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Finding Opportunity in the Retail Technology Transformation

retail technology

A version of this post was originally published on AcuScheduler.com.

The retail industry is undergoing radical transformation today, and retail technology is at the center of it all. While we all know the growing numbers behind e-commerce – According to a recent report by Market Track, 78% of younger shoppers (ages 18-29) said they preferred online shopping over the in-store retail experience. Furthermore, Forrester predicts that online sales in the U.S. will grow at an annual average rate of 9.32% over the next five years, and studies suggest that worldwide e-commerce sales will account for approximately $3.6 trillion by 2019. – What’s more interesting is the picture being painted, where online and in-store retail merges for a complete omnichannel experience.

In 2015, e-commerce sales made up only 7.4% of the world’s total retail market, and it is believed that even by 2019, they will account for no more than 12.8% of the retail market. E-commerce changed the way we shop, yes, but in-store shopping is alive and well.

In the words of Salesforce, we are experiencing a “retail renaissance”, in which savvy companies have an unprecedented opportunity to thrive in a dynamic and changing marketplace. And we find it absolutely fascinating to be a part of the transformation, implementing retail technology that is powering both online and in-store experiences.

The Retail Renaissance – Merging Online and Mobile Solutions with the In-Store Retail Experience

Very quickly we’re witnessing a strategic shift in not only how physical stores operate, but also how online shopping is optimized to meet customer needs. More and more in-store, online and mobile shopping experiences are emerging. Welcome to omnichannel commerce.

Omnichannel commerce is the idea that the customer gets the same experience wherever they access a service, whether online or in a physical store. The omnichannel approach to retail is why you may notice online retailers adding physical stores to their strategy, while physical retailers expanding e-commerce.

“For omnichannel retailers, websites and mobile apps are not just a means of ordering: They are front doors to their stores. They offer inspiration and community, and they function as test labs, help desks, purchase points, pickup and return locations, and shipping centers,” as explained by Bain & Company.

Converting Online Customers to the In-Store Retail Experience

Many online retailers now offer another solution for buyers looking to expedite the sales experience, but also prefer to see products in-person before making their online purchase. For example, over the past few years, Gilt.com (known mostly as an online-only retailer) offered the option to schedule in-person appointments that merge the in-store retail experience with online shopping.

A unique spin on a showroom, members note the occasion or pieces they’re shopping for, the Gilt personal stylist pulls the appropriate pieces ahead of time, and assists the customer in selecting the best items for their event, personal style, and budget. Through these shopping appointments, they offer exclusive Gilt members a super-personalized approach that gives their stylists the opportunity to get to know their clients and communicate in-person, leading to more sales and bigger sales.

Artificial Intelligence and Virtual Reality Retail Technology is Here

Artificial intelligence (AI) as a trend has the ability to change the way we all do business. And retail customers seem to be on board, too. “70% of US millennials, and 62% of millennials in the UK, say they would appreciate a brand or retailer using AI technology to show more interesting products. Furthermore, 72% and 64%, respectively, believe that as the technology develops, brands using AI will be able to accurately predict what they want,” as detailed in research by Sonar.

Here’s how AI works to deliver a personalized retail experience: When a shopper visits an AI-powered e-commerce site, like one created with the Salesforce’s AI tool, Einstein, the site uses data on the shopper to create a completely unique experience personalized for them and their interests. So, when you think that a brand has 200,000 regular customers, there could conceivably be 200,000 iterations of their website personalized to each shopper. Not only helpful for e-commerce, now thanks to AI, retailers also have a better understanding of how their shoppers purchase, and can make better decisions about product bundles, deals and store planning.

Another digital trend emerging for the retail space is virtual reality (VR). The number of active VR users is quickly growing, and expected to reach 171 million by 2018. Retail stores including Tommy Hillfiger, Lowe’s, and The North Face have already launched VR shopping experiences. VR gives customers a realistic environmental preview of the products they are looking to purchase, such as furniture arrangements, garden installations, camping gear, etc.

John Vary, innovation manager at retailer John Lewis, explains: “[VR enables you to] bring the catalogue and rooms to life. Putting people in the center of environments makes e-commerce more immersive, and will have a big impact on selling bigger items like furniture, as it will give them confidence to purchase.”

With the retail environment transforming so quickly, from the in-store retail experience to online retail, we will soon find out what works and what is just a passing trend. One thing is for sure – customers are wanting change, and the retailers that implement strategic improvements quickly will be those that succeed.

What could be next? Comment and let us know.

About Ginny Torok Duwa
Ginny is Managing Director at Kadence Digital. She is dedicated to marketing that makes a difference and gets excited about quantifiable results. She has a specialization in marketing operations and lead generation.
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