The retail industry is experiencing constant change, which has made retailers apprehensive. Although approximately one-third of retail executives are confident in maintaining or improving profit margins, almost all anticipate inflation to impact their profits, and the majority predict reduced consumer consumption due to financial concerns in the coming months of 2023.
However, the retail industry has demonstrated resilience and adaptability in recent years, reevaluating outdated systems in favor of more flexible operations and using analytics and tools, modern technologies, BOPIS (buy online and pick up in store), Virtual Styling, live video commerce and AR/VR to cultivate loyalty amidst rapidly changing consumer preferences.
Despite the challenges faced by the industry, retailers still have a chance to experience growth and development in these tough times by adopting a hybrid approach and turning shopping into an enjoyable experience rather than just a necessity.
According to a research report by Unibail-Rodamco-Westfield, by 2025, consumers’ expectations of retail spaces will significantly shift from a product-oriented approach to an experience-oriented one. As per recent surveys, 59% of consumers anticipate that more than 50% of retail space will be dedicated to creating experiences. Additionally, 75% of consumers predict this change will occur by 2027. Moreover, a significant 81% of customers worldwide express their willingness to pay a premium price for an immersive and innovative in-store experience, with the most sought-after activities being those related to creativity, health, and games.
To enhance customer experiences and transform traditional retail stores into hybrid models, significant advancements have been made in both physical and digital storefronts. Below are some of the notable technological innovations in retail:
1. Modern PoS System
Retail stores are no longer limited to selling products in physical stores, as they also provide services such as Buy Online Pick Up in Store (BOPIS) and same-day delivery. Contemporary point-of-sale (PoS) systems have both hardware and software capabilities that can facilitate faster transactions, reduce oversight, and mitigate the impact of staff errors. With so many new ways to order goods, the PoS needs to be updated intelligently.
A modern PoS system should be capable of addressing questions related to the impact of online orders on the store’s sales floor quantity in the database, as well as the reduction in sales count on the sales floor due to products being on hold. Not all businesses can adapt to the digital shift; it requires proper management.
For example, Microsoft’s physical stores were shut down around the country, while Walmart sustained this digital shift and was able to thrive. Most contemporary point-of-sale systems, especially cloud-based ones, need to include all the essential features you would anticipate from a cutting-edge POS. However, you must select high-performance hardware that is appropriate for your company to get the most out of your software.
The most advanced point of sale is where there is no POS; the consumer just walks in, collects their items, and walks out, and their bill is sent to them digitally, or they are charged through their wallet. This was made possible by Amazon by launching Amazon Go in 2020 in Seattle, USA. It’s one way to make shopping more experiential and innovative.
2. Augmented and virtual reality
As we know, the flagship technology for creating a phygital future comes in the form of AR/VR. One reason for the booming success of this technology was the pandemic, which allowed customers to adopt a “try-before-you-buy” approach. Now, even after the pandemic is almost over, people continue to use this technology for shopping as it saves time, gives them perspective, and helps in decision-making.
Numerous shoppers utilize the live view feature on their smartphones to grant access to their items and utilize the AR feature to visualize how particular items would appear in various areas of their houses before making a purchase. AR/VR holds the potential to revolutionize customers’ in-store experience.
For example, IKEA’s AR app allows customers to virtually place furniture in their home before making a purchase, giving them a better idea of how it will look and fit in their space.
3. 3D Hologram Displays
With the evolution of online shopping, retailers are introducing various innovations to maintain the in-store experience, and 3D hologram displays are one of them. To welcome customers and provide shopping assistance, these holograms are gradually replacing mannequins and human employees. For instance, companies like Audi, Nike, and Samsung used 3D holographic visuals to showcase or launch their products.
The utilization of 3D holographic visuals for products can have a positive impact on brand storytelling and enhance the shopping experience by making it more entertaining. Holograms can instantly attract attention due to their innovative approach in the physical retail market. This technology can also be utilized to bring in celebrities, influencers, and product experts from various locations to storefronts.
4. Internet of Things (IoT) in Retail
The projected market size for IoT in retail is estimated to reach $177.90 billion by 2031, with a CAGR of 20.3% between 2022 and 2031, according to forecasts. The Internet of Things is a technology that links numerous devices to a single ecosystem, enabling them to connect, transmit data to a hub, and react based on analyzed data. It is widely used in various sectors, each with its own advantages. IoT has gained popularity in the retail industry in recent years, with Amazon leading the way by establishing cashier-less stores and utilizing robots to speed up delivery.
Retail businesses benefit significantly from IoT’s advanced data collection capabilities, which enable them to better understand customer behavior, manage inventory, track delivery progress, and locate shipments, among other things. However, IoT implementation presents some challenges, including a lack of expertise, operational challenges, cybersecurity and privacy risks, and infrastructure requirements.
With the increasing popularity of new shopping trends, retailers are witnessing the emergence of hybrid shopping trends such as BOPIS and ROPO (Research online and purchase offline). To keep up with the changing behaviors and needs of consumers, retailers must be well-prepared. The retail industry is currently undergoing a transformation, where experience-based, data-driven, and hybrid forms are beginning to emerge. It is anticipated that only those retailers who can adapt to different technologies and innovate to address consumer issues will flourish in these challenging times, where consumer preferences are evolving quickly.
eInfochips has been listed as a “Top 10 Retail Security Solutions Provider” in Retail CIO Outlook magazine. We have gained extensive retail experience while developing an in-store surveillance solution for one of the largest grocery store chains in the world.
Our company, eInfochips, provides support to clients in building a complete connected retail solution that encompasses both storefronts and back offices. Our extensive experience includes the design and deployment of numerous solutions, such as in-store retail surveillance, handheld scanners, point-of-sale terminals, digital signage solutions, inventory management solutions, and e-commerce solutions. We are committed to helping our clients achieve their desired online or in-store customer shopping experiences by working with them to explore potential solutions and suggesting ways to achieve their goals.