoT technology helps stores deliver these experiences to these customers. Smart equipment such as sensor embedded shelves that track inventory will also change retail operations.
The bottom line is that digitisation is no longer optional. As society continually changes with new realities like quarantining, only the most innovative businesses are surviving. It’s crucial to think of ways to bring your customer to your products, even if your customer never leaves her home.
It’s also important to think of new ways to virtually bring your employees to work, conferences, and events. If you can find new ways to deliver value and convenience, all at a distance, you’ll likely thrive as a business operating in the era of COVID-19.