The past few years have seen a rapid transformation of the retail industry, which has gradually expanded beyond the traditional brick-and-mortar stores and moved into the immersive world of e-commerce. With the emergence of a large internet-using population and the growing adoption of smart devices, retailers are increasingly employing digital means to enhance their marketing and business strategies. There have been rapid advancements in ICT and technology solutions deployed across retail chains.

With the help of emerging technologies such as internet of things (IoT), augmented and virtual reality (AR and VR), artificial intelligence (AI) and big data, enterprises in the retail sector gather relevant information from the vast volumes of data available to automate various parts of the retail chain, from manufacturing to last-mile delivery.

The Covid-19 crisis has further pu­sh­ed retailers to adopt technologies for accelerating growth and surviving market competition. While retail was hit hard during the pandemic, the sector’s revival is well under way as retailers are focused on automation and technology adoption to move their businesses forward. The pandemic has also catalysed the expansi­on of e-commerce companies to Tier 3 and Tier 4 ci­ti­es. The factors enabling the rapid tra­ns­formation include experience personalisation, supply chain integration, digitalisation of operations and fintech lending.

A look at some of the recent techno­logy trends dominating the retail sector, ma­r­ket overview and the way forward…

Market growth

Retail and e-commerce is one of the fa­stest growing industries in the world. The In­dian e-commerce sector is expected to grow at a 27 per cent CAGR to reach $ 99 billion by 2024, up from $30 billion in 2019. This double-digit growth rate de­mo­­ns­trates how quickly the sector is evol­ving, with technology being at the he­art of this evolution.

Technological advancements have re­sul­ted in significant changes across in­dus­tries and sectors. Digital transformation has completely reshaped shopping, on­­line ex­pe­ri­ences and even customer ex­pectations in physical stores. The disruption caused by the Covid-19 pandemic has turned the in­dustry on its head, bringing with it un­pre­cedented technological innovations.

Virtual shopping assistants, in-store stylist robots, AI-powered recommendation engines, bot-managed billing counters, and other technological advance­me­nts have altered the retail landscape. Buyers have transformed into digitally em­powered, hyperconnected consumers with a comprehensive view of the competitive landscape.

Key tech trends


One of the key applications of AI technology in the retail sector has been chatbots. There has been a rapid adoption of messaging-based customer service bots across retail enterprises. AI-based chatbots help enhance customer experience by providing support and assistance to customers throu­ghout their shopping journey, right from the selection of the product up to its delivery and sometimes beyond that too with post-delivery support. This helps companies reduce the cart abandonment ratio, thereby improving the churn rate. As per a recent Forbes article, at least 50 per cent of the Fortune 500 companies have experimented with and tested bots.


AR and VR technologies have given a whole new definition to customer experience by me­rging the physical and virtual worlds. Us­ing AR/VR, customers can browse products and even try them virtually. AR/VR-enabled devices help in creating an immersive interface that provides lifelike experiences 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 can use AR/VR for creating a digitally the­med environment inside stores.

The measures undertaken amidst the Covid-19 crisis have played a huge role in increasing the demand for AR systems by allowing customers to adopt a try-before-you-buy approach. For instance, Ikea created the Ikea’s Place app, where it allows shoppers to access items from Ikea’s inventory via a live view function on their sm­a­rt­phones. Similarly, Oak Labs uses AR/VR to create interactive changing rooms. These smart mirrors recommend other items that can be paired with the products that the customers are trying. Thus, AR/ VR technologies have given a whole new definition to customer experience by mer­ging the physical and virtual worlds.


IoT caters to every facet of the retail experience. It helps retailers modernise operations and supply chain management, and improves in-store marketing efforts of retailers and brands. According to industry reports, the global market for IoT hardware for retail applications is expected to be worth more than $94 billion by 2025. With IoT, retailers gather data to further analyse and make informed decisions for product placement, stock control and efficiency improvement. IoT devices are facilitating in-store navigation by helping customers find the desired product. These de­vices are also being used for predictive equipment maintenance and contactless checkout/self-checkout mechanisms. For instance, Zara uses radio frequency identification (RFID) across its stores for item-level tracking and replenishment, which has dramatically reduced the cost of stocktaking and reporting. Another application of IoT is the utilisation of iBeacons to send consumers notifications while they are passing by a store in order to increase sa­les. Going forward, as the cost of dep­loying IoT solutions decreases, the technology solution is likely to gain traction in warehouse and logistics operations.

Big data

A thing that retailers have in abundance is the data of their users – their choice of products, buying habits, purchasing patterns, dislikes, etc. However, until recen­tly, retailers were not able to derive any be­ne­fits from this data as they did not have the means to do so. This does not seem to be the case today as enterprises can now an­alyse consumer behaviour and trends by using big data. By deploying predictive analytics tools, retailers can better understand consumer purchasing behaviour. Th­ey can leverage this knowledge to provide a personalised shopping experience, better address consumer requirements and grievances and take pre-emptive measures to ensure a smooth shopping journey for cus­tomers. Retailers are also using big data to derive valuable insights for optimising and personalising marketing and promotional campaigns. It enables them to better understand consumers in terms of branding and product management.

Big data brings in a host of benefits for enterprises on the operational side as well. For instance, it helps retailers reduce supply chain costs by making the whole process mo­re agile. On the business side, the technology is being used to formulate models for determining optimal product prices. 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 those of their competitors.

The way forward

Going forward, AR and VR, conversational commerce and personalisation will emerge as key trends in the coming deca­de. These front-end technologies will be complemented with a robust and agile back-end infrastructure, which will further enable effective business continuity planning.

The retail industry’s transition from being product-centric to becoming customer-centric has been supported by an increased uptake of next-generation technologies, which have facilitated digitalisation across the entire retail ecosystem. Th­ese technologies are helping retailers generate business intelligence and gain real-time insights into market trends and customer preferences. They are also helping retailers in building omnichannel retailing capabilities, which have become critical in the wake of the Covid-19 pandemic. Ac­cording to Global Data, the pandemic will accelerate the growth of India’s e-commerce market, pushing it to Rs 7 trillion by 2023.

Thus, retailers must expand their digital footprint, increase their online presence, fine-tune their digital strategies and scale up their investments in IT infrastructure to remain competitive despite the ch­anging industry dynamics.