One of the biggest challenges facing retailers is to figure out how to seamlessly incorporate technological advancements into their business model. The shopping experience has changed in a brief period of time and continues to evolve based on consumer buying habits. One-size-fits-all is an obsolete concept that no longer lets retailers place consumers into a neat package. Using an omnichannel approach focuses on the big picture. Yet, it allows retailers to customize channels and touchpoints based on the needs identified for a specific group, or individual customers. Technology is gradually augmenting reality by bringing the online and physical store experiences closer together.
Technology that Supports the “Phygital” Journey
Merging the physical and digital space is a new phenomenon known as phygital. Both distinct journeys are richer and more robust because physical channels are enhanced by technology and digital channels become more humanized. The result is a personalized shopping experience that will engage consumers at each stage of the buying process. The emergence of the phygital space is a direct result of technical innovations within the retail industry.
Facial Recognition Software can serve two purposes. It helps retailers at point-of sale identify loyal customers who want a more personalized shopping experience. The software works similar to the technology used for fingerprints. Facial recognition software scans reference points in the person’s face to identify their specific “face-print.” It’s typically used by high-end retailers to cue staff on the kinds of products the person might buy, or the amount of money they may spend. Conversely, the software can also assist with loss-prevention. Retailers lose $50 billion per year due to theft—36 percent is due to shoplifting. Recognizing known shoplifters whose faces are included in a database can assist security staff in preventing thefts before they happen. Retailers who use facial recognition software have decreased shoplifting by 34 percent.
Robotic Warehouse Assistants were figments of the imagination a generation ago. However, analysts believe that Amazon now utilizes more than 100,000 robots in their warehouses who are programmed to move stock and organize stock for order fulfillment. Shifting these functions to robots has enabled the retail giant to reduce operating costs by 20 percent. Although Amazon may be ahead of the curve, they are not alone when it comes to taking advantage of robotic technology. It’s estimated that the global customer service robot market will reach $88 billion by 2025. Other functions robots can perform within the supply chain include price checks, locating lost inventory, and restocking products.
Cashierless Checkout is an idea that has become increasingly popular as a result of the pandemic. Giving consumers the freedom to walk out of the store and have their items be automatically scanned is the ultimate customer service for time-conscious shoppers. Payments are processed automatically and wirelessly through virtual wallets connected to customer’s smartphones. Consumers are most familiar with how the concept works in Amazon Go stores. However, 7-Eleven is testing the concept in pilot stores. “Ultimately, our goal is to exceed consumers’ expectations for faster, easier transactions and a seamless shopping experience,” said Mani Suri, 7-Eleven senior vice president and chief information officer.
Voice Commerce is a growing trend in the U.S and estimated to reach $40 billion by 2022. The introduction of voice assistants such as Siri and Alexa have made the technology a popular option for smartphones and hands-free devices. According to emarketer.com the number of people using voice technology has risen worldwide. Surveys estimate that more than 128 million people in the U.S. used a voice assistant at least once in 2020—up 11.1 percent from 2019. This amounts to 4.2 percent of Internet users and 38.5 percent of the total population. The double-digit growth for voice assistants and smart speakers available through Amazon, Google, and Apple is largely due to the number of people who are spending more time with their families, or working from home due to the pandemic.
Smaller businesses may think innovative technology has little to do with their world and resides within the domain of big box retailers and luxury brands. However, understanding what motivates consumers to buy and what is required to meet their expectations are fundamental principles of retail. Artificial intelligence (AI) is connecting every business to shoppers. Servion Global Solutions forecasts 95 percent of customer interactions will be facilitated using AI by 2025. Ultimately, it’s up to retailers to decide what type of technology will benefit their business and customers.