If there is one thing the retail business can count on, it’s change. The industry is constantly evolving and it is important to stay ahead of trends in order to maintain competitive advantage. Not just “sexy” trends like artificial intelligence but also critical trends like data security and analytics. Here are some of the trends to watch for the rest of the year.
Anyone who has been to a major retail conference in the last several years has seen artificial intelligence (AI) finally “coming to life” in the industry. There are exciting technologies on the horizon and in the market today, but widespread adoption has yet to be realized. This is partially due to cost and the difficulty of incorporating AI into inflexible infrastructure, but also partially due to the inability of tech providers to sell the real value of AI.
However, AI is developing more emotional intelligence, and as the technology becomes better able to understand the needs and desires of individual customers, the ability to personalize through AI is becoming a key selling point and a real benefit. As costs begin to curb and the business benefits of AI become more easily recognizable, AI will finally reach widespread adoption.
The Rise of the Robot Employee
AI is driving the adoption of bots across the industry, and once again, Amazon is leading the way. The company currently deploys more than 100,000 robots in its fulfillment centers, helping human workers save time, speeding up the fulfillment process and allowing Amazon to maximize warehouse space – a small robot can fit into spaces a human simply cannot. Robot workers are also allowing Amazon to open smaller fulfillment centers across the country, providing faster service to more rural customers.
Less Time in the Checkout Line
Amazon Go is the “ideal” checkout-free store, but that model is impractical for large retail outlets and SMBs with limited budgets. However, retailers of all stripes are looking for ways to reduce time spent in the checkout lines. Currently, Kroger, Dollar General, Walmart and Sam’s Club allow users to scan items on their mobile device as they shop. Mobile payment systems like Apple Pay are on the rise, as are “walking POS” systems – associates on the sales floor who can checkout customers using their tablets. Watch for greater adoption of these types of alternatives to reduce friction at the checkout line.
Data is critical for growth, but it is also a risk. Rapidly-expanding technological capabilities generate more data, but that data must be protected at all costs. Security breaches aren’t just PR headaches – they can legitimately threaten business and those risks are greater than ever thanks to technology. Today, nearly 50 percent of the retail IT landscape is controlled by someone other than the CIO, which can make it difficult to assign responsibility when a digital process is threatened.
Ongoing success depends on a proactive, evolutionary approach to security that addresses risks and threats across people, technology and processes. Watch for more significant investment in cybersecurity among retailers and vendors of all sizes.
In 2018 we saw renewed focus on the way companies use customer data. Consumers are becoming much more educated in this realm, and they are demanding to know how a business will use their personal information before deciding to share it.
Retailers that want to earn the trust of their customers are focusing on data transparency. They are up front about the data they collect and how it is used, and give customers more control over what they share. It will be important to provide a real benefit for sharing personal data – today’s customer wants something in return for putting their trust in a brand.
Where Should Retailers Invest?
Every retailer operates under unique circumstances and knowing which trends to invest in and when requires a keen understanding of the brand’s current position, its future goals and the needs and preferences of its customers. Identifying patterns and aligning them with trends will help retailers make smart, data-driven decisions to determine investment.