Over time, the retail industry has transitioned from being product-centric to customer-centric. This transition has been supported by an increased uptake of next-generation technologies, which facilitate digitalisation across the entire retail ecosystem. The adoption of technologies such as internet of things (IoT), and social, mobile, analytics and cloud (SMAC) has enabled retail enterprises to deliver a personalised experience according to customers’ changing needs. These technologies are helping retailers generate business intelligence and gain real-time insights into market trends and customer preferences. Retailers are using these technologies to automate various parts of the retail chain, from manufacturing to last-mile delivery. They are building capabilities in omni-channel retailing, which has now become critical for not only ensuring brand visibility, but also for delivering a seamless customer experience.
A look at the key technologies changing the face of the retail industry…
IoT leading the way
IoT is a technology that has reshaped the dynamics of the entire retail industry. It has helped retailers in modernising operations in the fields of customer experience and supply chain management. It has also improved in-store marketing efforts of retailers and brands. For instance, IoT devices integrated with Bluetooth and Wi-Fi are facilitating in-store navigation by helping customers find the desired product. In grocery stores, IoT is being used for predictive equipment maintenance such as monitoring temperature fluctuations to ensure food safety. Meanwhile, some retailers are using IoT-based contactless checkout/self-checkout mechanisms involving automatic scanning of products when customers walk out of the store. Mobile-based checkouts, assisted checkouts, Q-busters, and express counters make checkouts faster and easier by enabling online payments through wallets and payment gateways. Retailers are also using radio frequency identification (RFID) technologies to improve the precision of inventory tracking. Going forward, IoT is likely to witness traction in warehouse and logistics operations as the cost of deploying IoT solutions decreases.
SMAC creating new touchpoints to connect with customers
Technologies such as SMAC have helped in creating new touchpoints for enterprises to interact with customers. In fact, SMAC has helped in reshaping the way customers experience shopping for a brand. It is driving business innovation by creating an ecosystem that allows enterprises to improve their operations and connect with customers at minimal overhead cost and maximum reach. Retailers are also leveraging a wide range of in-store technologies to make the whole shopping experience digital.
Cloud technology offers many benefits to retailers operating in an omni-channel customer environment. It provides access to information pertaining to inventories and their location, and how to best deliver products in the fastest and the most efficient way possible. Cloud-based platforms also give retailers the flexibility to make changes to orders when they are already in transit. The retail-as-a-service cloud computing model can integrate different verticals such as inventory and order processing, thereby improving restocking capabilities and enabling retailers to have an enterprise-wide supply chain visibility. Cloud helps to capture the real-time status of consignments and digitalised documents from suppliers, carriers, logistics providers, brokers, etc. Another major advantage of moving to the cloud is the flexibility offered in terms of pay-as-you-use, thereby eliminating the need for retailers to make large upfront investments in technology to update their IT infrastructure. Retailers can increase or decrease their computing usage as per their needs. Particularly, they can scale up their operations at times of peak demand, therefore eliminating the need for stores to purchase additional equipment, a capability that is difficult to achieve using an in-house IT set-up.
In addition, data analytics is playing a key role in evolving business models for the retail sector. The technology is being used to formulate models for determining the optimal prices of products. By making use of interactive and self-service interfaces, retailers are able to make the right assumptions about product pricing and immediately see the impact on the volume and demand of their own products as well as that of their competitors. Retailers are using big data to derive valuable insights for optimising and personalising marketing and promotional campaigns. This enables them to better understand consumers in terms of branding and product management.
Upcoming technology trends
Going forward, retailers are expected to step up investments in upgrading their IT infrastructure to remain competitive amidst changing industry dynamics. The key technology trends that are set to drive technological transformation in the retail sector are:
- Conversational commerce: This is expected to emerge as an important trend in the coming years wherein online shoppers can use over-the-top (OTT) platforms such as WhatsApp to converse with a retail brand’s customer service team directly. It would help in addressing all queries throughout the customers’ buying journey.
- AR/VR: Augmented reality and virtual reality (AR/VR) is another trend that is going to transform the entire shopping experience for customers, resulting in captivating, interactive experiences that are informative as well as entertaining. For instance, AR/VR-enabled devices would help in creating an immersive interface that provides real-life-like experiences to show the utility of products and help customers make more informed choices. These systems could also be used for managing operations such as training, efficiency management and floor management. Further, retailers could use AR/VR for creating a digitally themed environment inside stores.
- AI-enabled chatbots and voice assistants: AI-enabled chatbots have slowly started making inroads into the sector. Chatbots bring in multiple benefits for retailers. They help in 24×7 customer engagement, personalisation and suggestive selling and can be used as automated shopping assistants. AI-powered voice assistants are also becoming a rage among retail enterprises. These enable customers to use voice for buying or enquiring about products. Often, these voice assistants are programmed to understand customer shopping patterns and support suggestive selling. They help retailers by enabling them to influence customer behaviour, creating new habits, becoming the voice of a brand and enhancing customer experience.
- Robotic assistants and drones: Some leading retailers as well as prominent restaurant chains have started testing robotic assistants. These assistants will play a huge role in driving customer convenience. Drones are also expected to change the face of the retail industry in the coming years by offering advantages such as quick delivery, lower delivery costs as well as enhanced security. A few retail enterprises have started testing drones for last-mile delivery to customers. For instance, Tech Eagle, a Lucknow-based food delivery start-up, had designed drones that were capable of transporting up to 2 litres of hot tea at distances of up to 10 km. The start-up has now been acquired by Zomato, which recently announced that it had successfully tested food delivery via drones.
- Blockchain: Another promising technology that could gain traction in the retail industry is blockchain. It could be beneficial in supply chain and inventory management, and enable uniform real-time access to updated product information supplied by brands. This would provide a medium for retailers to report back information on stock levels and customer feedback to suppliers. The distributed nature of blockchain gives it advantage over other tracking technologies as records can’t be altered, destroyed or lost. Blockchain applications can also be used to verify the authenticity of branded products by both retailers and consumers. The digital records created using blockchain can help streamline the return and refund processes. Customers can obtain information from every point in the supply chain, and gain insights into the origins and manufacturing processes of products. This results in complete transparency between retailers and customers, and adds a new dimension based on trust to the retailer-customer relationship. s
Kuhu Singh Abbhi
Retailers are expected to step up investments in upgrading their IT infrastructure to remain competitive amidst changing industry dynamics.
