Objects in retail’s future may be closer than they appear.
Companies in the commerce space are hurtling toward a new reality powered by robotic partners, deeper analytics, hyper-focused marketplaces carving out the nichest of niches, and extended reality’s influence online, according to a new report.
Technology will take a starring role in retail if the sector hopes to keep smartphone-addicted shoppers interested and flooding into stores. Artificial intelligence (AI) and computer vision technologies will give retailers smarter ways to track not just where their inventory is, but also how shoppers behave as they browse their aisles, CB Insights found in its “State of Retail Tech: Ahead in 2020” report.
Though retailers realize the importance of data, they’ve struggled to convert the mountains of information they collect across channels into actionable, game-changing insights. In the year ahead and decade beyond, “the power for retailers and brands to process consumer insights will be crucial and boosting supply chain speed will become a priority,” the tech marketplace intelligence platform said in the report.
AI, too, is set to elevate other aspects of the shopper journey. Personalization, for one, could enter into overdrive as the tech that makes it possible improves. CB Insights expects AI to serve up product recommendations expertly tailored to consumers’ individualized tastes, “while brands will develop on-demand manufacturing” and execute one-to-one merchandise that leaves no waste behind.
And if merchants outfit their stores with controversial facial recognition tech to identify who’s in store, “consumers will expect even more relevant experiences,” according to the report.
E-commerce might be where shoppers want to shop but there are still some elements of the brick-and-mortar path-to-purchase it can’t quite replicate—especially when it comes to fashion. To close that gap, digital retailers will turn to cutting-edge extended reality technologies like AR and VR to simulate the experience of modeling clothing and shoes to further entice consumers to spend, CB Insights said.
And while much of the gaming action to date has come through partnerships between brands like Puma and Nike, and the growing industry’s leagues, digital entertainment could sink its tentacles further into retail, especially with Gen Z’s spending power on the upswing. CB Insights sees leading retailers hiring “e-game developers to get their content up to speed.”
It’s already happening, but retail will move out of the store and off of the web to where consumers want to buy. “Retail everywhere,” as CB Insights calls it, “will create opportunities to shop whenever the inspiration strikes. With auto makers pouring millions into driverless vehicle prototypes like the ones on display at CES, in-car commerce could become the next big place that consumers will make important decisions about the new fashions they bring into their wardrobes.
Smart vending machines and pop-ups hosted by digitally native brands feeling out the real world are showing staying power as permanent fixtures on the retail scene, according to the report. “It will become crucial for retailers to expand their understanding of the customer journey to purchase,” CB Insights noted.
“Mass” is dead, especially where marketplaces are concerned. Though consumers have propelled digital everything-goes markets like Amazon and eBay to dominance, CB Insights expects tomorrow’s online bazaars to serve niche audiences, tailoring “experiences and assortments, with the aim of boosting productivity and profitability.” Brands, the firm noted, “will need to establish where their products fit” in the next era of hyper-focused markets.
Like it or not, robots in retail are here to stay, with fulfillment in particular attracting investments in automation. At NRF last month, Locus Robotics’ chief marketing officer Karen Leavitt told Sourcing Journal the industry’s thinking around robotics in the warehouse has shifted enormously in a short timeframe as the automation tech becomes more capable by the day.
Three years ago, she says, many prospects described robots as a “cute idea,” and two years ago, retailers realized they needed to start thinking about incorporating these devices and processes into their operations. Last year, companies were asking which specific robots they might need, she added, and now, potential clients are coming in with budgets pre-allocated for a deployment, and they’re considering which warehouse will start their robotic deployment to drive the most impactful ROI.
“Retailers and manufacturers will need to carefully align supply chain timing with profitability goals and technology requirements,” CB Insights said.
And robots will break out from their four-walled confines and take to the streets in a bid to make the so-called last mile less of a drag on costs, according to the report. Amazon has tried out self-driving robotic vehicles in the form of Scout, no doubt hoping to grab a chunk of the market for autonomous delivery bots that could reach $33 billion in value by 2024.
CB Insights also sees brick and mortar’s role in commerce evolving such that a growing number of stores will serve as a “returns depot,” as startups enter the space to help merchants minimize the number of items being returned to sender. Avenue, for one, is the latest retailer to emerge from the spasms of bankruptcy with a streamlined online-only operation and new tie-up with Happy Returns empowering shoppers to return goods at a network of other stores and physical locations.
Phil Ryan, CEO of Avenue parent company City Chic, expects the Happy Returns partnership “will help us succeed without a physical retail presence.”