November 28, 2023
As the retail industry grows, it utilizes various retail technology trends to offer mind-blowing services that promote excellent customer experience.
Leveraging the capacities of technology trends helps retailers in physical (brick and mortar) shops and ecommerce stores to reach their goals faster, reduce employees' workload, offer impeccable services, and boost efficiency. In this blog post, we'll explore what retail technology means, the emerging technologies in retail, and the benefits of retail technology.
What is Retail Technology?
Retail technology, also retail tech, is the collection of digital tools and solutions retailers use to improve all business operations. Both offline and online retailing benefit from retail tech trends. Some challenges include distance barriers, differences in currencies, inability to access product information, manual inventory management, inefficient supply chain management, and manual order tracking.
Emerging Technologies in Retail
Many new technologies have emerged in retail as a result of the COVID-19 pandemic and have continued to grow as consumers have grown accustomed to a highly digital shopping experience. Below, we’ll examine some of the main trends:
1. Artificial Intelligence (AI)
The retail industry maximizes the power of AI to improve customer experience, service, engagement, and satisfaction during virtual shopping. AI helps retailers cater to their customer base through:
- Chatbots - Chatbots use AI and natural language processing (NLP) to communicate with your customers, offer support, and respond to queries whether you're available or not. Using chatbots lets you focus on more complex aspects of your retail business.
- Product recommendations - AI monitors your customers' search history and uses it to suggest new products to them. It analyzes the products customers interact with and buy to recommend other products they might love. For instance, if a customer often browses items in the kitchen appliance section on your ecommerce app, AI can use that information to recommend more kitchen gadgets and utensils to them. It also studies customers' buying patterns and uses them to make recommendations. This process increases conversion rates and profit.
- Demand prediction - AI can predict the demand rate for all your products. The predicted data helps you decide the exact quantity of products to stock. The technology greatly reduces lost revenue due to over or understocking.
- Price optimization - AI algorithms track different prices of products to guide you in adjusting your prices. The algorithms analyze market conditions, competitor prices, customer demands, and willingness to pay before determining your product prices. This helps you save time and money, optimize margins, and improve your bottom line.
Learn more about price optimization in our recent blog.
Automation acts as a beneficial solution to streamline manual and repetitive tasks in retail. When repetitive tasks are automated, your business can focus on high-value business activities, eliminate human errors, increase efficiency, and improve satisfaction. Shopify reveals that 66% of customers believe automation can improve their shopping experience. Automation in the retail industry includes;
- Delivery Logistics Management - Save time and money on delivery route planning and fleet logistics with automation.
- Enhanced Chatbots - As discussed above, chatbots use AI and natural language processing (NLP) to communicate with your customers, offer support, and respond to queries whether you're available or not. When enhanced with automation, chatbots can execute tasks based on customer queries like generating return labels or processing refunds to expedite the customer service process.
- Enterprise Resource Planning (ERP) Management - Your retail store can automate finance, supply chain, human resources, and procurement processes. As you automate these processes, you'll save costs and increase employee productivity.
- Inventory Management - An automated inventory software manages your stock independently. It automates inventory counts, backorders, and order invoicing. It can alert you about low stocks and send restocking orders to vendors. The software allows scalability, prevents stock level miscalculation, improves customer satisfaction, and provides visibility into real-time data.
- Sales analytics - Analytics provides you with a breakdown of customer data. The data can better help you understand customer behaviors, buying patterns, and is helpful in making sales decisions.
- Personalization - Retail technology enables stores to personalize shopping experiences for each customer. It uses real-time browsing and purchasing data to address customer's painpoints. Retail personalization increases conversion rates and sales, prevents cart abandonment, and improves customer loyalty.
- Mobile Technologies - The growth of mobile technology makes an immense contribution to retail development. With mobile devices, customers can interact with a retail store on the go. Some of the mobile technologies in retail include;
- QR codes - Shoppers can scan QR codes that can direct them to your ecommerce store. They can also scan QR codes to enter a competition, drop a review, or complete a survey. For in-store shoppers, you can add a code to shelves for scanning. The code can be scanned to continue their shopping experiences on your online store.
- Contactless payment - Mobile technology in retail allows you to make payments through point-of-sale (POS) terminals. Contactless payment is secure as it avoids physical contact, is encrypted, tokenized, and requires two-factor authentication.
- Mobile apps - The popularity of smartphones has given rise to retailers' use of mobile apps. Statistics show that 49% of mobile users compare the pricing of products or services on their smartphones. Mobile apps help retailers boost sales, increase revenue, improve customer engagement, and increase brand awareness. As a retailer, you can enjoy endless benefits of mobile apps when you partner with a skilled development team. This team can help you create custom mobile apps that can be integrated with other systems. They can also ensure the app is scalable, secure, efficient, and will meet your business needs.
- Augmented Reality (AR) - AR enables customers to try physical products digitally. Retailers in the fashion and makeup industry already use virtual fitting software and virtual try-on apps. Skeptical of whether a product will suit you or limited by distance, augmented reality can bring the product to you to try out before deciding to buy. Here are a few ways in which AR is used in retail:
- In-store navigation - You can easily find sections and products in large retail stores with AR tools. Once you've located the products digitally, you wouldn't stress or waste time when you visit the store physically.
- Product visualization - As discussed earlier, buyers can use AR tools to visualize how fitting an item will be. These could be clothing, shoes, makeup, or furniture.
- User-generated content (UGC) - Retailers are enabling their tools to support sharing content created with AR. Take Snapchat, for example. The app allows users to share pictures taken with Snapchat filters. This helps to promote the app. Likewise, UGC promotes brands that use AR for product visualization or testing.
- Post-purchase guidelines - Shoppers can still access further information about specific items after purchasing them. This information could be about maintenance, for example. A user might only need to scan a QR code to access this information.
Implementing AR in retail improves conversion rates, reduces product returns, improves customer engagement, boosts sales, delivers a contactless experience, and increases shareable content.
Benefits of Retail Technology
Retail tech benefits both your business and customers. Let’s examine just a few of the major benefits of adopting these emerging retail technology trends:
- Engaging Customer Experiences: Adopting retail technology helps you deliver excellent services to your customers, giving them a memorable experience as they interact with your business. Retail tech trends prevent delayed service offerings, optimize payment processes, and personalize services. All of these contribute to making happy and satisfied customers.
- Automated Operations: Retail technology automates every aspect of your business. It prevents the manual execution of tasks, payment processing, inventory and supply chain management, and customer data tracking. Automating these processes enhances productivity, fosters business compliance, saves costs, and drives efficiency.
- Increased Efficiency: Optimizing work processes improves efficiency for your business. It reduces the excess time and physical resources needed to meet your customers' needs.
- Reduced Operational Costs: With retail technology, you can reduce or eliminate certain costs associated with running a retail store. You don't have to hire many employees or overspend on inventory.
- Continuous Availability: The different retail technology solutions can function optimally round the clock as they don't break down like human employees. That way, they can attend to customers' needs and answer their queries anytime, no matter the timezone.
- Zero Errors: Unlike human errors that can disrupt the supply chain process or customer dissatisfaction, technology adoption in retail is precise and avoids errors. It automates repetitive tasks, making it easy for human teams to focus on more critical aspects of their jobs. The ability of retail tech solutions to be error-free makes them reliable for retailers and customers.
- Better Marketing: Retailers can access customer data and use them for marketing purposes. The data helps retail store owners to segment their audience and create targeted campaigns. This improves conversion rates and increases revenue.
How to Get Started with Retail Technologies
If you’re ready to get started with implementing new technologies as a part fo your retail brand, consider these following steps:
Begin by defining how far your retail store is from where it should be regarding tech capabilities. Then, identify the retail tech solutions needed to provide engaging customer experiences. Also, analyze the time, human resources, and money required to adopt the needed retail tech trend. Ensure to set adoption milestones considering the time and money your business has.
Be Open to Change
Modern-day business processes can seem strange despite the numerous benefits they offer. Your team members must be willing to embrace new retail tech trends and abandon old retail methods.
Employee training is crucial to positioning your team members' minds to welcome retail technology. Enlighten them on the benefits and how to use them effectively. Also, address the fears that may cause their reluctance to adopt the newly-introduced technologies in our business.
Test before Adopting
Retail technology is advantageous, but you must test it before its full adoption. Try different vendors' retail tech solutions before making deployment decisions. As you test these solutions, you'll identify how they benefit your retail store and areas needing improvement.
Set Key Performance Indicators (KPIs) and Implement
After you've tested these technologies and are ready to implement them, you should set KPIs. These KPIs can help you measure and track the impact of the retail technologies you implemented. Your findings can help you make data-informed decisions while running your retail business.
Kickstart your Retail Technology Journey
As a retail store owner, following the steps we highlighted can help you succeed when adopting any of the retail technology trends. If you need more expert advice on the right retail technology solutions to implement, book a call with us. We can also help you create custom mobile apps for your retail store.