Digital transformation never seems to stop, does it?
It can be hard to keep up with each of the latest trends and breakthroughs that are set to change the way we live our lives, each one bringing with it new opportunities and challenges. High Street businesses are always looking for new ways to incorporate these technologies into their organisations to meet the rising expectations of consumers and optimise operations.
Failing to adapt means falling behind the competition and their superior offering, both in the physical and digital spaces.
57% of retailers are already planning to increase their spending on software in 2024, hoping that the technology at hand will assist their aims of redefining how consumers interact with brands. Brands can still take the necessary steps to invest in critical pieces of technology and achieve greater retail success. We’ve narrowed it down to 5 innovations to invest in, with each one bringing its own benefits in guaranteeing heightened performance right across 2024.
1. Artificial Intelligence
Quite simply, artificial intelligence (AI) is ‘the big one’. By 2032, the AI in retail market will reach $45.7 billion in value, showing it’s clear trajectory in terms of wider adoption. It’s ability to both create and analyse incomprehensibly large datasets is a major asset to any business looking to find out more about how customers are interacting with their services. Data alone is a powerful ally, but when backed up with AI, its usefulness is expanded greatly.
One of AI’s strengths lies in its ability to create a ‘hyper-personalised’ experience for customers. By analysing existing customer data, interactions can be automated, personalised recommendations can be provided, and offers that resonate more with each individual customer can be given. Creating a more personalised experience means 60% of customers are more likely to become repeat buyers and remain loyal to a particular brand.
Analysing the plethora of customer data enhances the capacity to better predict trends and demand, allowing a more efficient way to manage stock levels. Alleviating the potential problem of either overstocking produce and letting it go to waste, or understocking and creating a ‘stockout’, helps to protect the bottom line and satisfy customer demand.
Those insights can also alter store layouts to make sure popular products are readily available along the more common customer routes around the store, while also influencing pricing strategies depending on competitor price changes and its current market value. With 47% of consumers now ‘shopping around’ more to compare product prices, the flexibility of changing prices can help to keep High Street brands competitive.
AI’s usage in customer interactions can extend to chatbots and natural language processing (NLP), which helps to produce real-time responses to a customer query. These bots can be active 24/7, ensuring that no customer question is ignored and providing a far more effective customer service. Thanks to machine learning, these chatbots can learn from each interaction and provide more effective answers to help customers, no matter where they are in their buying journey.
80% of retail executives anticipate that, by 2027, AI-powered automation will be a firm fixture in their operations. The use cases of AI in retail are numerous, as it plays a part right across the buyer journey. That added personalisation for each interaction plays a key part in how retailers create a seamless experience for their customers – whether online or offline.
2. Omnichannel experience
73% of consumers use multiple channels during their buyer journeys, relying on an omnichannel experience to both browse and purchase products. The combination of physical and digital, otherwise known as ‘phygital’, means breaking down existing silos between the two realms and creating a seamless experience that gives consumers the ability to both browse and purchase in each one. It has now become an essential part of a successful retailing strategy.
Even though 54% of consumers decide to make the final purchase while in-store, eCommerce is becoming an integral part of the modern-day shopper’s experience. Buy online, pick-up in store (BOPIS) is a rising trend among consumers, with 60% of customers having used BOPIS and happily taking advantage of the online/offline combination. Businesses can satisfy the growing desire of consumers to have a convenient, less stressful shopping experience and avoid the disappointment of arriving at a store and finding the product they want is out of stock.
It’s all about keeping pace with customer preferences, primarily over their preferred choice of channels. Integrating these channels and connecting touchpoints is crucial in that seamless experience omnichannel retail seeks to create, while also remaining consistent regardless of the point of contact. These touchpoints further personalisation efforts by collecting customer data and building a more complete profile of behaviours and spending patterns. With data being shared between each channel, that consistency can be captured with ease.
What makes an omnichannel approach to retail so valuable is how it’s a customer-centric process and is built to give consumers the most convenient journey possible. By bringing each channel together, brands have a more accurate picture of the customer journey itself, from awareness right on up to the purchase itself. These businesses want to maximise customer lifetime value (CLV) and retain their customers, which can be achieved when unifying the shopping experience. Engaging customers on their preferred channels with precise product recommendations boosts overall customer loyalty and retains their business. With nearly two-thirds of consumers citing convenience and ease of purchase as a top factor in how they spend their money, an omnichannel experience is crucial in standing out from the competition.
The unification of the physical and digital elements is an investment that retailers are looking to explore to reach more customers across numerous channels. Of course, there are other technological breakthroughs that are set to continue changing the nature of the retail landscape – a fully immersive shopping experience can completely change how consumers interact with brands.
3. AR and VR
While AI leads the way in terms of digital retail transformation, augmented reality (AR) and virtual reality (VR) are following behind at a much slower pace. Of those who use VR technology, 51% primarily use them for video games and movies; 32% use it for purchasing products. Despite its usage being prioritised elsewhere, extended reality is beginning to become part of the modern-day retail experience, taking eCommerce in a whole new direction.
Whie VR puts people in a 3D environment via a headset, AR superimposes digital content into the real world. Both technologies can be used in traditional retail environments and in the comfort of one’s home and are instrumental in providing an edge when enhancing the shopping experience. Scrolling and browsing can now be moved into real-world scenarios, giving consumers a brand-new way to ‘try before you buy’ and personalise products that makes each interaction more engaging.
Definitive evidence of how items look on their person or in physical spaces reduces the prospect of items being returned and customers feeling disappointed. AR and VR changing rooms also compliment the changing nature of consumer preference, with 65% of women and 54% of men less comfortable with physical fitting rooms in the wake of COVID-19. Rather than just play it by eye and eventually end up returning their purchases ($761 billion in sold merchandise is returned in just a single year), AR/VR-powered fitting rooms eliminate this risk to revenue.
Both AR and VR can change the way that customers interact with stores themselves. Consumers can take a virtual store tour and navigate around a 3D model of the store itself, interacting with products and placing them in a virtual basket for later purchase. High Street businesses can prioritise certain parts of the store that resonate more with customers (again, personalisation is key), or promote certain products that are on offer. AR can give customers a new way to interact with products as well via their handheld devices, as products can be scanned and provide additional information such as reviews and other features. Customers can then make more informed purchasing decisions an improve their own shopping experience.
By 2025, almost 75% of the global population will frequently use AR technology, and 70% of consumers who visited a virtual store made a purchase. Both pieces of technology will make a significant impact on the retail industry, redefining how consumers purchase, and interact with, products. With AR and VR changing how consumers perceive a store’s layout, that same layout is being transformed as well through the rise of the Internet of Things.
4. The Internet of Things
The ‘smart store of tomorrow’ is within reach, and the Internet of Things (IoT) is helping to lead that charge. An interconnected system of devices that share real-time information can revolutionise how retailers operate and find new, more efficient ways of giving consumers the best experience possible. Thanks to data, retail leaders can create a more holistic view of their customers and better understand their most basic needs and behaviours, taking customer experience to new heights.
Radio frequency identification (RFID) tags, weight sensors, and even cameras themselves can help to create a smart shelving solution. Inventory management can become more streamlined as employees receive alerts when sensors detect that shelves need to be restocked. Businesses can save themselves unnecessary costs, and lower the chance of wasting produce, as real-time data can protect them from both overstocking and shortages. These technologies, particularly cameras, can also deter potential thieves and act as a key strategy in loss prevention. With 5.6 million shoplifting incidents recorded in 2023, more must be done to safeguard stock.
IoT devices can also aid in visualising the flow of customer traffic, estimating dwell time across stores, and even optimise store layouts. With retail footfall falling 4.2% between 2023 and 2024, businesses need to find innovative new ways to maximise the return from customers that are shopping in-store, making real-time data sharing vital. Sensors can monitor customer foot traffic and create a clearer picture of popular times to shop, allowing retail leaders to adapt staff numbers efficiently during peak and off-peak hours. Thanks to cameras and the capabilities to create a ‘heat map’, store layouts can be better structured to ensure popular products are place more strategically and boost the chance of making a sale.
Of course, maintaining the quality of produce is a crucial part of the retail process, with the Internet of Things having the ability to monitor equipment health and better predict when maintenance is required. Thanks to sensors, monitors, and machine learning algorithms, disruptions to machinery, including refrigeration units, can be anticipated and critical repairs can be carried out without threatening lengthy downtime. Maintenance costs can be reduced by 18-25%, while also better managing energy consumption and extending equipment life that guarantees an improved ROI on each piece of equipment.
The most popular example of IoT in retail are self-checkout systems, which incorporates a point-of-sale (POS) terminal alongside scanners, sensors, and cameras to streamline the purchasing process. Their rise in popularity is down to their ability to cut down on the amount of time customers spend waiting to pay for items and give staff more time to undertake more pressing tasks, including stocking shelves or helping customers who need more assistance.
The next step in self-service is to bypass checkout altogether – no, we don’t mean stealing. Through an app that supports checkout-free shopping, cameras with image recognition software identify the items a consumer places in their basket, which are paired with sensors and RFID tags also helping to build this virtual cart. Once they exit the store and pass through the sensos, the linked payment method is automatically charged. The hassle of waiting is permanently cut out, and customers can enjoy a much smoother shopping experience.
The global IoT in retail market will reach $35.5 billion by 2025, and won’t slow down from there. These real-time data sharing devices help to craft a more accurate view of each customer and their specific preferences. The technology is ready to be taken full advantage of, yet despite all the benefits and efficiency an IoT-powered store can bring, it only comes together with robust connectivity.
5. Network infrastructure
Without a strong foundation, things can start to crumble quickly. In an industry like retail that runs on customer satisfaction and providing a seamless experience, an unreliable network can put it all in jeopardy. As digital transformation continues at a fast pace, it’s down to retailers to implement a network that can support this influx in technology and guarantee a service that runs smoothly.
A resilient network protects the High Street from the ever-present danger of downtime, which causes havoc whenever it strikes. Retail businesses can experience over 80 hours of unplanned downtime each year, bringing with it damage to their reputation, bottom line, and ability to utilise data. As customers now expect to be able to interact with brands both in and person and online, constant connectivity must be a priority when providing the service that customers expect.
By relying on a greater number of solutions, particularly IoT solutions and their real-time data collection capabilities, that resiliency is paramount. Not only does this stretch to the direct touchpoints with customers, such as POS terminals, but right across the supply chain as well. Warehouses are becoming more automated, with some brands, for example, now employing fleets of robots to move inventory and guarantee that deliveries are made on time. When that connectivity is lost, the supply chain is disrupted, and operations start to grind to a halt.
Retail enterprises now operate across multiple locations, and require a heightened level of connectivity to make sure they can prevent downtime, or at least limit its damaging impact. Cyber security is a rising concern for today’s modern-day organisation, and solutions such as secure access service edge (SASE) now give these security conscious businesses the means to combine security and networking into one holistic approach. The cloud offers the route to attaining both a better network and an easier way to manage cyber security. Annulling the impact and occurrence of external threats provides a better chance of avoiding downtime, and subsequently protecting the bottom line and retaining their customer’s trust.
Outages cost the UK economy £1.3 billion in 2022 alone, clearly showing just how damaging the failure to implement a more resilient network infrastructure can be. By taking the right steps in building these firms foundations, High Street businesses can safeguard their operations and guarantee that uptime which makes them stand out from the competition. But there is one question – how exactly can a brand construct that network infrastructure?
An MSP who is on your side
To obtain that retail success in 2024, retailers can invest in a whole host of different technologies and solutions to create an enterprise that is functional and can meet the rising expectation of consumers. Embracing a greater degree of digital transformation can help deliver that experience customers yearn for, and better understand what can be done to continuously improve the service they provide.
The network brings it all together, and by partnering with a managed service provider (MSP) like Gamma, High Street businesses can start to fully benefit from a resilient network managed by working alongside a proactive partner. With end-to-end network management, 24x7x365 support, and a reputation of being reliable, partnering with an MSP like Gamma is a smart choice for any High Street business looking to re-imagine their business communications.
Those network foundations are crucial to retail success; once in place, 2024 is yours for the taking.