Hybrid shopping, innovative in-store experiences, and digital-first customer expectations significantly redefine digital transformation. The upheaval caused by the COVID-19 pandemic has flipped the industry, demanding tremendous technological advancements and innovations. Artificial intelligence and machine learning became critical in the retail world as demand for a seamless shopping experience and advanced personalization grew. Not only in e-commerce but also in physical retail, these tendencies are here to stay.
It’s important to understand where these advancements will lead us next by identifying consumer demand, trends, and innovative know-how that will guide us through this decade. The last two years have formed several tech trends that started to shape the retail industry’s future for years to come.
Let’s take a look at what technology developments will affect the retail sector in 2022 and beyond!
To enhance efficiency and responsiveness, retailers will continue to invest in artificial intelligence (AI) and machine learning (ML). In addition, companies will continue to emphasize the benefits of machine learning in sales funnel optimization and supply chain management.
Retailers will use ML to automate time-consuming inventory-related operations and procedures and reduce hazards such as inadequate resource planning. Furthermore, ML will empower retailers to become more time and cost-efficient while providing a high-quality service to end clients, thanks to real-time and predictive resource analysis.
The way retailers and suppliers work is changing because of machine learning technologies in the supply chain. ML is a kind of artificial intelligence that uses data to train a computer model so that it can adapt to changing situations without having to be taught to do so. In this way, the system may change its ways and enhance the consistency of its own algorithms over time. The supply chain services a variety of ML approaches such as inventory management, Warehouse management, transport and logistic, production, chatbots, and customer services. According to Gartner, cognitive algorithms and AI approaches will be incorporated or augmented in 25% of all supply chain technology solutions by 2023.
DHL, one of the world’s leading logistic companies describes ML and its fundamental components as complementary delivering insights which were previously inaccessible into enhancing supply chain management effectiveness. DHL has implemented ML, which has proven to be a very powerful technology that constantly strives to uncover important aspects most impacting supply chain performance by combining the strengths of unsupervised learning, supervised learning, and reinforcement learning. Each of the endpoints in the taxonomy (methodology) is completely generated from algorithm-based reasoning, ensuring that algorithms scale throughout a worldwide organization.
The retail industry's Location Intelligence (LI) solutions have been soaring off the market. The implementation of LI for retail has been increased by the growing use of mobile phones and IoT devices. The retail business makes use of LI in a variety of ways, including store site selection, consumer demographics, and targeted advertising. The capacity to generate revenue from the usage of location data is described as LI. According to a Wipro study report, 80 percent of all data maintained by businesses contains a geographical component. GIS-based technologies assist in the extraction of insights from demographic data, revealing the link between people and place.
There are several advanced technology companies providing software and hardware solutions to companies in this sector. These technology companies like GeoCTRL based in Zurich helps businesses and large corporate companies in the retail, real estate, and hospitality tourism industry to analyze people's movement and to help these businesses understand what drives sales, profits, and visitations of their consumers through location analytics or LI.
The vast majority of retail companies are still unaware of what drives their sales. At what time of day does a local business attract what kind of customer? When is a marketing strategy likely to result in increased in-store revenues? In order to maximize product display, promotion, and the supply chain, data insights are necessary.
For instance, the Retail solution by GeoCTRL helps analyze a detailed audience profiling which provides accurate footfall data and detailed mobile audience insights. These insights can give you an understanding of who your customers are, how to impress them, and how to increase marketing ROI. Moreover, the data is in real-time hence, GeoCTRL empowers marketers to make quick decisions and adapt to any market changes by delivering real-time insights of customers' footfall, their dwell time, audience interests & behavior. And Finally, there is speed and simplicity in their data with a simple-to-use dashboard, which helps businesses easily analyze all data. You can also obtain deep insights into your location audience and synchronize it with your internal reporting data to drive your business performance.
Cybersecurity is the one major component of IT that has acquired more media exposure than any other in the last year. As cyber criminals took advantage of businesses’ swift shifts to remote work, many high-profile ransomware attacks put enterprises of all sizes and across all industries on constant alert. This increased threat has coincided with additional scrutiny over how consumer data is handled in the retail market.
Data privacy should be at the forefront of any retailer’s IT planning. New government regulations that extend from low-level solutions like multifactor authentication to AI-powered warning technologies can assist define these strategies. But, again, seeking advice from a reputable expert can assist in navigating the best options for any organization while being compliant with any required standards.
Another interesting term we often hear in the technology industry is the term Metaverse. While many describe this term in various definition, there are also several elements to Metaverse which makes it very unique and trendy. To define the term itself, Metaverse is a contemporary internet experience in 3-dimensional. Hence, the metaverse is an immersive next-generation version of the internet, likely rendered by virtual or augmented reality technology.
The venture capitalist Matthew Ball, describes the metaverse as a “successor state to the mobile internet” and a “platform for human leisure, labor, and existence at large.” Furthermore, Walmart begins to diverge into the world of the metaverse, with plans to launch its own cryptocurrency and NFT collection. Late this month, the major company filed various new trademarks indicating its intention to manufacture and sell virtual items, such as electronics, home décor, toys, sporting goods, and personal care products. Walmart stated in a separate filing that it will give consumers virtual currency in addition to NFTs.
Some of these components in the world of metaverse include:
The mirror world:
A virtual version of real-life people, places, and activities exists in a mirror world, which is a digitally rendered replica of the real world. Mirror worlds appear often in science fiction, such as in Netflix's Stranger Things, The Matrix film series, and Ready Player One, a novel, and film. The metaverse might be a mirror world that perfectly reflects the actual world, or it could be a completely made-up world like one seen in a video game.
Skeuomorphic design is a rare concept that basically implies that virtual items will be designed to seem like real-life objects. The metaverse may resemble the actual world in that it is frequently connected to our reality's physics and designs, but it does not have to be identical.
A digital twin is a virtual representation of a real-world object or building. Digital twin technology was initially utilized by NASA to perform simulations of space capsules in 2010. It was first introduced in the 1991 book Mirror Worlds by David Gelernter. Microsoft has underlined the importance of digital twin technology in the metaverse's construction.
Virtual reality (VR):
VR stands for a virtual reality (VR) experience in which the user wears a headset and sees and interacts with a digital environment. VR now includes complete headsets rather than glasses, immersing the user in a 360° virtual environment in which they may move about as long as they do not collide with actual barriers.
Augmented reality (AR):
AR stands for augmented reality, which is a digital overlay that is projected onto the actual environment. Consider Niantic's Pokémon Go, Snapchat's dancing hot dog, or even Google Glass wearables. While Google Glass tried to take off, there may soon be starting to AR-connected spectacles such as Facebook's Ray-Ban Stories or Snapchat Spectacles.
Mixed reality (MR):
MR combines features of virtual reality and augmented reality; however, the exact description is hazy. Virtual and real-world things can interact with one other, and virtual objects can interact with real-world objects. The Snapchat hot dog filter, for example, can dance across a table without slipping off the edge.
Traditional web-oriented CMS (Content Management System) solutions are no longer sufficient in today's multichannel society. Instead, a headless CMS is an appropriate solution for many retail businesses if you need to provide high-quality content and develop online experiences at a larger scale.
A headless application is one in which the backend content, data storage, and complex operations are separated from the consumer display of the information. In most situations, this is accomplished by making data available via APIs (also known as an API-driven strategy), which several front-end apps and frameworks may access.
Headless tools strengthen system functionality and flexibility, making it simpler for retailers to sell their products across several channels, such as their website, social commerce platforms, and even physical storefronts. As a result, companies may improve customer happiness, minimize the risk of errors, and establish a single source of truth with a whole perspective of their consumer’s behavior.
With its rising popularity, there are several popular companies that have started to integrate headless commerce setups into their businesses. Amazon which is one of the largest online marketplaces now offers users the ability to purchase orders in various ways by implementing Echo, which relies on voice comments. There is also Dash, which handles orders that are certain to devices it's connected to by a click of a button. Another retail pioneer, Nike has also migrated to a digital strategy. Nike used a Node.js BFF (Backend for Frontend) adaptor in conjunction with React SPA for a more robust mobile purchasing experience, weakening some of Adidas' market control.
Despite considerable growth in 2021, many businesses were still hesitant to implement this retail technology. Given that virtual try-on was still in its development phase, this isn’t surprising. Yet, the long-term nature of the pandemic, technical developments, and additional evidence of the potential benefits of virtual try-on give companies reason to be confident about the future.
Virtual try-on offers both an online and in-store solution personalized to consumers’ demands in multiple channels by integrating augmented reality with the concept of unified commerce. Virtual try-on can support customers in making more confident purchasing selections, leading to more sales and lower return rates. However, an increase in sales and demand isn’t the only advantage. Retailers can also use it to assess demand for certain goods, allowing for more deliberate industrial processes, boosting their sustainability efforts, and potentially reducing cost while saving time.
Customers are becoming increasingly conscious of the environmental impact of shopping and consumption. According to studies, 60% of consumers are willing to modify their buying habits to reduce their negative influence on the environment. Hence, customers are increasingly scrutinizing their purchasing decisions more attentively. With customer demand for sustainability, retailers seek to boost transparency and collaborate with more sustainable businesses to discover the best solutions to existing issues.
One approach is to use AI/ML-powered technology to eliminate present and potential waste throughout their supply chains. Artificial intelligence and machine learning can help stores become much more sustainable while also saving money by incorporating them into monitoring and improving process management.
Introducing innovative business concepts, such as the circular economy, is another approach. Companies will need to adapt to their new behaviors as an expanding customer base favor recycling, reusing, mending, renting, and minimizing.
Customers demand a consistent experience across all channels. Therefore, retailers must satisfy their expectations. Allowing seamless payments is one approach to achieving this goal. Payment systems will have to include the option to pay from anywhere, with the consumer in control of the transaction medium, which is still one of the most significant problems of the retail-customer experience today.
Because cash is becoming less common, companies need to implement new solutions tailored to their consumer needs. Customers will have to be able to pay without any friction, whether it’s by credit card, cryptocurrencies, mobile phone e-payments, or the increasingly popular purchase now, pay later payment options.
From the beginning of this decade, retail businesses have seized 2021 to establish new strategies and re-invent their competitive edge to adapt to evolving situations. In 2022, companies will need to increase their efforts to meet the growing demands for sustainability and innovative consumer experience, particularly in brick-and-mortar locations. Customers who are searching for tailored and unique solutions will progressively favor machine learning and artificial intelligence adoption, virtual reality experiences, immersive shopping, and flexible payment options.
Overall, retailers must carefully monitor the recent retail trends and sociocultural transformation to succeed in 2022 and beyond and learn which technologies to implement and how to do so effectively.