Retail technology refers to the digital tools and innovations used by brick-and-mortar retailers and e-commerce websites in their in-store. So, which latest technology trends in retail are worth the hype? And how can you decide the right things to pursue in your retail business? In this post, we will show you the list of top retail technology trends with reports and statistics. Through it, you will be able to keep up the pace in this rapidly growing industry.
Retail technology: Reports Highlights
- As retailers head toward a post-pandemic world, capital for retail technology tripled to $28.9 billion in the first quarter from the same period last year, due to Retail Dive reports. The number of deals in Q1 increased 7% year over year.
- The report reveals that Q1 funding for in-store tech doubled from the previous quarter to $2.2 billion. And e-commerce technology increased 73% to $11.7 billion.
- Meanwhile, funding in technology that helps supply chain and logistics flow faster and more efficiently approximately doubled on a year-over-year basis to $8.7 billion, the report said.
- With another record quarter, retail tech investments in 2021 are on track to more than double the annual fundings in each of the last 4 years.
- E-commerce’s unceasing growth is driving higher valuations and bigger investments rounds. In Q2’21, there were 71 mega-rounds (deals worth $100M+), which decrease only slightly from Q1’s 73. The top 5 deals all went to the e-commerce business, while the 5 highest-valued new retail companies in Q2’21 also span the e-commerce value chain.
- Business is growing significantly for Amazon third-party marketplace brand acquirers. Investments hit $1.2B for Q2’21 for the business that acquires, consolidate, and scale third-party Fulfilled by Amazon (FBA) brands.
- Loyalty and rewards tech funding increased approximately 60% in Q2’21 to $413M.
- Retailers will zero in on tech that helps the supply chain more efficiently. Applications that can optimize warehouse operations, delivery routes, and more will be a top priority. Investments to supply chain and logistics tech boost by 13% to $9.6B in Q2’21.
Retail Technology Market size
Retail tech is an essential factor for brick-and-mortar stores, B2B and B2C e-commerce businesses, online marketplaces, and e-services such as meal kits and food delivery. In recent years, the financial investments into these segments have grown significantly, encouraging companies towards the digital transformation of their organizations. In 2020, investments and capitals of about 40.2 billion U.S. dollars went into retail tech deals across all sectors.
Next stage in technology retail
Digital technologies in retail are popularly used by e-commerce businesses, but it is brick-and-mortar and multichannel retail companies that are now spearheading the adoption of retail technologies in the retail industry at large. Among the in-store retail technologies that companies prioritize are smart or self-checkout kiosks, smart fitting rooms empowered by augmented or virtual reality, and widespread digital payment options.
Leader in the retail tech game
The biggest share of investments and funding into retail tech is concentrated in Asia. This is not surprising seeing since the region currently has the highest online revenues and the most e-commerce shoppers. North America is a close runner-up, having received around 34 percent of global retail tech capital in 2020. Compared to the biggest two retail tech trailblazers, Europe is lagging behind in terms of retail technology investments.
Lastest Retail Tech Trends To Watch
Now, we had a look at some of the retail technology trends that have been making waves as of late and some tips to make them work in your business successful
1. Virtual Fitting Rooms
Some 40% of customers would be willing to pay more for a product if they could experience it through augmented reality. Another 71% would shop at a retailer more often if it offered AR technology. This technology enables retailers to generate custom-sized charts. With this, customers can easily find sizes and style profiles that perfectly fix the Shoppers’ needs. Moreover, this technology is especially helpful for apparel companies because it permits shoppers to “try on” and buy any products without having to leave the comfort of their homes.
Big retailers like Macy’s and Adidas are taking advantage of it with positive results. According to virtual fitting room software company Zeekit, their services have effectively reduced retailers’ return rates by 37%.
Tips: Retailers can take advantage of this and install virtual mirrors in their brick-and-mortar stores. There’s no need to dedicate valuable retail space to changing rooms. Instead, that space can be used to showcase stock and create visual merchandising displays.
2. Focus on virtual user engagement
When the pandemic hits, Microsoft Teams experienced a 500+% growth in calls and conference in 2020. That mean the need for human interaction is stronger than ever. Therefore, retailers can stay competitive by finding solution to connect with clients virtually. Your business can turn to your shoppers base to figure out the right approach. From there, it’s a matter of sorting out the tech side of things. You’ll need to use a trustful communication platform that enables you to hold events or sessions remotely. For example, it can be as simple as hopping on Instagram live. However, if you need more interaction or if your requirements are complex (i.e., guest registration, ticket sales, webinar moderation, etc.). Then, you can use a ticketing system like Eventbrite and a webinar platform like Zoom would be good to go.
Tips: If you’re resisting technology that would enable you to connect with customers virtually, you may have to rethink your position. While a good chunk of shoppers will go back to offline retail interactions when the lockdowns are over, a segment of customers will likely stick to virtual platforms. Therefore, you need to make sure that you’re able to support both groups.
3. Ongoing Advancements in Fulfillment Options
2020 saw a rise in all kinds of fulfillment options, and that trend is here to stay. From the rise of Buy Online, Pickup In-Store (BOPIS), to the dramatic adoption of curbside pickup, shoppers demanded new, convenient, and safe solutions to receive their goods. However, long before the pandemic, 2019 reports from Numerator found that 77% of Walmart shoppers actually preferred curbside pickup to in-store orders. Even without added health anxiety, consumers were already gravitating towards faster and more convenient fulfillment selections. Indeed, smart businesses have already taken it one step further and adopted – or are in the process of applying – same-day and next-day delivery solutions.
While Amazon Prime pioneered this now an expectation, Target has grown their Shipt services and Walmart has expanded their two-hour express delivery solution. Yet that’s only the tip of the iceberg, as 89% of shoppers have indicated that they’re willing to pay more for faster delivery, according to PwC.
4. Contactless payments
As you know that contactless payments aren’t new; Retail technology like mobile payments (Apple Pay, Samsung Pay) or tap and go have been around for several years. However, the pandemic has dramatically accelerated this trend.
A study by Mastercard found that nearly half of customers globally (47%) “have swapped out their top-of-wallet card for one that provides contactless – this proportion climbs to 53 percent among those under 34 years old.” Besides, what’s more, 83% of respondents say that contactless payment solutions are a much smarter way to pay. Moreover, serving contactless payments like Apple Pay used to be nice to have. Therefore, if you haven’t used this trend so yet, upgrade your terminals or payment processing solutions so you can start accepting contactless payments.
Furthermore, you need to spread the word. By using all your communication channels such as email, social, in-person, etc. to allow clients to know about your contactless initiatives. Moreover, by encouraging your shoppers to use these solutions, you can keep your customers and employees safe.
Tip: Accept all the ways your shoppers want to pay and streamline sales at checkout in-store, website, and on the go. Through it, payment processing is really flexible and easy
5. Rise of Subscriptions
Subscriptions have become an increasingly common solution for customers to buy products and services. According to McKinsey research:
- 45% of online customers currently subscribe to media (ie Netflix, Spotify)
- 15% of online customers have signed up for one or more eCommerce subscription sub-products at some point
- The subscription eCommerce market has grown by more than 100% annually since 2014
Shoppers often choose the subscriptions due to their convenience, cost-savings, or personalization. And whether they’re replenishing commodities, looking for curated products, or willing to pay for exclusive access, the demand for subscriptions brings eCommerce brands a unique chance to create loyal customers and predictable income. Therefore, when subscription services develop and it will innovative technologies to cater to them. Several emerging leaders include Chargebee, Stripe Connect, Chargify, Zuora, and Oracle Subscription Management, among others.
Tips: The retailer can take advantage of these solutions, and other eCommerce platforms begin providing their own subscription solutions throughout the year.
6. E-Commerce-Friendly POS Systems
E-commerce has significantly developed during the COVID-19 pandemic due to restrictions and fears surrounding in-person shopping. This has motivated shopper owners to optimize their e-commerce stores in order to increase their online sales processes.
Unfortunately, lockdowns and health risks created by the pandemic lead to a record number of retail closures in 2020. Many of these closures, such as Microsoft Store and Pier 1, have been permanently closed. Others, like JCPenney and Macy’s and, have temporarily closed locations or decreased the number of open locations. However, some retailers like Walmart and Target created significant earnings last year.
Therefore, retailers need a technology that supports them to sell goods online at the same level of efficiency, system integration, and shoppers satisfaction as in physical stores. And, SaaS provider of a cloud-based ERP solution for retailers discusses the ever-growing demand for a fully integrated POS and e-commerce solution.
Tips: Simply building an online option and an in-person option may not be enough. Retailers will eventually need to synchronize these 2 domains with e-commerce and POS integration. This will permit them to best integrate online and offline transactions, inventory, and promotions across all in-person locations and eCommerce websites during and after the pandemic.
7. On-Demand Manufacturing
Due to the National Retail Federation, on-demand manufacturing is expected to make a comeback in 2022. Today’s customers value sustainability and zero-waste. Therefore, creating goods only as orders are placed is an effective solution to cater to those needs.
8. Local E-Commerce
The last Retail technology trend that is going to define 2022 is undoubtedly Local E-Commerce. 2021 will see the acceleration of local e-commerce, as more small companies “close to home” will shift to platforms such as Shopify. Moreover, ride-sharing services such as Uber and Lyft may introduce courier services that allow these businesses to provide fast delivery. The toolsets of big e-commerce players such as Amazon will finally reach the hands of small, local businesses—and we’ll all benefit from it.
Is your Retail Business up to date?
We hope our list of top Retail technology to watch gave you a fresh dose of inspiration. Also, Get Free Consultant From Our Experts who can advise you on the ways in which you can improve your retail business. We – ArrowHitech has become one of the superior IT outsourcing companies. We are experienced professionals in the field of eCommerce, Web/mobile apps, CMS website development as well as Salesforce and Software Consultant & Development.