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Technology has integrated its way into most types of businesses, and retail is no exception. Retail technologies encompass any hardware or software solution used to operate the retail businesses. Examples of new retail technology include:
- Point of sale systems
- Customer relationship management and analytics tools
- Retail app and software integrations
- Online retail stores and eCommerce
- Hardware such as an EFTPOS machine and credit card reader.
Using technology in retail has been an increasingly popular trend among retailers because of a few reasons. One of them is the exponential growth in online shopping. According to statistics, 12.3 per cent of Australian sales were conducted online in March 2020, and there were 5.2 million households that shopped for their necessities online in April 2020. This is a 31 per cent increase against the year-on-year average.
If that wasn’t enough, the COVID-19 pandemic saw a growth of online sales almost overnight. The lockdowns and closure of brick-and-mortar stores meant that people were looking to spend online, and total online sales have recorded an annual rise of 65.5% from March 2020 to January 2021. There was also a greater demand for click-and-collect, same-day deliveries, and digital payments.
Psychologically, customers became accustomed to spending online, and some even prefer it to the hassle of travelling. Meanwhile, retailers have also realised that not selling online comes with many benefits such as low set up and running cost, a better understanding of customers, and no time restrictions on when customers can buy from their business.
So, if you own a retail business or thinking of owning a retail business, let’s look at the 5 main retail tech trends.
1. Omnichannel customer experience
For a long time, a customer would typically purchase a product in a brick-and-mortar retail store. Since then, there has been a significant change in how customers buy. The retail industry is getting increasingly competitive, and brands need to be present and, more importantly, consistent, in more ways than one to the customer.
Omnichannel is defined as “viewing the experience through the eyes of your customer and orchestrating the customer experience across all channels so that it is seamless, integrated and consistent.” Businesses that have omnichannel strategies achieve 91% greater customer retention rates every year in comparison to those who don’t.
Retailers with an omnichannel strategy try to create a unified user experience. They understand that customers today interact with businesses through a variety of channels, and that all channels should be integrated and consistent. These channels are also called touchpoints, and it’s crucial that retailers understand at which touchpoints does the customer make the purchase or consider a purchase.
Omnichannel doesn’t just mean setting up an online website store along with a brick-and-mortar store. It is understanding where your customer goes in the buying process. Do they make purchases through social media and Google? What about mobile apps and third-party online retailers? At its core, omnichannel retailing is all about convenience, and how the customer can purchase from your brand easily.
2. Marketing Automation
Thanks to the growth in Artificial Intelligence (AI), it is now much easier for businesses to automate their operational processes. Marketing automation is defined as “technology that manages marketing processes and multifunctional campaigns, across multiple channels, automatically.” Examples of automation in marketing includes scheduling posts on social media, sending out bulk emails without hitting ‘send’ on every single one of them, and receiving data reports on your customer buying habits and engagement rates, without having to do lengthy surveys.
Many retailers mistakenly assume that automation is something only ‘big companies do’ because it’s costly and requires skilled people in the IT department. But automation doesn’t take much time to implement and maintain, and it certainly saves a lot of time for retailers. By automating menial tasks, retailers can spend more time doing work that really matters, such as figuring out how to get more customers.
Because of its many benefits, marketing automation is a very popular choice among retailers. The marketing automation market is set to be worth $8.2 billion by 2024and this is not the only prominent statistics.
Retailers who implement automated chatbots into their social media and has seen its benefits, with messaging platforms like Facebook Messenger having great success with chatbots. According to research, over 60 per cent of users who received a notification via a chatbot on Messenger has engaged with it.
If customers are the key to a retailer’s success, then it’s imperative that retailers understand who customers are at a personalised level. Everyone loves a personalised service, and in the digital space, this is even more prominent. Research predicts that by 2024, organisations with an IT department that understands the customer will outdo other organisations by 20% in customer experience.
Hyper-personalisation is a term used when retailers deliver more relevant content and information regarding their product and service to each customer in their buying journey. This technology in retail is also supported by Artificial Intelligence (AI) and it is said that retailers who adopt online personalization technology are outselling their counterparts by approximately 30%.
So what does a retailer do to hyper-personalise consumers? Unlike the usual market targeting on social media, this strategy goes one-to-one with the customers. For example, fashion retailers often recommend clothes based on the customers previous preferences and keep customer’s saved items in the online shopping cart with a targeted email to the consumer to remind them to buy their item.
4. User Data Privacy and Security
Data privacy is arguably one of the biggest things for any online business right now. With more and more personal information being shared on the internet, data privacy and security is becoming an increasingly important legal and ethical requirement for retailers.
When consumers shop online, they leave behind a huge amount of personal information, such as bank details, geolocation data, demographic data and purchase behaviour. According to research, 73% of retailers have already developed at least some kind of a consumer privacy protection strategy, and 87 per cent of consumers have said that they would not buy from a company if they had concerns about its security practices.
Retailers who are looking to grow their online business are now taking serious steps to educate consumers on what sort of data is being taken from them and ensure consumers that privacy and security is of high importance, especially where payments are concerned. This strategy by retailers creates a high level of consumer trust and a higher likelihood of brand consideration.
5. Advanced POS System
Point of sale (POS) system generally enables retailers to accept payments from customers and track their sales. However, point of sale systems have evolved to analysing consumer data, real-time inventory tracking and management, and integration with other business software such as Xero.
Because of the surge in e-commerce, retailers have realised the importance of integrating point of sale system with their online store. An advanced POS solution would allow retailers to sell products online as efficiently as physical stores, and with the same level of customer satisfaction.
There are a few rising trends in POS systems, they include:
- The growth in e-wallets and mobile payments – With the growing use of smartphones, retailers are ensuring that their POS systems must accept mobile payments and e-wallets.
- Cloud integration – POS systems that can store data in a cloud is crucial for retailers to access their inventory and customer data whenever they want it and in real-time.
- Integrated customer loyalty program – The latest POS systems should give retailers an understanding on who their customers are and their buying behaviours. It should also allow businesses to easily add rewards and points for repeat customers.
In conclusion, these retail technology trends are here to stay, and retailers who are quick to adopt them will find themselves with more positive returns, and a stronger competitive advantage.