Retail is changing. New technologies are emerging that promise to help the industry streamline its operations, cut costs, improve customer service, and create new sales and marketing strategies. Here are five of those technologies.
An instance of technological change in retail centers around a new phrase: "conversational commerce," where AI-powered chatbots help customers with their shopping experience. Companies like Taco Bell and clothing company H&M have been using chatbots. In fact, H&M recently teamed up with the Weather Channel and cosmetics store chain Sephora to launch a chatbot on Kik messaging app.
Research conducted by Google shows that an increasing number of consumers use their smartphones while shopping in store to help them with their purchases. The more they use their phones to shop, the more they'll buy. Chatbots are available to answer shoppers' questions quickly and succinctly, improving over time, eventually becoming hard to distinguish from store personnel.
Ecommerce Anti-fraud Tools
As credit cards become more difficult to counterfeit and data theft is now an epidemic, ecommerce fraud is no the go-to for criminals targeting retail. According to global information services company Experian, e-commerce fraud rose in 2016 by at least 15 percent over the previous year. Extending beyond the EMV chips and payment terminals that took off in 2016, an increasing number of payment card companies like Stripe and Mastercard are introducing artificial intelligence (AI) to flag signs of fraudulent transactions to prevent it before it occurs.
Blockchain and Bitcoin
Two technologies that have had a bumpy start in their relationship with retail are blockchain and Bitcoin. Blockchain, which may be most significant in the supply chain and ecosystem applications, is a public ledger system that enables businesses to publicly manage and track their digital transactions. Companies in the vanguard of blockchain technology include Provenance, BlockVerify, Ascribe and Everledger. Wal-Mart has entered into a partnership with IBM and China's Tsinghua University on a project using blockchain to track pork and produce transactions in China and the U.S.
Bitcoin is a digital currency that uses blockchain as its underlying ledger. Though retailers aren't enthusiastic about doing business with individuals in bitcoin due at least in part to its value volatility, an increasing number of companies have chosen to deal with bitcoin, either as merchants or payment processors. The first company in fact to have accepted bitcoin as a payment was Overstock in 2015. Since then the list of companies that accept bitcoin has grown substantially. Just a few of those companies include: Subway, Microsoft, Lionsgate Films, Bloomberg.com, Whole Foods, and Wikipedia.
Retailers have found that one way to make the shopping experience as seamless as possible is to accept mobile payments. Customers have yet to catch on, however, as only 10 percent have claimed to use their mobile devices to make payments at point of sale. 42 percent of customers, moreover, have never made a payment on their smartphones using their mobile wallet.
The game changer may be Apple's recent peer-to-peer payment product, Apple Pay Cash. By broadening the base of iPhone owners setting up Apple Pay, retailers will see greater adoption in store as well, leading to more retailers accepting Apple Pay, and so on. Mobile payments should finally reach their tipping point in 2018.
Improving drone technology has made the concept of drone deliver almost cliche in 2017, but it has yet to catch on, delayed by logistical challenges and the pace of smart city planning. The FAA announced they wouldn't be passing regulations regarding drone delivery services for a while, making the skies above a virtual wild wild west. It's also difficult for drones to maneuver their way over crowded cities, which is necessary for last-mile deliveries. Nevertheless, companies have expressed an enthusiasm for drones. 7-Eleven and Flirtey, in fact, made several drone deliveries in Reno, Nevada last November.
Amazon, a pioneer in the drone delivery movement, has received drone patents. One is for an airborne fulfillment center, an airship where drones could take off, dock and recharge. Amazon also made its first drone delivery in the United Kingdom last year. Experts predict, however, that retailers will probably use drones in stores before they use them to deliver products to customers' doors. They also predict the retail industry may begin to feel the real impact of drone use in 10 to 20 years.