The current retail environment is evolving rapidly with an increasing focus on machine learning and disruptive innovation so retailers seem destined to use artificial intelligence effectiveness to maintain and improve their share of the market.
Let’s take a look at some of the predictions for this year and beyond:
Shopping for “
Everyday” Items will Become Easier
The whole process will become much more streamlined - Amazon and subscription businesses will take the burden out of buying all the mundane stuff we need through auto-renewals, one-tap purchases and same day delivery.
Technology will predict our behaviour and preferences and deliver our necessities when required.
This does not necessarily mean that people will totally abandon supermarkets or their local grocery stores because they may still want to choose (for example) their own meat/fish and select the freshest vegetables.
If shoppers are not going to become completely reliant on the internet, however, high street retailers will have to step up to the plate and become more dynamic and distinctive to attract their customers.
Dynamic Pricing will Increase Sales
Retailers will use the data from analytics models to increase or decrease their prices based on the current market situation and their competitors’ price changes – all in “real time”.
“Consumers always love it when they can get a great deal, and dynamic pricing isn’t just about raising prices – it often leads to lowering them,” says Greg Loewen, CEO of Digonex.
“In general, we have found that when prices are transparent to consumers and they understand the ‘rules of the game’, they adapt to dynamic pricing fairly seamlessly and even embrace it.”
Retailers, Robots and Chatbots
Companies such as Amazon are investing in robots to help pack and ship items – and the numbers are expected to rise.
Also, the trend for chatbots doesn’t show signs of stalling and consumers will become more accustomed to these.
Increasing numbers of shoppers are utilising instant messaging apps such as Facebook Messenger and WhatsApp.
In the future, it would benefit retailers to look at what particular messaging platforms their customers are
“Mobile commerce is on the rise and social media is likely to be a bigger part of that in the future. In addition, chatbots are offering another way of buying through social media platforms like Facebook Messenger. All sorts of brands from H&M to Pizza Hut are experimenting with shoppable chatbots.
The advantage chatbots have over image-based social media shopping is that most don’t take the customer out of the messenger platform to complete the purchase. They also allow for back-and-forth conversation about a purchase, recommendations and further product information which can help with conversion.” - Cate Trotter, Head of Trends, Insider Trends
Bricks-and-Mortar Stores will Survive
Not all of them of course but despite the doom and gloom being reported in some retail sectors, bricks-and-mortar shops are doing ok. It’s true that traditional store formats may be on the decline but the ones that offer an innovative, engaging shopping experience will continue to appear and thrive.
Data from the British Independent Retailers Association shows that more shops were opened than were closed in the first quarter of 2017, which was an increase of 414 compared to a net increase of just 4 shops for the same period in 2016.
Thanks to modern point of sale and retail management systems, it’s never been simpler to open a retail business - mobile applications and cloud-based solutions are enabling shopkeepers to quickly set up with little investment. This is good news for independent stores.
“Advertising costs have never been lower, because of the power of social media. Independents can develop a following at a relatively low cost if they have a product or service that people are passionate about.
Access to both software and hardware to empower selling is also cheaper, and it enables small retailers to develop a bond and an understanding of what their customers want.” - Sanford Stein, Founder and Moderator of Retail Speak
Increased Adoption of Machine Learning
It's been possible to order fresh food from Amazon in certain areas of the UK since 2016. Now Amazon seems to be planning on increasing its presence as a food retailer by opening its own high street shops in the UK and throughout Europe.
Called Amazon Go, these stores will employ what Amazon calls "Just Walk Out Technology" to allow shoppers to seize what they want from shelves and leave the store without having to queue at a till.
The whole system works through a combination of computer vision, sensor fusion, and deep learning: consumers scan a unique QR code from an associated app on their phone as they enter the store, then anything they pick up is automatically tracked and added to their (digital) shopping cart.
If someone puts an item back, the system recognises it and the customer is not charged.
The company promises "delicious ready-to-eat breakfast, lunch, dinner, and snack options made fresh every day” alongside essential groceries such as bread and milk. There will also be familiar brands and "chef-designed Amazon Meal Kits".
The whole shopping experience blurs the line between physical and online shopping. The jury is still out on how shoppers will react to being continually tracked while they shop!
Vice President of Amazon Go, Gianna Puerini has said that this technology “was really advancing the state of the art computer vision and machine learning.”
Other retailers are almost certain (eventually) to follow Amazon’s lead.
Prospering in the Coming Years
Successful retailers during 2018 and beyond will be the ones that continually evolve and adapt along with their customers.
Companies will need to use the data they are collecting to determine their best course of action: it might mean they need to explore new store setups – or just to revitalise what they are currently offering.
What it certainly requires is an examination of the new technologies that are available and to fully understand their significance. If retailers want to prosper in the coming years remaining stationary is just not an option.