In today’s retail sector landscape, new technologies are transforming how we shop and do business. AI-powered innovations such as hyper-personalization, demand forecasting and AR-enhanced shopping experiences, etc. are enhancing the customer experience and operational efficiency. So, it becomes a priority for all retailers to deploy these technology solutions in their daily operations and stay in line with the latest technology trends in retail.
Therefore in this blog, we will explore the latest technology trends reshaping the retail sector. Let’s start right away!
“If you want to satisfy everybody, you can only do it by having a longer outlook than the market has”.– Michael Burke, Chief Executive, Louis Vuitton
#1 AI In Shopping
AI is transforming various aspects of the retail industry from automating repetitive retail operations to increasing profits and optimizing business processes.
It helps inventory management by analyzing consumer spending patterns, thus helping forecast demand and inventory planning to ensure timely inventory replenishment and reduce excess stock.
Generative AI-powered chatbots help in supplier negotiations, automating store layout and planogram creation by using customer analytics and demand forecasting data sets. It also helps retailers in sending personalized messages and offers by analyzing customer behavior, increasing the chances of upselling and product recommendations through collaborative and content-based filtering.
According to a Deloitte report by 2025, 20% of the world’s top retailers will use advanced AI systems to improve sales, marketing, supply chains, and operations. Additionally, about 45% of marketing leaders plan to invest in Generative AI within the next 1-2 years.
#2 Social Commerce
Social commerce enables shopping via social media platforms. Consumers can purchase a variety of products without leaving their favorite social media channels like Instagram, Facebook, or TikTok. This trend uses social media influencers, user-generated content, as well as customized promotions to increase sales and improve brand interaction.
E.g. TikTok Shops garnered a whopping $11.09 billion in gross merchandise volume in 2023 which is a testament to the power of social commerce.
#3 Omnichannel Shopping Experiences
The retail sector is very competitive and the battle between enterprises to attract customers to their physical and e-commerce websites is very fierce. One effective strategy to integrate both these fronts is the omnichannel, or “phygital” strategy. By integrating in-store and online experiences, shopping gets more consistent and enterprises can offer more options to the users.
#4 Buy Online and Pick Up In-store (BOPIS)
Buy Online, Pick up In-store is an emerging retail concept that allows customers to shop online and then pick up their goods in-store. Products are Marketed and sold online, and customers can choose to pick up their orders at a nearby store at their convenience, including on the same day. This helps provide consumer convenience through flexibility and speed and also pushes traffic to physical stores benefitting both consumer and retailer.
Innovative Point of Sales Systems
Modern POS systems synchronize the real-time data across physical and online, giving a centralized view of inventory. This real-time synchronization helps in ensuring product availability and inventory tracking. These modern POS systems provide multiple payment options to the customers like “buy now, pay later”, OR code payments, and cryptocurrency, thus reducing the friction at the point of sale during final checkout.
#5 Augmented Reality in Retail
Augmented reality (AR) has significantly impacted the retail sector. Let’s look its some of the latest use-cases in retail.
Try-On Solutions
Try-On solutions such as virtual fitting rooms help shoppers check how apparel and accessories look on them and bridge the gap between digital and physical store experience. AR also powers home visualization of furniture and wallpaper.
E.g. IKEA Studios uses LiDar technology to display rooms, measurements, and windows, enhancing interior design visualization.
In-store AR experiences
In-Store AR
In-store, AR is useful in enhancing product experience and customer increasing engagement through barcodes or pop-up options while encouraging consumers to visit the stores for exclusive AR experiences.
Mixed Reality in Retail (AR/VR)
Augmented reality and virtual reality are revolutionizing the retail industry. These virtual try-on technologies such as Kohl’s AR Virtual Closet, which is available on Snapchat, enable consumers to try on products virtually. Future trends like gamified social experiences and virtual closets are built on this tech only.
Mix reality tech can help showcase products and could be used to present products in digital fashion shows. While still in their infancy, particularly in terms of mainstream adaptation and implementation, AR and VR have the potential to enhance current retail accessibility and immersion over the next five years.
#6 Demand Forecasting In Retail
Demand forecasting was a much-needed and sought-after innovation in the retail industry due to its multiple benefits across the operations chain. Let’s look at a few:
- Inventory optimization: Keeping inventory fully stocked for high product demand situations to ensure customer fulfillment.
- Cost saving: Predicts how much inventory is required to fulfill upcoming demand, thus helping reduce any wastage.
- Revenue: By predicting periods of low demand and revenue, retailers can up their marketing efforts to attract more customers.
- Sustainability: Forecasting helps in reducing wastage, as fewer products go unsold.
- Competitive advantage: Forecasting the market trends based on consumer behavior data, provides a competitive advantage against competitors.
Demand forecasting models can be built using data sets about consumer behavior patterns, demand and supply, price action, and market trends. AI can analyze massive datasets and provide precise predictions and suggestions to retailers and if allowed can also take appropriate decisions as well to ensure a smooth operation.
Hyper-Personalization
Earlier technologies enabling personalization had too many data-privacy concerns attached to them but recent advanced technologies such as sentiment analysis, AI, machine analysis, and NLP are enabling true hyper personalization in 2024. These technologies can analyze vast amounts of raw customer data from their in-store and online activity, social media interactions, and other touchpoints to help retailers better understand the consumer’s needs, concerns, and buying stages.
“33% of GenZ says social media has significantly affected their product purchase decision.”
Retailers can use this data to send hyper-personalized and targeted messaging and ads. This personalization can extend to multiple touchpoints from prompting a customer to a make a purchase to the final payment. This personalization strategy helps increase average order value and customer lifetime value and builds long-term customer relationships.
Diversifying Customer Experience
Earlier people used to go to supermarkets extensively browsing through shelves before making the purchase. But buying behavior has completely changed these days of both millennials and Gen Z influenced mostly by social media and online influencers. Not only have shopping habits become more flexible across the board, but conventional shopping such as for groceries has also shifted to an omnichannel model.
Resurgence of the Store Experience
Despite predictions of the decline of retail stores data shows that there is a renewed and increasing relevancy of the store space. Retailers know that selling is not the only thing that needs to be done but they have to create unique in-store experiences as well which will act as a crowd puller.
Assortment and Fulfillment Strategies
Due to stiff competition in the market, retailers are expanding their product portfolios where they sell a variety of products to meet the varying needs of their target market. This is a shift in time where customers expect to have their items delivered as soon as possible and basic delivery is free. ‘Order online, Pick up in store’ is becoming the new trend. The rapid delivery as a norm pioneered by Amazon and the shift of people’s expectations to receive their ordered products within three days at most is currently shaping the new standard.
Marketplaces
Retailing has shifted from the mere sale of products to consumers, to access to consumers, data, and insights. Supermarket chains have started embracing third-party marketplaces as they allow them to try new products and ranges without higher risk.
#7 Autonomous Delivery and Robotics
Organized Retail is now shifting to robotics and self-automated delivery systems for fulfillment and logistics. Drone delivery and delivery robots are some of the technologies that improve supply chain efficiency, and minimize labor costs. Such technologies are now becoming important in retail for increased efficiency and to cater to the demand that is increasing for the delivery of consumer goods and services.
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Conclusion
So, In today’s competitive space if a retailer wants to stay relevant it becomes very vital for them to embrace innovative technologies to enhance customer experience and optimize operations because the future of retail lies in the seamless integration of AI, AR, omnichannel presence, and hyper-personalization strategies.
In this blog, you will find the latest technology transforming the retail industry. We’ve explored the impact of AI on the shopping experience, the omnichannel retail model, the perks of BOPIS, AR augmenting the shopping experience, demand forecasting, and how hyper-personalization can change the face of retail. Some of these technologies are enhancing the future of retail in a way that is more effective, efficient, and more focused on consumer needs.