The Future of Merchandising: Top 4 Retail Technology Trends
Your customers are becoming increasingly tech savvy. What are you doing to keep up? Let’s explore how technologies, such as Artificial Intelligence (AI) and the Internet of Things (IoT), help retail businesses improve efficiency and deliver a better experience.
Mobility makes it easy.
According to a Pew Research Center survey, the earliest e-commerce transactions date back to 1994, but by 2016, Americans were spending nearly $395 billion annually online.
Figure 1 shows that of these online shoppers, 51% bought something using a cellphone. To accommodate increasingly mobile target audiences, businesses need to make sure their websites are compatible with multiple devices. Organizations should also consider building interactive applications that make it easy for buyers to search for items, find related products, get deals and make seamless transactions anytime, anywhere.
Get innovative with the IoT.
According to a McKinsey Global Institute report, the IoT is forecasted to have an economic impact of $3.9 trillion to $11.1 trillion per year in 2025.
Behind the scenes, the IoT enables retailers to monitor business activity and make changes in real time. This can range from remotely adjusting store lighting or temperature settings to gaining greater visibility into supply chain processes. IoT sensors and devices collect and share data throughout the supply chain, so business leaders can quickly locate and rectify delays or errors.
The faster you are able to correct a mishap, the lower your costs. What if you find out that your customer never received their delivery? With IoT-enabled tags, you will know exactly where the loss occurred, what factors were associated with the derailment and whether or not these conditions will affect future deliveries in the same area.
On the consumer end, the IoT provides more personalized and convenient experiences. Retail technology, such as smart signage display ads and tags that change based on shopper interests and trends, can help businesses maintain relevancy and appeal.
Figure 2 shows a sample of what an Amazon Dash Button looks like. These Wi-Fi connected devices let customers reorder their favorite products with just one click. Retail stores can leverage similar devices as part of a loyalty programs — ensuring they are the go-to location for reoccurring purchases.
Boutiques can also adopt tools like the Oak Labs dressing-room mirror. These intelligent mirrors leverage the IoT to read Radio-Frequency Identification (RFID) tags on clothes, recommend related items and notify sales clerks of sizing requests.
Bots in the workplace
AI and advanced robotics improve productivity and efficiency, enhancing experiences both inside and outside of the business. According to IBM, 65% of millennials prefer interacting with bots to talking to live agents. In addition to providing sales support by engaging with online shoppers, smart chatbots can track messages and predict consumer behavior based on location, inquiries and profile information.
When it comes to advanced machines, businesses of all sizes can benefit. For example, small organizations can invest in 3–D technology to make prototypes on-site without staffing an entire factory. Larger organizations can invest in autonomous service bots such as the LoweBot. Lowe’s deployed these mechanical assistants in 11 stores throughout the San Francisco Bay area in 2016 to scan inventory, capture real-time data and detect patterns or gaps that influence business decisions.
Initiating a POS-itive support system
Taking inventory can be time consuming and complicated — especially for retailers with multiple locations. While some shops still use traditional cash registers, many have adopted Point of Sale (POS) systems to help them monitor transactions. With a POS system, you get instant inventory updates when you scan a customer’s product, so you can keep track of when goods are running low and new orders should be made.
The ability to centralize data and run reports also provides insight into future company investments. Year-over-year comparisons indicate customer trends that can be categorized and analyzed by season, gender, age and more. Using this data to anticipate how you will restock for the new year is a money-saving tactic that prevents excess inventory or unexpected shortages.
Cloud-based POS systems are especially beneficial to growing businesses that are inherently mobile or unable to house vast amounts of data on-site. According to Small Business Trends, only 14% of midmarket organizations rate their ability to mitigate cyberattacks as highly effective. If you feel like you don’t have the technical expertise necessary to host and maintain servers that support POS systems, you can leverage the cloud. Through a provider, all of your data can be stored and encrypted at an off-site location, available for you to access 24/7.
Want to make the customer experience even more personal? A POS system can keep track of transactions and link them to buyers. Suppose you have a customer that frequently stops by your grocery store to buy baby formula and diapers. With this information, you can send them promotion alerts and coupons for related baby goods — and create a relationship that entices the customer to choose your location over competitors.