There's no doubt that e-commerce is on the rise as more and more consumers every year shop online and from their mobile phones. But before proclaiming in-store shopping to be a thing of the past, it's wise to consider how brick-and-mortar retail stores are beginning to implement cutting-edge technology. From robots that can help you cross out items on your shopping list to smart dressing rooms that can make product recommendations, the store of the future isn't shaping up to be a solely online experience. If anything, the online and offline shopping worlds are merging to improve customer experiences in many industries.
Consumers can expect retailers to start testing and releasing new in-store technologies that will shape customer shopping experiences for years to come. Here are six trends to follow in the coming year.
1. The In-store Internet of Things
A number of major brands, such as Samsung and LG, made a splash at the Consumer Electronics Show (CES) in Las Vegas this year when they unveiled a new wave of connected devices for the home. However, consumers will most likely experience IoT in retail stores long before they own a smart washing machine. While IoT has huge implications for all industries, retail IoT can both transform the customer experience as well as increase logistics efficiency on the backend.
“We are working with many leading retailers and consumer product companies to reimagine what a connected store could look like," says Nayaki Nayyar, general manager and global head of IoT and Innovation Go to Market at SAP. According to Nayyar, this includes everything from electronic shelf labels with dynamic pricing to interactive digital signs.
2. AI-Powered Recommendations
Personalization has long been a focus of retailers, but with AI, the ability to customize each individual shopper's experience will be possible. “The savviest retailers are taking advantage of advancements in machine learning, deep analytics and artificial intelligence for a more targeted and personalized shopping experience," says Emily Bezzant, head analyst at Edited, a retail analytics company. According to Bezzant, brands such as North Face and 1-800-Flowers.com are already using AI to provide personalized recommendations to customers.
3. Voice-activated Shopping Assistants
Voice-activated personal assistants, such as Amazon's Alexa and Apple's Siri, are positioned to have a huge impact on shopping behavior this year. According to Supriya Chaudhury, chief marketing officer at the e-commerce intelligence firm Clavis Insight, the way consumers shop on these devices will have major implications for retailers. When ordering a new item with Alexa, the technology presents shoppers with a subset of items to choose from, curated by Amazon. However, when re-ordering an item, Alexa will find the most recent item you've ordered and add it to your list. “If you're just starting to use voice enablement and you don't have a history of shopping at a retailer, the retailer could then influence what gets into your shopping bag. The retailer has power over what they might suggest to a shopper," explains Chaudhury.
4. The Wallet-free Shopper
A hot topic of conversation among retailers at this year's CES was the rise of the mobile wallet and contactless payment solutions, such as Apple Pay and Android Pay. In 2017, retailers will be testing out more ways to connect mobile payments with their loyalty programs to access more customer behavior data. Retailers Walmart and Tesco have already started the practice by allowing customers to pay with their branded mobile apps. However, asking consumers to download an app for every retailer they patronize won't be a sustainable practice for very long. Most likely, retailers will need to find a way to link their loyalty programs with existing mobile wallet solutions to give customers a convenient way to pay while also collecting loyalty points. Take Amazon, as an example. The company recently launched a cashless 'Amazon Go' grocery store, where you simply get what you need and leave — no need to stand in a checkout line.
5. Virtual Retail Experiences
Have you ever wanted to see how an item of clothing would look on you without having to deal with the hassle of a dressing room? With virtual reality (VR) experiences in-store, shoppers can check to see if the newest style they're considering will look good on them before they enter the dressing room. “VR is changing the retail landscape by fusing together the offline and online environment for enhanced customer engagement," says Paul Miller, CMO Americas at Xero. “VR is making it possible for sportswear shoppers to test out gear in environments it would be used in or try on clothing in a virtual dressing room."
6. Crowdsourcing Products Before They Hit the Shelf
Crowdsourcing platforms, such as IndieGoGo and Kickstarter, have launched a new era of innovation by democratizing access to everyday consumers. Both large enterprise brands and burgeoning startups alike are now using these platforms to test ideas, garnering the interest and funding they need to launch new products. “Digital and social media have provided countless opportunities to engage with so many people at once about subjects, products and ingredients that are interesting or culturally significant," says Richelieu Dennis, CEO of Sundial Brands. “Now any brand, regardless of marketing or research budget, can effectively and efficiently have direct and real dialogue with its communities on a broad scale."
Betabrand, a San Francisco-based clothing startup, leverages crowdfunding for new product development: "Help us decide what to make! By crowdfunding prototype designs in our Think Tank, you determine if they become actual Betabrand products. And you'll save up to 30 percent in the process," the company proclaims on its website.
The focus on offline versus online purchasing will fade rapidly as these two worlds merge. The rate at which retailers are embracing new technologies to upgrade and enhance the shopping experience means that the customer experience will instead take center stage. This next year promises to be pivotal for retail brands as they implement new technologies in-store and reinvent the future shopping experience.
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