2019 trends in retail technology innovation
Rising customer expectations around a personalised customer experience, and an effective omnichannel delivery between digital, social and in-store, remain the main drivers for innovation in the retail industry. According to research conducted by Tech., a collaboration between Retail Week and World Retail Congress, global retail technology spending will reach $203 billion in 2019.
This marks a 3.6% increase from figures recorded in 2018, as physical retailers aim to bring a digital element to in-store environments, creating new offline experiences, engaging customers in new ways, and using new technologies to manage stock, operations and promotions.
Consumers drive expectation in omnichannel
In the current climate, retailers globally are having to compete with both online and real-world competition, with consumers even using their smartphones in-store for price comparisons. The expectation from shoppers is a seamless payment experience, as well as an overall strategy where they gain innovative, experiential offerings in the in-store environment. As more brick-and-mortar stores continue to close year-on-year, there is a necessity for retailers and brands to be more inventive with regard to their in-store experience offerings, giving consumers a reason to visit the physical store, rather than shop online, as ecommerce figures soar.
As we know, smartphone usage is increasing globally, and the number of mobile subscribers currently forecasted by the GSMA to reach 5.9 billion by 2025, the equivalent of 71% of the world’s population. As smartphone usage continues to proliferate, there is a continued and high expectation on retailers and technology providers to deliver first-rate online experiences, as well as innovating in-store, and connecting both worlds together with seamless integration. With connectivity set to improve exponentially with the emergence of 5G, competition will inevitably become galvanised in the new landscape and expectation on all players will increase further.
Focus on experiential and a ‘concierge’ shopping experience
New trends in the retail sector are prompting a shift towards more experience-based customer loyalties strategies. Competition between brands and retailers has become based on far more than traditional price wars, as offering new payment experiences, and experiential shopping strategies in-store allows for disruption and competition in the sector.
A renewed focus on purchase journeys, including mPOS, allows customers to avoid queues, seek help from agents around the store, as well as use self-service checkouts and different payment options. Own-branded payment apps are being developed by major retailers, with good consumer uptake, for example, M&S’ recent ‘Mobile Pay Go’ loyalty app, which allows customers to pay through with their phone for items up to £30, and links with their M&S account. For retailers, this fuels their understanding of customer shopping behaviour and preferences, validates their marketing campaigns, as well as allowing them to offer a more ‘concierge’ shopping experience that their customers will remember.
US brand, Nike, has invested significantly in their physical store experience at their New York flagship store, which features a full-size basketball court on their top floor where customers can ‘road test’ their trainers, and even simulate outdoor runs by running on treadmills with large screens depicting outdoor scenes. In a nod towards a strong omnichannel proposition, their mobile app, ‘App at Retail’, also lets customers view whether their item is available in a particular store, reserve it and then receive a push notification when it arrives.
In Asia and the US, the autonomous store concept is a growing phenomenon of in-store innovation, with retail start-ups receiving significant funding from tech giants investing heavily in the sector. On the back of the success of Amazon Go, many companies are following in their cashierless shopping footsteps, such as start-up, Inokyo, in California, or JD.com, in Indonesia, both offering similar AI-powered stores which offered an unprecedented level of convenience for customers, without being slowed by queues or payments. Here, we can see a true shift towards experiential shopping, which not only affects the consumer at the front-end, but all technologies and back-office systems that enable that experience.
Heat mapping, audience measurement and further in-store personalisation
Location and proximity data provide a useful snapshot for audience modelling and measurement, not only offering vital information on who is using your app, but also how to target them more intuitively. Data gathered by beacon technology is used to offer truly personalised experiences, leveraging the customer’s mobile location to target loyalty offers specific to the individual and their geographic location. This information, when combined with Heatmap analytics gathering shopper flow data from the CCTV cameras in-store, really allow retailers and brands to build up a picture of where people are moving around the shop, whether campaigns are working, and why.
This means that when information is delivered directly to a customer’s mobile via a product or store-specific notification, it can be delivered with the necessary intelligence behind it. In future campaigns, this information, used alongside location and proximity data used to determine foot traffic and shopping patterns, will allow for even more targeted and impactful campaigns, and therefore more foot traffic in-store as a result.
This new focus drives an uplift in IT spending overall, affecting the retail strategies of many technology players, brands and retailers aiming to match the pace of innovation to customer demand.