Top Technologies Driving Retail Digital Transformation
The retail industry has undergone a massive digital transformation in the last 2 years. We know the reasons very well. Consumers are increasingly turning to digital channels that enable them to shop when and how they want.
That's why online sales are growing at double-digit rates while brick-and-mortar sales are slowly gaining speed as customer footfalls increase. Retail players are rethinking their core strategies to attract customers to their brick-and-mortar stores.
These new-age digital technologies give brands a chance to provide a better customer experience, create new operational efficiencies, and drive sales growth from non-traditional channels. This researched blog will discuss some of the most in-demand technologies driving the digital transformation in retail stores.
1. Artificial Intelligence
The global market for Artificial Intelligence (AI) is expected to grow from $5 billion to more than $31 billion between 2021 and 2028. So, If you haven't started using AI in a retail business, you may soon be left behind. Here is how AI is impacting the retail sector in 2022 and beyond.
Use robots to locate items: Lowe's has created the LoweBot to help customers navigate the store and find the things they need. The LoweBots roam the store and ask customers simple questions to determine what they are looking for. The robots can provide directions and maps to products and share speciality knowledge with customers.
Use AI for visual search: Neiman Marcus uses AI to make it easier for customers to find items. Their Snap.Find.Shop app allows users to take pictures of things they see and then search Neiman Marcus inventory to find the same item.
Boost In-store experience: Looking for something specific at a department store can be frustrating, but Macy's On Call app is here to help! Customers can chat with an AI bot to get directions to a specific item or check if something is in stock. If the bot detects a customer's frustration, it will alert a human employee to help the customer.
Remember customer preferences: ThredUp's new Goody Boxes are a great way to get stylish secondhand clothing without searching for individual pieces. The AI algorithm remembers your choices so that future boxes can better match your style. Plus, you only have to pay for the items you keep and can return the ones you don't like.
2. Smart Shelf Technology
The global Smart Shelves market is projected to reach USD 6.5 billion by 2027, from USD 3.2 billion in 2020, at a CAGR of 10.47% during the forecast period 2021–2027. These exciting figures report the rapid adoption of smart shelf technology in the retail industry. There are two main growth drivers for the smart shelves market.
1. Retailers' increased adoption of inventory management techniques to make more informed restocking decisions and their desire to get real-time customer engagement.
2. There is a growing acceptance of smart shelves as it offers outstanding benefits like theft identification, automatic low-end stock alert, observing consumer preferences, and better operations management compared to traditional shelves.
Why do retailers use smart shelves?
Smart shelves offer a more cost-effective way to
- Update pricing.
- Deliver rich media.
- Provide a unified experience across online & in-store channels.
These are some of the leading in-store digital shelf solutions:
- Trax Retail
- Avery Dennison
- Samsung Electronics
- E Ink Corporation
3. Blockchain Technology
The global blockchain technologies market is expected to grow from $5.49 billion in 2021 to $8.61 billion in 2022 at a compound annual growth rate of 56.9%. Blockchain technology offers several benefits that could help to revolutionize the retail industry. These are some top retail companies availing awesome benefits of the blockchain technology.
Walmart tracks damaged goods: Walmart is using IBM’s Hyperledger Fabric platform that makes the supply chain more efficient and cost-effective. This technology allows retailers to trace any infected or damaged goods before they reach the warehouse or store.
De Beers customers can track the diamond's journey: The diamond company De Beers has developed the Tracr technology to trace the journey of a diamond from extraction to the store. It will allow consumers to know the story behind their diamond and ensure that it is ethically sourced.
Ikea customers can observe furniture manufacturing: The Swedish furniture retailer Ikea uses blockchain to track the manufacturing process of products and materials. It allows shoppers to see where and how the material was manufactured, ensuring transparency and accountability throughout the supply chain.
Buy authenticated products from the LVMH Group: The LVMH Group owns luxury brands like Christian Dior. Louis Vuitton has developed the platform AURA, which provides product tracking and tracing services using Ethereum. Customers can use this platform to learn about the product's origin and obtain a certificate of authenticity no matter where the product is sold.
4. Augmented Reality
AR's role in retail is getting exciting! 34% of customers already use some form of AR while shopping, and 47% use it both in-store and online. Check out how world-class retailers effectively utilize Augmented Reality technology to boost brand presence and customer shopping experience.
Dress virtually with Timberland: Timberland, the outdoor fashion retailer, uses a 'magic mirror' an AI-powered mirror to virtually dress individuals in selected garments. Shoppers can quickly and conveniently try different outfits without taking off their clothes and can also seek an opinion from friends or family who accompanied them to the Timberland store.
Adidas uses AR to debut sustainable shoes: To celebrate the launch of their new sustainable Adidas Stan Smith line of shoes, Adidas created a whirlwind web-based augmented reality experience that showcases the eco-friendly materials that make up its sustainable product.
The retail company partnered with The Athlete's Foot to turn its retail windows into trigger points for the WebAR experience by placing window stickers with QR codes at various store locations across Europe.
To engage with the AR experience, users scan the QR code using their smartphone. A tornado filled with sustainable materials immediately appears, and as it swirls, the Adidas Stan Smith shoe materializes. The Athlete's Foot logo appears with the phrase "dare to change." Users can click the "shop now" button to purchase the product directly from their smartphone.
The global market for retail robots was valued at $7.1 billion in 2020 and is expected to surpass $55.8 billion by 2028, registering an annual growth rate of 30.1% during the forecast period (2021-2028). Check out some exciting applications of robotics in retail.
Brand activation in retail stores: Catching the attention of in-store shoppers is almost impossible when thousands of brands are on display in any retail store. Brand activation and promotion become one of the biggest challenges at this stage.
Tokinomo in-store marketing robots help distinguish a brand on a shelf by moving the product to and fro to put it into the spotlight whenever they sense a customer approaching the shelves. The brand's interactive approach is one of the strong reasons why FMCG brands worldwide are already using it with outstanding results in terms of brand awareness, shopper engagement, and sales.
Drones for delivery: Walmart aims to reach 4 million households using its drone delivery services, while Amazon customers living in Lockeford, California, will become among the first to receive Prime Air deliveries.
Inventory management & customer service: Navii is a perfect example of a six-foot-tall robot that roams the aisles of the retail store and gathers intelligence about product inventory on the shelves. This information is then processed and used to determine current inventory counts for products on the shelf.
While on patrol in the store, NAVii can also interact with consumers to help them find items in the store. With a built-in touch screen, NAVii can show a consumer where to find an item, or NAVii can lead the consumer directly to the product location.
The RFID market is projected to reach USD 35.6 billion by 2030 from USD 14.5 billion in 2022; it is expected to grow at a CAGR of 11.9% from 2022 to 2030. Inventory tracking is the most widely used RFID application in retail.
It provides accurate product-location information about where an item is in the supply chain, such as on a truck/ship or in a specific store, and where to find it in the store. It can help lower inventory management costs, complexity and boost customer satisfaction. Take a look at some of the exciting applications of RFID in retail:
Accurate inventory management: Athletic apparel retailer Lululemon uses RFID tags throughout its nearly 500 stores. The company reports that the technology has resulted in 98% inventory accuracy and a payback period of one year or less. Lululemon used this location information extensively to manage inventory levels as customer demands shifted during the pandemic.
Efficient and accurate checkouts: Decathlon, a sports-equipment retailer, provides scan-and-go solutions that allow shoppers to scan and pay for items with their smartphones, automatically disabling RFID tags and avoiding checkout lines altogether.
7. Voice Commerce
Global smart speaker sales will surpass $30 billion by 2024. Voice commerce has become highly popular as it only needs intelligent technology to make it happen.
1. A device with a voice assistant
2. A command to activate the device
3. Use of trigger words like 'order XYZ. And you are done.
Why do consumers prefer voice commerce?
52% of consumers say convenience and 48% say the ability to do things hands-free are the two biggest reasons for preferring voice assistants over mobile apps or websites.
Further, being able to automate routine shopping tasks and a higher level of personalization was tied for third, at 41%. Here are a few examples of top retailers tapping voice-assisted shopping.
Bloomingdale's: The Bloomingdale's voice app lets you
- Ask for coupons and deals
- Search for products
- Ask for nearby store locations
- Check for store hours
- Ceck for events at your local store
Nike: The concept introduced by Nike unlocks content in real-time for customers. The sports retailer introduced a real-time voice assistant for a new sneaker model on sale during an NBA basketball game. The customers watching the game with access to Google Assistant could use “ask Nike” to buy a pair of the $350 shoes. Six minutes later, the shoes had gone out of stock.
Retail digital transformation is one of the most talked-about trending topics in the industry today. As shoppers increasingly turn to digital channels to research and purchase products, retailers must follow suit or risk being left behind. This trend is having a profound effect on the retail industry and is changing how retailers do business and interact with their tech-savvy shoppers.
Fynd has been credited by premium brands such as Hunkemoller, Spykar, Ruosh, Nike, Diesel, Hamleys, Raymonds and many more for transforming them into brands with a vast omnichannel presence. Book a demo with Fynd today to learn how retail digital transformation can reduce manual errors, cut overall costs, boost sales and provide a seamless shopping experience for the customers.