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Shaping the future of retail

By Retail Technology | Friday January 14 2022

Retail technology has really come to the fore during the pandemic as companies pivot to survive and thrive. But what will be the key tech trends in 2022? Validify CEO Fergal O’Mullane gives his take.

Working with hundreds of innovative SaaS vendors means that I get an in-depth insight into the latest and greatest technologies on offer to the rapidly changing retail industry. Here are 3 major technology trends that I believe are set to skyrocket in 2022 and reshape the future of retail. These are all technologies that I am particularly interested in and in my opinion, critical for retailers to consider for their business planning and strategy next year. 

Retail technology trend #1: Smart selling

The pandemic has been the catalyst for many changes in retail and 2022 will finally be the year retailers get to grips with digitising their entire operation. Stores will no longer be just outlets, but will be transformed into mini distribution centres, enabling on-demand (and almost instant) delivery options. Same day delivery and even same hour delivery will become the norm. 

Innovations in retail technology by vendors such as Mercaux, Proximity Insights, Sizebay and Newstore will transform the customer experience in-store by enabling sales staff to access customer data in an instance such as purchase history, size info and their preferences. Customers will also benefit from augmented experiences to help them find the right product.  

Ecommerce technologies like Appointedd, Qudini and Go Instore will continue to lead a surge in remote selling and empower store staff to engage with customers online via video links to help them with their purchase decision. This has already transformed conversion rates for many brands selling high value or complex products online. 

Digital transformation is allowing retailers to have a real time view on inventory, enabling them to track, monitor and optimise their entire supply chains, which ultimately is needed to deliver a superior customer experience. Fabric and Plytix are two examples of companies helping retailers set the right foundations with their product data.

Consumer choice will be at the centre of all of this, with increasingly more methods to purchase goods conveniently being presented, either online, contactless in-store or BOPIS (buy online pickup in store). Consumers will even be given the option to purchase more sustainably or offset their environmental impact. Micro-fulfillment will become more important to businesses to operate efficiently, and blend ecommerce expectations with in-person ones.

Smart shelves and frictionless checkouts will completely transform the grocery sector. 2022 may not be the year it becomes apparent to everyone, but it’s definitely the year the race will start in earnest. Amazon and the big grocery groups will be battling it out, whereas smart shopping carts and personalization will become essential for the customer experience online. A recent study by Epsilon noted that 80% of consumers are more likely to buy from a company that provides a tailored experience. Those that fail to offer these basic needs for consumers will soon fall behind their competition.  

Retail technology trend #2: Elevated customer experiences

Retailers are waking up to headless commerce and microservices to help future proof their systems architecture and deliver customer experiences that consumers expect across all channels. Forrester stated 22% of software decision-makers who aren’t already deploying commerce platforms via software-as-a-service plan to do so in the next year. Investing in modern commerce architectures and agile software based on MACH principles (microservices, API-first, cloud-native and headless) will benefit both the employee and consumer by increasing flexibility and the features that can be made available.  

If you don’t have an omnichannel strategy in place yet, you’d better have it planned for 2022 as consumers home in on their data privacy and how their information is handled, or not handled! If you don’t remember your visitors and their preferences, or tailor content for them, you’d better have a rethink as investing in loyalty and retention will be the focus for 2022 and beyond.

Phigital platforms and technologies are already in full swing such as live chat, video consultations and community platforms, and Covid has accelerated this further with Augmented Reality (AR) technologies taking the centre stage in ecommerce and in store more recently. Many retailers are already experimenting with these technologies to improve the customer experience and offer more immersive shopping experiences, such as virtual tours of stores and product demonstrations. Now folks can see their future sofa, or new wallpaper in their living room without leaving the house. Customers can go clothes shopping online, use virtual changing rooms and customise their looks by simply selecting new colours or accessories. 

Alternatively, those that venture in store can expect to see more experiential technology at play. For example, at Gymshark’s first physical store they boast having workout studios, and Wren Kitchens now offer its customers a virtual reality experience to see their new kitchen design. Technologies offered by Wren Kitchens, Charlotte Tilbury and Gymshark enable consumers to ultimately make better informed decisions, experience something better and purchase goods with confidence. AR is an exciting stepping stone towards Virtual Reality (VR) and the Metaverse which will come into greater focus over 2022.

Retail technology trend #3: Sustainable software

Sustainable retail is rapidly climbing up every brand’s agenda - and nobody wants to get caught on the wrong side of this story! It’s imperative for retailers to have a clear policy and strategy for more sustainable solutions, and retail tech can be the saving grace. Electric powered delivery vehicles for instance helps with last mile and supply chain improvements, as opposed to diesel or petrol distribution methods, and we’ll see more retailers following Tesco’s recent switch to electric in 2022 and beyond in the strive for net zero. 

Retail software can be used to optimise delivery routes, create more pickup points such as Collect+ for buyers and radically reduce the shipping required. Personalization also plays a key role here to reduce wastage, lessen returns and estimate how much to produce. A whopping £3.9bn of online purchases are expected to be returned or exchanged just over the festive holiday in the UK during 2021. So, retail technologies such as Mallzee help to combat this, by reducing the rate of failed product lines with vigorous testing and data insights before going into mass production. During ‘Take-back’ Monday in 2021, 61% of online shoppers returned clothing and 35% returned footwear - further illustrating the dire state of the fashion industry and the need for more sustainable retail solutions. It’s not all doom and gloom though, some innovative solutions like Dressipi and Rent the Runway are creating new buyer habits and avenues for those who like to keep a fresh wardrobe. Dressipi uses fashion-specific Artificial Intelligence (AI) and machine learning to help retailers meet shopper expectations and increase their revenue. 

The use of AI and Machine Learning will continue to increase in the retail industry throughout 2022. Retailers are already using AI technologies to improve product recommendations, personalise marketing messages, and detect fraudulent activities. In the future, we can expect retailers to use AI for a wider range of tasks, such as forecasting demand, optimising inventory, and providing customer service, enabling retailers to become more efficient and effective in their operations, which will ultimately lead to a better customer experience.

There’s also a big shift taking place amongst retailers following the disruption of Covid and Brexit, which is leading to partnerships forming and the consolidation of assets such as warehouses and store premises. Just look at Next for example, who now house multiple other brands like Calvin Klien, Victoria’s Secret and Lipsy - a more environmentally friendly solution than storing and shipping items from separate warehouses or stores. I expect to see more of these collaborations emerge in 2022

 

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