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Retail Technology Taking the Industry by Storm

Posted by Nritya Ramani on August 3, 2017

Technological advances have transformed the customer experience in recent years. As a result of the rapid pace of change, retailers are increasingly placing retail technology innovation at the core of their business strategies to secure their market niche. Artificial Intelligence (AI) is a driving force of these technologies as 87% of retailers plan to use it on some level to drive consumer engagement. 

  • 87% of retailers want to use AI for customer engagement

  • 44% of retailers plan to employ AI as a conversational commerce offering, similar to Amazon's Alexa

  • 52% of retailers are incorporating AI in tracking inventory

  • 42% of retailers want AI to handle returns and exchanges in the next two years

There are a number of emerging retail technologies, and they cover different aspects of the industry, from cost cutting and product suggestions, to customer outreach and brand marketing. The following five technology trends are taking the retail industry by storm:

Mobile Technology

With 68% of U.S. adults owning a smartphone, customers are comfortable using their mobile devices to search for products, peruse through online catalogs, and compare prices. Smartphone users desire both options and accessibility, and the expanding mobile market provides them with a simple platform to conduct online and offline transactions. Mobile commerce is a market that smart retailers are capitalizing on through advanced bar codes and point of sale scanning innovations. 

For example, London-based startup Iconeme, developed a beacon technology that is installed in store mannequins. As customers pass by or stand in front of a window mannequin, the beaconing device sends a signal to the Bluetooth reader in a shopper's smartphone. Thus, customers receive information on the clothes the mannequin is wearing, including colors, sizes, coupons and online discounts.

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The biggest upcoming disruption to the retail experience will be the rapid adoption of alternative checkout methods like mobile wallets. Mobile phones are the conduit between consumers' identity and their bank accounts but shoppers have been slow to abandon their leather wallets. But with wider retailer acceptance and new applications like Amazon Gomobile checkout is set to explode.

IoT and Supply Chain Efficiency 

The Internet of Things (IoT) is facilitating real-time interactions with customers both inside and outside the store. Connected devices help optimize operations in the face of complex supply chain utilities and changing consumer demands. IoT sensors control and adjust equipment settings, detect any malfunctions, and automate manual functions such as tracking products and price flux. This frees up sales associates to spend more time interacting with customers, further advancing the shopping experience.

Radio frequency identification tags (RFID) give merchants and their customers transparency over inventory location and availability while also assisting in a frictionless checkout. In 2013, Wal-Mart lost $3 billion due to out of stock merchandise. As its inventory expanded faster than its sales, the company experienced lower earnings. Wal-Mart now uses radio frequency RFID to monitor its supply chain. The numerical codes can be scanned from a distance to track merchandise moving along the supply route. Wal-Mart is encouraging its suppliers to implement RFID technology as well.

Advanced Video Technology

In 2016, the retail industry was introduced to live video and augmented reality. Customers love taking an inside look into a company and developing a personal relationship with the brand. Its a win-win for customers because they are increasingly comfortable providing their own video input and recommendations. Virtual and augmented reality has broad entertainment appeal but it also immerses customers in a brand experience that solidifies a connection beyond any traditional advertising.

Outdoor apparel company North Face has partnered with virtual reality company Jaunt to give customers a virtual tour of Yosemite National Park and the Moab Desert. Viewers can virtually trek the landscapes alongside athletes Cedar Wright and Sam Elias, thus creating the emotional connection between the customer, the brand and the great outdoors. 

Social Commerce

Social media has grown well beyond vacation and kid pics, now garnering influence over employee recruitment, customer service, product launch, and every aspect of marketing. As retailers learn to love consumer generated content, the opportunity to employ customer purchasing power on social media has finally made social commerce a reality. With photo sharing and likes turning into word-of-mouth marketing, retailers are heavily investing into making web content more shoppable. 

Example: From Facebook to YouTube, buy buttons are cropping up all over the internet. Tech companies want to tap into the $1.6 trillion that consumers spend online, by converting their sponsored advertisements into direct sales. Pinterest itself has more than 60 million shoppable posts using buy buttons.

Chatbots

Data is power, and conversations are the primary stimulus of that power. Chatbot developers recognize this equation, and are changing the way people browse, interact, and communicate over the internet. AI allows evolving levels of sophistication by chatbots, enhancing the relationships they foster and the scenarios they support. New data streams and greater integration across feeds will make AI powered chatbots a priority retail channel. 

Avaamo's chatbots incorporate natural language programming (NLP) to serve as a virtual advisor for beauty advice, warranty information, fit guides, or package tracking. The Beauty Advisor Chatbot for instance, provides customers with tips on skincare and hair care, interactive pick lists, as well as a preference builder.

 

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Topics: Technology, Retail, chatbots, AI

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