With the advancement of technology, the industry has completely changed the way they conduct their business and provide services. The industry which is highly impacted due to this is the retail industry. A study conducted by Guardian shows that 1 in 12 stores in the UK has closed over the last five years. Technology has changed consumer behavior to an extent, and people are looking for ways to make their shopping experience better.
This has also increased the competition between online and in-store shopping. It is no secret that technology has favored online and mobile shopping, making it harder for in-store retailers to attract and maintain more customers. This has negatively affected in-store shopping. Study shows that 896 stores were closed with the onset of technology in 2016.
Impact of technology on retail
Trends of digital technology used in retail
How technology transforms the online and in-store shopping
Technology has influenced the way consumers shop. It has opened new doors and has overcome many hurdles to enhance their shopping experience. Many brick and mortar stores are currently adapting to this new necessity. In this article, we will look at the impacts of technology on retail and also, discuss the elements that have played a part in transforming online and in-store shopping.
Impact of Technology on Retail
As discussed above, technology has revolutionized the thinking and shopping behavior of customers. People are opting for ways that make purchasing easier and enjoyable. With the onset of technology, more and more people are gravitating toward online and mobile shopping. According to E-commerce trends, 51% of Americans said they preferred online shopping in 2017. This is because online purchasing is convenient, time-saving, and increases the accessibility of a wide range of products among consumers.
On the contrary, brick and mortar stores are adversely affected. According to Forrester, 41% of in-store sales would be impacted by the internet in 2022. The traditional shopping medium is facing many challenges with the growth of online shopping. However, many in-store retailers are embracing this change and bringing new technologies to upgrade their services. They are mixing the palpability of traditional shopping with the expediency of E-commerce to bring back customers and create a better shopping environment. Study shows that malls are making a comeback among young Gen Z buyers with the promotion of this multi-channel strategy.
Trends of Digital Technology in Brick and Mortar Stores
Retailers are always looking for ways to connect with their consumers and creating a customer-centric shopping environment. Even though the E-commerce era has increased the competition between brick and mortar stores and online stores, it has always brought new opportunities for retailers. Many retailers are promoting new technologies in their stores, such as the use of mobile phones during shopping to avail coupons and discount codes, or determine whether they have a particular dress or not. This is redefining the traditional stores and setting an exceptional experience for customers. Study shows that 86% of retail sales are generated in-store. Here are some of the most common tech trends used in stores.
QR codes are pretty in these days. It was first introduced in 1994 by a Japanese company and is used today for various purposes. Customers can easily scan the QR code on their phone and get additional information about different products. You can even make purchases and payments through it. This makes shopping easy and convenient and allows consumers to have an ultimate shopping experience.
- According to a survey, 1.7 billion coupons were obtained via QR code in 2017.
- 26% of the Americans use QR code in 2014 while it is estimated that 11 million households in the US will scan a QR code in 2020.
It is no secret that more people are relying on their mobile phones to get most of the work done. Retailers have used this to their advantage and have introduced a mobile wallet to increase the convenience of customers. Mobile wallets allow customers to make payments through their phones by placing it over a scanner and deduct the amount from their prepaid account.
This has enabled many retailers to add a mobile wallet to the list of services provided on their app. Customers especially love this technology as it saves them from standing in the cashier queue allowing time-saving checkout. Moreover, many retailers also present rewards, promo codes, and deals if customers make payments using a mobile wallet. This way, they can save money and have a low-cost purchase.
- The study shows that checkout is 4 times faster through mobile wallets (in Target app) than the regular payment method.
- According to Forrester, 42% of small businesses in the US have accepted mobile wallet as their payment source.
Autonomous Shopping Cart
No one likes to push the shopping cart around, especially when it is too heavy. However, you don’t have to worry anymore as one of the latest tech trends introduced in retail stores and supermarkets is an autonomous shopping cart. These carts are controlled by special sensors that facilitate the carts to follow the customers and allow them to be hands-free. Now, you can easily manage your shopping, focus on your tasks, and take care of your kids without worrying about pushing the cart around. In short, these autonomous shopping carts deliver a complete shopping experience.
- According to a survey, 65% of people said they were satisfied with this technology and will use it in the future.
Customers always complain about the unnecessary delay in checkouts and standing in long queues waiting for their turn. However, many retailers have introduced automated checkout that enables minimum human interaction and easy payment and checkout process. This technology uses computer vision, sensor fusion technology, and deep learning to allow customers to purchase their favorite products and make payments right away. This saves time and enhances the shopping experience of buyers.
- It is estimated that 1000 stores will have an autonomous checkout process by 2024 worldwide.
- Study shows that only 350 stores globally had fully autonomous checkout process in 2018.
Technology Transforming In-Store Shopping
In this modern age, using technology and implementing E-commerce to personalize the shopping experience is an excellent strategy. Retailers are leveraging new technologies to differentiate in-store shopping and making it more relevant among buyers. These technologies can be used to gather data, analyze customer behavior and needs, and using this to present a more convenient shopping environment. Here are some of the technologies that are transforming the in-store shopping.
Use of Mobile Technology
Online and mobile shopping has become one of the fastest-growing expenditures in the retail industry. The software used to analyze customer data is increasing to manage in-store shopping and creating an effective shopping atmosphere. It is found that most consumers prefer shopping at stores that offer mobile technology. Many retailers have adopted in-store mobile experience which allows buyers to avail coupon codes & vouchers and know about the colors and sizes available at the store. This digital transformation of retail stores have generated sales and attract more customers.
- Research indicates that 63% of buyers use mobile phones to compare prices and look for coupon codes and vouchers while shopping in-store.
- 44% of the consumers prefer shopping at stores get offer mobile technology.
The checkout process is hectic and inconvenient. Many retailers have been looking for ways to overcome this and introduce a more suitable process. For this, many are already using self-checkout machines. Even though this is more convenient than the traditional method, many don’t prefer less human interaction-based shopping experience. Another state of the art technology that has completely transformed the in-store shopping is the automated checkouts. These stores are cashier-less and use computer vision, smart sensors, and cameras to track customers and assist in the checkout. You don’t have to wait in line; these automated checkouts charge you once you leave the store which can be paid through a prepaid account or store app.
- According to a survey, it was estimated that retail tech spending will increase from 3.6% to $203.6 billion globally in 2019.
IoT And Robots: Enhancing Your Shopping Experience
With the age of technology, physical shopping has become more about the experience than buying. IoT has enhanced the in-store shopping experience as it tracks the customers within the stores reach and send them personalized messages about the latest deals and coupons. They gather and analyze data on buyer’s behavior and how products are handled. This enables retailers to effectively manage the whole process.
Similarly, robots play a great role in managing and restocking products while also serving as shopping carts. This has increased customer engagement and allowed shoppers to have a complete offline and online shopping experience.
- It is estimated that IoT will reach USD 94.44 billion in the retail industry globally by 2025.
- According to research, IoT was expected to make an impact on retail in 2018 as one of the top emerging technology.
Technology Transforming Online Shopping
The E-commerce industry is consistently growing and attracting more businesses to its domain. This has allowed marketers to expand their reach and connect with audiences globally. At the same time, it has also increased the competition between online stores to boost their sales and make their business successful. Online retailers strive to build their brand image and create a lasting shopping experience for their customers. They are utilizing the top software programs to provide time and money-saving shopping atmosphere for the customers to keep them engaged and committed to online shopping. Here are some of the ways technology is transforming online shopping.
Shopping Through Mobile Phones
It is known that most people prefer mobile phones over laptops for online shopping. Mobile phones are handy and convenient for customers to research different products and make purchases. Online retailers are using this consumer behavior to their advantage. They are using multiple strategies to develop brand engagement and maintain a good reputation among their customers through mobile phones. They are making mobile purchasing enjoyable by offering great deals and coupons and making it informative and convenient for buyers.
- The research revealed that 86 million Americans prefer online shopping through mobile phones.
- It is found that 4 out of 5 mobile phone users research a product or service before placing an order.
Artificial Intelligence And Chatbots
With the growing use of technology, online retailers are employing the assistance of artificial intelligence to enhance customer service and deliver a personalized experience. Many IA is designed to stimulate conversations with consumers online such as chatbots. These chatbots are used to guide shoppers and answer their queries. Moreover, they are used to gather data, analyze customer behavior, predict and influence it, and create opportunities for retailers to automate their businesses. This generates a customized experience for shoppers online.
- According to Gartner, 85% of customer interaction will be conducted using artificial intelligence in 2020.
- 17% of consumers believed that chatbots technology would impact the retail industry in 2018.
In this digital age, social media and E-commerce tech are central to online shopping. Buyers are using multiple channels and social media websites to research, survey, and check reviews on different products and services through their mobile phones. These channels are influencing the decision and purchasing behavior of the customers. This is why E-commerce retailers are building strategies and adopting innovative ways to improve their digital presence on various channels. Utilizing this tech will ensure a boost in sales and increase customer engagement.
- According to UPS Pulse of the Online Shopper, 38% of the buyers made their purchase through multiple channels in 2016.
- According to Forrester, 51% of retail sales in the US were impacted by the digital medium in 2017.
Technology and Shopping Statistics
In-Store Innovations By 2020
|Personalized In-store Messages||67%|
|Biometric Payment Authorization||42%|
|Smart Fitting Room||63%|
The above table shows the predicted innovations anticipated in the retail stores in 2020. Interactive signage technology with 70% and smartphone shopping with 68% is said to make the most impact on in-store shopping.
Retailers Investing In Technology
|Location-based Mobile Targeting||44%|
The above table shows retailers investing in technology to provide a complete shopping experience to the customers. Retailers invest most in data visualization and in-store sensors with 50% and 49% respectively.
Technology Investments on Shopping Channels
The above table shows the technology investment made on the two shopping mediums by retailers. 57% of the retailers invest on both channels while only 22% of them online and 18% of them invest in-store.
The challenges that came with the advancement of technology have the power to transform and revolutionized the online and in-store retail industry. Customers always demand better services and an exceptional shopping experience. This can be provided by using the latest tech trends such as AI and multi-channel shopping in both traditional and online stores. These technologies are the future of the retail industry. Therefore, marketers need to adapt to these changes faster to stay in the competition and generate revenue. The only condition is to have a proper network infrastructure and database to ensure exceptional customer interaction and engagement.