The Future Of The Retail Industry
With ecommerce growing at an exponential rate and trends toward omnichannel shopping experiences, the retail industry is transforming.?
Besides these changes, the industry will start utilising direct-to-consumer tactics, depending more on first-party data, and responding to the need for supply chain efficiency in 2023.
These are just a handful of the developments the retail sector will influence in 2023.
Retail Forecast For 2023 And Beyond
Trends that will shape the retail industry:
Capitalizing On Direct-To-Consumer (D2C) Retail Strategies
More established firms will switch to direct-to-consumer (D2C) retailing in the coming year.
D2C allows businesses to market, sell, and ship their items directly to customers, eliminating intermediaries or third-party shops.
eMarketer states that US D2C online shopping sales increased by 16.9% from the previous year to $151.20 billion in 2022. While D2C sales will only make up 2.5% of all retail sales in the upcoming year, D2C has challenged and effectively disrupted the retail industry by diversifying the customer experience, according to eMarketer.
Customers are propelling D2C enterprises to grow. According to GfK's What's Next 4 Consumers survey, 62% of US consumers tried direct-to-consumer products in 2021, and 70% will migrate from traditional brands to direct-to-consumer offerings in at least one area.?
According to GfK's research, 40% of US customers plan to purchase more direct-to-consumer (D2C) goods and services if lockdowns and limitations are lifted. The analysis found that the most popular online shopping categories customers tested last year were clothes and fashion.
Legacy businesses like Nike, which have built up years of brand equity and reputation, are well-positioned to profit from D2C. Other legacy brands will adopt this business model in 2023 to engage consumers directly and take a larger share of the online shopping market.
Relying On First-Party Data
Consumer awareness and concern over how businesses track, gather and use their data is growing. 86% of Americans say that data privacy is a rising concern for them, according to KPMG research.?
Companies like Apple and Google are putting in place privacy protection mechanisms that force marketers to stop relying on third-party data and prioritise first-party data.
Last year, Apple released iOS 14.5, a mobile operating system allowing iPhone and iPad customers to accept or decline apps that follow their online activity and sell their personal information. Most consumers choose not to participate in this data collection.
Marketers are witnessing the decline of third-party data collection as web browsers like Safari and Firefox block third-party tracking cookies. Google, too, will phase out third-party cookies on Chrome in 2023.
The cessation of third-party data tracking forces marketers to develop new strategies for interacting with potential clients. One tactic brands will employ to learn more about the customer behaviour of their target market is the usage of first-party data.
Companies will increase first-party data collection through their websites, social media profiles, and other online assets, monitoring how users engage with these digital assets.?
Brands will also use opt-in communications, where customers may select to receive email communication from the company, to collect first-party data efficiently. Other strategies include newsletters, polls, loyalty schemes, and QR codes.
Responding To An Imperative For Supply Chain Efficiency
Almost every industry experienced supply chain disruptions because of the epidemic. Ernst & Young found that major supply chain interruptions impacted 57% of the companies it examined, with 72% reporting a negative outcome.
As consumers continue to be affected by supply chain interruptions, improving supply chain efficiencies will be a critical differentiator for retail businesses in 2023.?
According to research from mobile and IoT device management provider SOTI, 57% of global consumers have had to make alternate purchases or visit multiple physical stores to find things in stock. More than 35% of customers reported that the things they wished to buy were utterly unavailable.
Retailers will concentrate on enhancing the actual effectiveness of logistics—from product quality control to inventory levels, transportation, and cost reduction. This will lessen the significant pandemic-driven challenges to the supply chain.?
To maximise customer service, retailers will try to increase their supply chain operation's predictability, flexibility, and speed.
In 2023, there will be more brand acquisitions. Parent companies will manage several smaller brands through a single primary operation, enabling the supply chain team to achieve business goals and lucrative unit economics.
Retail Industry Technology?
Here are three retail innovations that will forever alter how your field employees operate:
QR Codes
Quick response (QR) codes are tiny, barcode-like patterns of black squares that may be scanned with a smartphone camera to retrieve information.
While they may appear out of date, conventions governing social distance between people suggest that QR codes are soon expected to be a common feature of shopping experiences.
RFID Technology
Managing inventory is sure to be on every retailer's list of least favourite duties. Retailers spend hours conducting inventory, and 62% attribute any inconsistencies to human mistakes.
Radio Frequency Identification (RFID) technology can address this issue or, at the very least, reduce the time spent counting store inventory. In only a few seconds, you may scan RFID tags to update stock levels in your inventory management system.
Advanced RFID use cases go beyond inventory management and include businesses like Amazon Go. Product shelving contains scanners that identify the products a consumer has selected. For a customer to pay at the exit, data from the RFID reader is fed back to a payment system.
Augmented Reality
A relatively new technology called augmented reality (AR) overlays visuals over actual environments. Consider Snapchat filters: animated ears, spectacles, or other features that cover your face and move in response to your movements.
The best and newest clients who are now shopping across channels will be sought after by retailers. They must use this knowledge to promote digital engagement and commerce more successfully through owned and paid channels, such as social and marketplaces. Here, developments in augmented reality (AR), live streaming, video chat, and mobile apps are expected.
AR is becoming more and more popular. According to data, 48.3 million will use augmented reality on social media in 2022.
Retail businesses are experiencing an overflow of this usage, bridging the gap between hygienic customers and the outside world. People approach a product as closely as they can without actually touching it, sometimes even trying it on.?
To assist customers in visualising how the things they offer fit into their lives, an estimated one-third of firms intend to invest in augmented reality.
Examples of AR in a retail setting include:
Virtual Fitting Rooms
Virtual fitting rooms make it simple for shoppers to try on your merchandise. The live stream camera superimposes the results of the RFID technology scanning the items in their hands onto the customer's body—no need to change into new clothes. The conversion rate for these AR engagements is more remarkable than average.
Extend the in-store Experience at Home
Offer online shoppers the chance to experience your retail store through augmented reality on ecommerce websites. Allow them to see life-size versions of products from the comfort of their own homes.
Virtual Product Tours
Make a big splash in experiential retail with in-store virtual reality activities. For instance, furniture retailers with low inventory levels may give customers a "guided tour" of the space using augmented reality (AR) technology to stream life-size merchandise directly to their smartphones.
It is an incredible and enjoyable experience to use a commonplace object in a standard setting to browse products and get wardrobe suggestions.
Real-Time Image Recognition
You need to know how your sales representatives can now employ image recognition on the field. They only need to take a picture of the shelf, and AI will perform the computations instead of them.?
Really lovely, no?
Well, new technological advancements have made image recognition (IR) even more advanced.
Thanks to real-time image recognition technology, your sales staff will now get shelf insights just a few seconds after capturing images. This entails that any necessary activities can be carried out quickly without the need to go back to the store for additional modifications.
Real-time IR is quick and precise and enables sales representatives to plan their days more effectively and concentrate more on what they do best: sell.
Smart Stores
Smart physical stores have touch pads, sensors, interactive screens, flexible displays, and other features representing what we imagined shopping to be in 50 years. Leaning into smart shops gives retailers and CPGs a chance to give their customers the most outstanding possible shopping experience.
On the surface, it could appear that the store would be the only one to gain. They can quickly address these problems and ensure a sale by having displays that alert them to stock levels, customer inquiries, category placements, etc.?
This will obviously benefit CPGs financially in the long run, but will it aid with retail execution?
Your sales reps are specifically interested in learning about the shelf KPIs that smart shops track. However, your sales representatives won't need to audit if a shop quickly collects these data points and shares them with you.
There's a solid reason field teams were established in the first place. Still, communication between brands and retailers isn't always the smoothest. If you know that a retailer has smart stores, negotiating data sharing can solve your search for the perfect store.
Smart checkout
The conventional checkout process is quickly losing its relevance.?
Long lines await retailers who don't use mobile point-of-sale equipment in their establishments.?
Long checkout lines are cited as a critical source of frustration by 60% of shoppers. However automation, in the opinion of two-thirds, may make things easier.
Let's examine the smart checkout features that are causing the checkout queue to disappear:
Contactless Payment
Payment processing is becoming faster thanks to contactless technologies.?
Customers can quickly pay for their purchases by tapping their credit card or mobile device on a payment terminal and leaving the store in just a few minutes.
Payment Installations
Many consumers admit to giving up on a purchase when their preferred payment option is unavailable. Buy now, pay later (BNPL) is becoming more common. Allowing customers to pay in instalments will aid them in financing pricey products.
Ship to Home
Not all consumers can take their in-store purchases home.?
Accept payment in-store and ship the item to the customer's shipping address, whether it's out of stock for the time being or just too hefty for the customer to carry home.?
Digital Receipts
Lately, many consumers opt to patronise businesses that reduce their carbon footprint. You can reduce paper waste and gather customer information by emailing a copy of the customer's receipt.
Self-Checkout
The ability to shop at their own leisure makes unattended retail more appealing to customers.?
Utilise self-check technology to carry on that experience.
Store Management
No matter how much technology alters the in-store experience, a successful physical site requires a human staff.?
Opening the store, displaying the products, and helping customers who still desire a human touch require staff members.
Because tedium affects everyone, take a broader perspective on your workforce than just retail employees. Instead of replacing your store's staff, use technology to empower them.
Independent retail requires that touchpoints add a personal factor even during virtual transactions.
Utilise team management tools to combine people and technology, such as:
Payroll
Payroll automation helps you to pay your employees on time. Add their pay, together with any commissions and tips.
Staff Scheduling
Because of the epidemic, more companies are using technology to remotely manage their staff by using tools like time attendance, scheduling, and messaging. These technologies help businesses manage their day-to-day operations from a single platform.
Retail Analytics
Utilise BeMyEye’s Real-Time Image Recognition.Take immediate action by using images taken by your reps to provide shelf KPIs and suggested repairs in a matter of seconds with an accuracy rate of 95%+ IR.
Get The Right Retail Tools In Your Store
The basic fact is that technology alters how consumers shop in physical stores.?
To remain competitive, your store must satisfy customers' needs.
So evaluate the tools you now use and look for places for improvement. Once you've mastered the fundamentals, try out the latest innovations in retail technology on your physical stores, such as smart checkout features.
But remember that starting from scratch is always preferable to overwhelming customers with new technology.
Are you wondering how to supercharge your retail execution and achieve your business goals?
Reach out to BeMyEye and wonder no more!