5 Innovative Solutions at the Forefront of Retail Technology

Innovative Solutions at the Forefront of Retail Technology

Consumer trends are constantly evolving, and new technologies mean that retailers have an opportunity to create efficiencies, save more money and build products that are more customer-centric. With new technologies come new opportunities for innovation that help both retailers and consumers throughout the retail shopping experience. In this article we’ll be covering five of the top innovative solutions retailers are adopting to grow their business. 

1. Personalisation

Retailers are now, more than ever, able to collect a lot of data on their customers. Thanks to smartphones, integrated payment systems and shopping apps, retailers can gather a lot of information on their customers’ preferences. The hard part is understanding how to make the most of said data. 

Data analysis means retailers can understand what their consumers’ behaviours and needs are. This helps segment the customer journey more precisely, which in turn allows for more personalisation in the shopping experience. For example, using location targeting helps the retailer understand where the consumer is when making a purchase. By analysing that data, retailers can segment that customer as “a consumer who buys from their home”, for example, which might offer opportunities for personalisation (perhaps they are more willing to go to their desktop or read a longer article). 

In general, customers themselves don’t think of personalisation and are more interested in the benefits this offers. Does personalisation mean a shopping experience that is easy, fast and helps them make buying decisions? If so, then the consumer will be for it. Other examples of personalisation could be encouraging customers to build the product themselves (think accessories), or offering personalised discounts and cashback to customers who are regular buyers.

 2. Buy Online, Pick up in Store

Buy Online, Pick up in Store (BOPIS) is another technological solution that has gained popularity over the years mostly due to an increasing culture of instant gratification. BOPIS is a technology that links platforms and devices to inventory and supply chain, allowing physical stores to easily coordinate with online orders.

As customer needs to keep evolving, many demand several delivery alternatives (omnichannel) and want the option to be able to pick up their goods in store. There are several benefits to implementing BOPIS as a retailer. The first is that picking up in store saves money for both the retailer and the customer since they both avoid shipping fees. The second advantage is that consumers can use this tool to quickly see whether a retailer has the inventory needed, and therefore waste less time in the long run. Finally, BOPIS offers an opportunity to increase customer satisfaction by providing stock availability and fulfilling it correctly. This simply means that retailers can improve their customer experience tenfold by offering all the information on their website and having the inventory ready when the customer comes to the shop. Having said that, one negative experience can lead to the loss of a customer. 

3. Augmented Reality

There’s been a lot of hype about Augmented Reality (AR), however, we still feel AR has a lot of potentials to take retail to the next level. Some use cases of AR being used in retail are tools that allow consumers to scan an entire shelf in-store and easily compare product details. Another use case is virtually trying on products. Companies such as Sephora are allowing mobile app users to try makeup on in real-time through filters. Lacoste is also using this feature by encouraging customers to virtually try on shoes. This not only works for clothes, but also for home products. Magnolia Market is using AR to help customers visualise products in their homes before buying. 

This may sound like a lot of investment in technology with uncertain ROI, however, retailers can use AR not only to make shopping more efficient but also to offer a fun and memorable shopping experience. This translates into increased brand experience and thought leadership in the industry.  

4. Customer Chatbots

Chatbots are another technological advancement that we’re seeing implemented in most consumer-facing industries. This is because they offer a huge opportunity for retailers to personalise customer service at a relatively lower cost. When implemented correctly, they can also be used to guide the consumer from pre-sales to after-sales, helping retailers save money and improve the overall shopping experience. 

Chatbots are also an excellent tool to gather data about customers queries, preferences and demands, which in turn helps offer a more personalised service. Chatbots can offer a truly frictionless buying experience, which in return could increase loyalty to a certain brand since consumers will feel that the brand truly “understands” them. We’re already seeing this with companies such as H&M who offer their own personalized stylist on Kik.

5. Data Sharing with Open Banking

Finally, in the UK and Europe, laws such as PSD2/Open Banking are allowing the industry to take leaps of innovation by encouraging secure data sharing. At first, this may not be obvious to the retail industry, however, when correctly implemented, PSD2 can have a huge positive impact on the shopping experience and company operations.

With Open Banking, authored financial institutions (AISPs) are able to obtain (with consent) direct access to the consumers’ bank transactional data, partner up with retailers and share information in line with regulations. This allows retailers to completely reinvent the way consumers pay for their products as well as target their competitors’ customers. This could be, for example, by personalising payment processes depending on the customers’ specific needs (like offering to pay in instalments for consumers who cannot afford an upfront payment). Retailers can also use Open Banking to initiate payments directly with a customer’s bank. By removing the middlemen in the purchase transaction, merchants will pay fewer transaction fees and will have the ability to clear funds more quickly. 

Gaining access to customers’ transactional details offers retailers an opportunity to offer discounts and cashback. Like never before, retailers will have data on consumers’ spending habits, which gives companies an opportunity to offer highly personalised deals. This also means retailers are able to gain insight on their competitors’ customers. For example, if a supermarket chain analyses their customers’ transactional data they may notice that customers enjoy getting coffee at a nearby cafe after doing the weekly shopping haul. From this analysis, the supermarket could decide to set up a small coffee area in the supermarket and offer a discount for recent shoppers. This helps the supermarket increase market share and boost revenue.

Companies like Recash are helping merchants understand their customers’ buying habits, target their competitors’ customers, design personal offers and make the shopping experience as seamless as possible. By upgrading the consumer’s current bank card to a cashback card, retailers can reward existing customers as well as attract new ones - and a commission-based business model means it’s risk-free! 

This list is by no means exhaustive and there are many other innovative technologies that are making their way into retail at the moment. The main thing to consider is that these technologies are all moving towards a highly personalised, frictionless shopping experience. Whether this is through invisible payments, one-on-one services or loyalty programmes, the main thing is for retailers to allow room to adapt to shifting demands.