How Technology Will Change Retail in the Next 5 Years

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A lot can change in five years. In the last half a decade alone, we’ve seen huge changes in the way that retailers work and the way customers shop. From changing consumer behavior and the shift to e-commerce to supply chain complexity, the landscape for the entire industry has shifted, and the next five years will be no different. Customers will be looking for increasingly personalized and interactive shopping experiences, with new technologies and tools taking center stage.

So, what kind of technologies will we see retailers adopt and develop across the next five years, and how will these advancements revolutionize the industry?

The AI revolution

Artificial intelligence (AI) is already being used in major applications across multiple industries, namely manufacturing, finance, and increasingly, healthcare. Utilizing AI to automate repetitive tasks vastly increases productivity, as well as lowering long-term costs by reducing the reliance on human labor.

In the retail industry, AI has the potential to streamline processes such as pricing, inventory management, demand forecasting, and payment, allowing for seamless experiences for both customers and employees. In the next few years, technology like that used in Amazon Go stores will become more widespread, allowing retailers to make automatic payments in-store, without the need for a formal checkout process at all.

AI will also increasingly be used to provide tailored shopping experiences for consumers. Whether it’s through virtual shopping assistants or tailored product recommendations, 80% of consumers are more likely to buy from a retailer that offers a customized experience, so using customer data to craft AI-driven personalization will only become more vital.

Going mobile

The last few years have seen unbelievable expansion in the e-commerce and mobile shopping market. E-commerce sales alone are set to increase from $1 trillion a year in 2022 to $6 trillion by 2024 and with customers increasingly wanting their digital shopping experiences anytime, anywhere, mobile commerce looks to be the next priority.

As well as being an important part of a fast and streamlined e-commerce customer experience, mobile technology will also become vital for retail employees, bringing increased efficiencies to the order fulfillment and delivery processes. Mobile devices that offer real-time inventory checking, live performance dashboards, interactive store maps, and foot traffic analysis will become essential for retailers looking to provider a smoother employee experience.

Augmented reality and the metaverse

Across the next five years, retail customers will be increasingly looking for experiences that bridge the gap between digital e-commerce and brick-and-mortar shopping. This way, shoppers get the speed and convenience they crave, but with more control and human-like interaction. Enter Augmented Reality (AR) and the metaverse.

AR technologies and environments, such as the metaverse, offer immersive, fun, and interactive shopping experiences that put buyers in the center of their own customer journey, often without even having to leave their home. Technology like virtual try-on mirrors are already being implemented in stores like Sephora, IKEA, and Target, and will continue to proliferate across retail sectors. There is also potential for AR to be used behind the scenes in warehouses and distribution centers, offering 3D product visualization and on-site job training for retail teams.

Shifting to voice technology

Voice-driven technologies will become a major driver of productivity and efficiencies in the retail industry, helping to mitigate some of the challenges caused by high employee turnover. With voice-enabled devices, customers will be able to search and browse products without the help of associates, and voice-controlled robotics will provide smoother, faster checkout processes and customer service tasks.

For retail employees, voice-driven devices assist with picking, inventory searching, clocking in and out, and any other routine tasks. With many now embracing voice-controlled technology in their personal lives through smart homes and wearable devices, it won’t be long before all retail organizations are harnessing its benefits.

The potential of blockchain

One of the most discussed technologies of recent years, blockchain will earn a greater role in retail digital transformation in the near future. Customer trust is critical in the retail industry. Blockchain’s decentralized nature, which increases transparency, traceability, and confidence, therefore presents a huge opportunity for retailers. By allowing for the easy verification of user identity and data, blockchain payments simplify the compliance process for regulations like the GDPR and CCPA, as well as minimizing administration costs.

By enhancing the customer experience to meet the changing expectations of economically conscious shoppers, embracing innovative technologies will give retailers greater profitability and business resilience. And beyond the customer experience, these advancements will allow the entire retail industry to make supply chain improvements, meet sustainability initiatives, and boost employee satisfaction throughout the next five years and beyond.

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