After a bumpy 2020, what can the retail world expect for 2021? We examine the most relevant tech trends and their implications for the retail industry.

AI, Personalization, Technology, Retail

Retail has never been a ‘one-size-fits-all’ game. There’s a huge variety of specialities, sizes, sectors, and channels involved. Retailers operate online, offline and in a varying blend of the two. During COVID, some retailers have faltered or disappeared while others have thrived. But there’s one thing that all retailers have in common: the need to keep up with tech trends in their industry. In this article, we’ll examine 2021’s leading retail tech trends.

 

6 Tech Trends Shaping Retail in 2021

In retail, keeping up with the latest trends is vital. Margins are low, changes happen frequently, and competition is fierce. Anything that gives an edge is important. And with customers expecting an increasingly rich (and individual) interaction, anything that can help retailers understand, manage, and meet customer expectations is valuable. So, with that in mind, let’s look at six key retail tech trends for the upcoming year.

 

1. Mobile + Customer Loyalty = A Perfect Match

We don’t need to go over the statistics to know that people love mobile. So, a marriage between another beloved feature – loyalty programs – and mobile apps is a match made in heaven. Not only do mobile apps allow people to see and use their loyalty points on the go, but they also enable retailers to provide personalized, location-based deals and incentives to customers. This caters to customers’ desire for unique interactions.

When done right, mobile apps can really make a customer’s experience special. Consider the World of Hyatt app; sure, it allows customers to track their point balance, explore various Hyatt properties, and book a stay. But it goes beyond that, offering personalized in-app check-ins with digital key service, customized check-in times, and room upgrades. And it adds an especially nice touch by including curated meditations from Headspace and other wellness options. Not only is Hyatt positioning themselves as a convenient, tech-friendly brand, they’re also showing a sensitivity to the especially stressful times their customers are experiencing.

 

2. Immersive Shopping Experiences Will Grow

Online shopping shows little sign of flagging, even with many places loosening COVID restrictions. In the last few years, we’ve already seen big names like Amazon offering augmented-reality shopping; if you’ve looked at furniture recently, you’ve probably been prompted to virtually ‘place’ a chair or sofa in your room to see how it will look.

However, look for AR to get more personal. We’ve already seen Kohl’s offer their Snapchat-based Augmented Reality (AR) Virtual Closet, which allows customers to create outfits from their favorite brands. We’ve also seen several beauty brands (including Chanel, Garnier, MAC, and L’Oréal) turn to AR-fueled virtual makeovers and makeup trials.

Once again, we can see a shift towards personal, immersive experiences. This not only makes retailers more accessible for people who have cut back on in-person shopping, it makes the entire experience more enjoyable.

 

3. The Rise of Repurposed Retail Real Estate

As online shopping and contactless pickup continue to become more popular, huge retail spaces are becoming less feasible. The costs of running such establishments are high – and that’s before we look at real estate prices. So, we can expect to see a few things happen over the next couple of years:

  • Some stores, like supermarkets, will adopt something of a hybrid model. There will still be foot traffic, but there will also be a large number of employees or personal shoppers picking orders for delivery or curbside pickup. Thus, the interior space may change somewhat.
  • A few stores may transform into different venues altogether, such as healthcare facilities, office spaces, or community centres.
  • Other stores will shift from a strictly retail setting to retail edu-infotainment, where the goal is showcasing products and providing a curated experience rather than outright sales.

For example, London’s Samsung KX is billed as a 20,000-square-foot “digital playground”. The company’s website describes it as “a place of discovery, where people can interact with cutting edge innovation and the local community […] sharing events and workshops, providing a breadth of experiences available to all. The stage and its unique main screen will be used to host performances by local talent, film nights, and immersive wellness classes. The kitchen, powered by Samsung’s latest connected offerings, is ready for everything from mixology sessions and cookery masterclasses to supper clubs as well as a dedicated space kitted out with best-in-class gaming experiences.”

Obviously, Samsung is using this as a chance to promote its products, albeit in a less overt manner. After trying a few gadgets out, it’s a safe bet that at least some people will be ordering them online later on.

 

4. Physical Stores Will Embrace Digital

Aside from location-based offers that customers can receive while they’re in a physical store, there are many ways that we’ll see a blending between the digital and physical worlds in various retail outlets. Here are the current frontrunners:

  • Contactless payment using digital wallets (like Google Pay or Apple Pay).
  • Cashierless stores like Amazon Go.
  • Self-serve stores and kiosks in stadiums, gas stations, etc.
  • Smart shopping carts that allow customers to scan items as they put them in their carts and pay when they’re done shopping – thus eliminating trips to the checkout lane.

There’ve also been some rather esoteric entries to this category, like AI shop assistants and shopping carts that help people locate items. These haven’t hit the same level of acceptance as the others (yet), but they serve as a good indication that even the most brick-and-mortar shopping experiences are being tinged with digital. For more details on how cashier-less stores and other hybrid shopping experiences work, see this post.

 

5. Closing In on One-to-One Hyperpersonalization

Although one-to-one personalization is the dream of all marketers, it’s an elusive goal. For one thing, some of the technologies that enable closer personalization (e.g. beacons, certain types of mobile data, IoT sensors, etc.) also come with thorny privacy issues.

However, recent advances in cognitive technologies will help retailers move closer to true hyperpersonalization. Natural Language Processing, sentiment analysis, machine learning, and other techniques currently allow retailers to process huge amounts of unstructured customer data. This data – from online and store-app activity, social media, and other sources – can help retailers understand customers’ needs, concerns, the current stage in the buying journey, and more. Retailers can then leverage this understanding to deliver deeply targeted messaging and more personal interactions.

 

6. Delivery Will Be Redefined

A number of factors have reshaped how products get to buyers. As we’ve already discussed, people expect personal service across touchpoints. And, thanks to Amazon, Walmart, and other giants, they’ve also gotten accustomed to fast shipping as a right, not just an expensive option. Add to this the rise in curbside pickup, grocery delivery, and other formerly alternative fulfilment options that COVID has prompted; it’s easy to see that delivery is being reshaped into a different model.

In the future, this may mean widespread drone delivery, airborne delivery centres, and other speedy, customizable delivery methods. For grocers and department stores, the natural evolution of curbside pickup may find physical stores delivering to customer’s homes. Taking a cue from pizza places the world over, we could see delivery persons for grocery stores and other retailers become the norm as they attempt to compete with the likes of Amazon’s two-hour delivery option.

An important factor in Delivery 2.0 will be the supply chain; it will be essential to have inventory available and processes optimized for the fastest possible service. This will have a ripple effect that will touch not just consumer-facing retailers but also their partners and suppliers. Everyone along the line will be looking to ramp up speed and efficiency while reducing costs and increasing visibility across the entire network.

 

What Retailers Can Expect in 2021

Without a doubt, COVID-19 was the main event of 2020. While many retail tech trends were in their infancy, the pandemic sped up their growth, adoption, and acceptance. We can expect to feel the effects of this change throughout 2021 as well.

Retailers that managed to adapt to new tech (and procedures) during COVID have already gained some experience in adapting on the fly. This will serve them well in the coming years. Others, who perhaps didn’t adjust as quickly, should start working towards a more agile outlook. The future of retail is changing, and so is the technology that’s powering it.

Authored by: Dr. Anil Kaul, Co-founder and CEO of Absolutdata

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