With COVID-19 making a big shift in consumer sentiments and lifestyle, it has also accelerated the pace of technology adoption in this industry. One of the biggest takeaways that we got from the tumultuous 2020 is the shift to ecommerce. So, we can say that having an online presence with a robust backend is not optional anymore. Every retailer is moving fast towards digital innovation to drive efficiency and meet an entirely new set of customer expectations- contactless, frictionless to name a few.
So, What’s the new normal for commerce? And what can you do to take your experience to the next level in 2021 and beyond? In this blog, we are presenting top retail trends that will shape the future of retail and commerce.
Trend1- Omnichannel Innovation – Offline is online, online is offline
No doubt, COVID’s impact on consumer habits has reshuffled the deck completely. In-person interaction has been converted into digital engagements. To adapt to new customer preferences and habits, retailers will need to review their omnichannel offerings and inject innovation to fill the gaps.
This is one of the biggest retail trends, which include emerging technologies AI, ML, Robotics, IoT and Extended Reality (virtual and augmented reality). Such technologies play a vital role in enabling retailers to bring the convenience of online shopping to offline stores and vice versa. While the general trend has seen offline stores moving into ecommerce, more lately, it has been seen online retailers are focusing on building brick and mortar presence.
At its core, this trend includes big players like Amazon Go (letting customers pay for their groceries by scanning the palm of their hand), Walmart's initiatives (facilitating customers to order and pay in-store and have goods delivered to their homes). On the other hand, the pop-up shop trend is getting popular amongst start-ups and mid-market companies in collaboration with bigger brands. This is how the technology inventions are meeting consumers where they are and on their terms.
AR and VR are already making entry to the digital retail. The Mixed Reality Market size globally is projected to take a big leap of $2.8 billion by 2023.
VR environments will pick up momentum to provide feature-rich shopping experiences. At the same time, offline retailers are experimenting with AR to allow customers to look into product details they find on the shelves. As this uncertainty continues, retailers are focusing on tech-driven solutions to allow customers to virtually try out products in order to encourage contactless shopping.
Trend 2- AI and Personal Voice Assistants – Ringing up gains
Gartner forecasting says that by 2022, 70% of customer engagements will be done using AI modes namely Virtual Assistants, Chatbots, and Instant Messaging.
AI trend is increasingly gaining momentum across the whole retail industry. AI and advanced analytics are powering customer and service personalization across all channels through which customers are interacting. Moreover, big data analytics is allowing companies to understand what should be stocked in the stores and streamline logistics operations. Retail trends for 2021 includes recent developments in AI such as chatbots and personal assistants. Like robots and intelligent forklifts have been helping out in inventory management, we can expect to see them on the shopping floors in 2021.
Analysts have forecasted that global annual spending on AI by retailers will reach 7.3 billion by 2022, all because AI provides new ways to uplift customer experience and optimize operational efficiency.
AI-powered voice recognition assistants are now performing better. They can be used to add value in both the modes in-store and through ecommerce applications. Just like the trend of commanding our devices through voice has become prevalent, we are increasingly using them to get information and make purchases. In fact, a study conducted by Juniper research has found that the adoption of chatbots will go up and help businesses save $11 billion annually by 2023.
It’s also important to note that personal assistants or chatbots can go beyond creating in-person experiences. For example, Opun Limited, a home improvement company, has created a chatbot assistant to help people get home improvement jobs done. The chatbot system can handle a variety of customer service requests – kitchen designing queries, appointment tracking, issue tracking, confirm availability, do survey and more - just like human does.
Trend 3- Autonomous Delivery will prosper
We’re likely to see ideas such as drone delivery and self-driving vehicles that are coming to life. Autonomous delivery and fulfillment reduce risks like virus contamination, which is a crucial factor that leads to accelerated acceptance of these new advancements in the tech space.
In the near future, autonomous delivery will act as ‘last-mile’ solutions. This is going to involve self-driving vehicles and airborne drones for trips between fulfillment centers and consumers’ homes.
There are bright spots: Walmart has taken the next step in on-demand goods delivery by partnering up with Flytrex, an end-to-end drone delivery company. Walgreens is testing drone deliveries by partnering up with Wing drone delivery system.
This trend will involve several technologies, including AI to drive efficiency from the logistics standpoint. Others like blockchain, which will ensure security and transparency along supply chains, and digital twinning, allowing massive models of logistics and fulfillment operations to be built, to drive efficiency.
Trend 4 – Personalized shopping continues to rise
Today, customers expect a personalized experience while shopping. Thanks to online pioneers, such as Amazon, Netflix that make customers enjoy and expect personalized experiences at every step of their online journey.
As per McKinsey, a positive customer experience drives immense success in retail: it yields 20 % higher customer-satisfaction rates, approx. 15 % boost in sales-conversion, and more.
Personalization, which was once limited mainly to targeted offers, is now ushering in a new form of extensive-level customization across a whopping range of products and services. Retailers are making customers part of every dialogue between the two and leverage the data to create one-to-one relationships. Customers then receive information as an individual, with products, offers and communication that is unique to them.
Just like ML based recommendation engine keeps track on our purchasing history, inside retail outlets, shop assistants now are armed with information on who we are and our history of purchasing.
One nice example of personalized shopping is Sephora. This cosmetics retailer collects information on consumer personal choices about beauty products through an app. After creating personalized profile for every customer who does the shopping online, they then make that information available to sales staff when they visit in-person.
Trend 5- Social Commerce to create new shopping experiences
Social commerce has the potential to grow faster than ecommerce. According to a recent study, in 2020, around 41% of customers said they were preferring online shopping over purchasing things from stores. This states that, while consumers may not be interacting
as in person, socially driven commerce is embedded in their veins.
Social commerce provides shoppers a very smooth way to shop across social media platforms. In 2020 alone, we came across an exciting partnership of TikTok and Shopify. Moreover, we saw an expansion of Snapchat’s Native Stores, and the launch of Facebook Shops.
The idea of retailers and brands to create amazing shopping experiences via social channels is one of big hits in 2021. Social commerce is holding tremendous potential to build purchasing intent. Moreover, it will create the payment process smoother that gives new meaning to the word “seamless.” Adding to that, Technavio recently projected that the social commerce market has the potential to grow by $2,051 billion during 2020-2024.
The “New Normal” is here to stay. With everyday evolving consumer choices and attitudes, retailers must adapt the changes and prepare for transformation to provide frictionless experience across every customer touchpoint. This is the time to strive for 1:1 personalization, embrace omnichannel retail trends, and reassess the potential of stores by integrating technologies like 5G, AI, ML, IoT, Extended Reality and Data. Revamp and recalibrate retail business strategies to yield positive outcomes quickly.
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