Retail has always been on the edge of innovation pacing up with the advancing technology. Being adaptive to the changing trends has enabled the retail sector to gain an unmatchable advantage of reaping the benefits of these technologies. From the beginning of ‘Mom and Pop’ stores to the latest digital stores, retail has always marked its presence in the ever-changing trend. Retail Landscape has changed drastically.
With changing trends and market preferences, the only way for the businesses to thrive is to quickly adapt to the shifts and ensure sustained methods of sale. With stores already exploring the new dimensions of sales, the recent pandemic which led to complications in the normal functioning of the society has further forced them to adapt to the new measures with no further delay. With the intent to better their position in the market, retailers are exploring the latest avenues of technological leaps.
It’s close to impossible to statistically predict these changes and their outcomes. However, summarising a few of them would help us understand the gist of the changes in the retail sector.
Evolving Business Models
With the advancement in the technology’s capability to provide comfort to the user, retailers have been trying to induce advances into their business. However, the pandemic has thrust these businesses into a black hole of unlimited opportunities to explore the benefits of the same technology. With the encouragement of social distancing and minimum physical interaction, the shopping behaviour of the customer took a drastic turn from routine physical store purchases to online purchases. According to a recent study, nearly 40 % of the customers have admitted to shopping online for the things they would normally go to a physical store for.
With these commendable shifts in the buying pattern, it’s no surprise that stores are incorporating more platform-based sales. This has enabled the astronomical rise of social commerce in the year 2020.
Businesses are partnering with the social media platforms to create custom storefronts featuring their products thereby gaining the potential to sell worldwide through these social platforms. One such latest innovation is the introduction of Facebook shops. It has a shop section in its app to enable more personalized selling propositions based on the information of the customer it already has access to.
Socially Integrated Visual Search
With the advancement in picture analysis and description decoding, online shoppers can upload a picture of the product or a description of it to get a visual suggestion of the product to enable the purchase. To enable this, brands should however have a presence on image-based platforms like Instagram, Facebook, etc. With the image-based purchasing gaining relevance, sellers are also capturing on the top layer benefits by incorporating this with the AI tools to enable more sophistication to the customers making the purchase.
Exploring the New Dimension of AI, VR, and AR
With the continuous adaptation to changing market preferences, brands have also entered into the new dimension of sales, the 3D. With the use of virtual reality and augmented reality, retail stores have explored the most potential way to improvise their method of sale and in turn, entered the profiteer’s club. Another approach through which sellers adopted 3D is the use of printers which at the beginning had the capability to print out the prototypes of the product and now can completely manufacture a product from scratch. According to a recent survey by Nielsen Global Connect, around 43% of the respondents expressed their willingness to use apps and in-store guidance via recommendations thereby paving way for the retailers to further transform their stores into virtual stores.
While the instant shipping options have been made possible through air cargo, the only downside the online or virtual stores faced was the lack of options to visualize the products for the client. The main value AR leveraged is on its capability to sophisticate the buying process mainly with heavy and larger goods.
For example, people would be more willing to use technology to determine whether a cupboard would fit into their living room more than whether an outfit suits them. Running by the same logic, industries like furniture and home decor were among the top users of AI and AR in their sales.
With the recent pandemic forcing the businesses to adapt to more modern and sophisticated means of selling, AR and virtual selling has almost become the new normal. In fact, a 2020 retail index published by IBM states that there has been a multifold increase in digital shopping.
With the Internet of things made available to people supported by network-enabled digital devices, retailers quickly reinvented their supply chains on an efficient and productive frontier. According to a study published by Zebra Retail Study, around 75% of retailers were willing to invest in the internet of things to enable automation, sensor, and transparency in the inventory status.
With the lack of physical approachability to the product, customers are often more aligned towards the brands they already are committed to owing to their trustworthiness. This has changed the approach the sellers had towards the buyers. In order to capture these audiences, brands are continuously incorporating ethical, moral, and empathetic standards into their product. A consumer culture report published recently has concluded that around 70% of the customers are willing to buy from the brands aligning with their moral and ethical beliefs.
There has been a considerable shift not only from physical to online stores, but also the technology equipped in the physical stores. Retailers have invested in the latest technologies to improve the in-store experience for the customers. These include the incorporation of kiosks, self-checkout dashboards, product catalogue displayers, etc.
Kiosks, for example, are built in such a way that enables the fastest delivery of information to the user in a convenient and comprehensible method. A recent report published predicted that the kiosk market would reach a CAGR of 13-14% over 2020-2025.
Online Stores into Physical Stores
With most of the retailers going online and visual from physical stores, few of the retailers also explored the other side of the coin. For example, Amazon – an already leading online store, recently started investing in its offline grocery stores to enable both online as well as in-store purchases. It facilitates the same day pick up and delivery of the products ordered and also the checkout-dashboard to skip out the payment lines.
Real estate experts predicted around 900 brick-and-mortar stores would be opened by the end of 2020. However, with the unexpected pandemic taking a toll on the flux of business around the world, the actual figures were less than expected but still high enough to represent a changing trend.
Conclusively, 2020 has turned out to be a splendid year for the retailers aiming to leverage the market technology to stay adapted to the flexible preferences and expectations. With the market landscape changing continuously, it is these retailers who remain competitive at the end of the day.