Shopping has changed many faces during the last few decades. Going from in-store to online, consumer spending has changed substantially. Today, like everything else, tech has also found its way into retail.
Retail technology is set to revolutionize retail stores as we know them. In fact, companies now have retail technology managers to handle tech-led retail sales. A retail technology manager is a person who specializes in retail store operations and retail business systems (like inventory management, CRM, supply chain management, etc.).
Retail technology managers work with various vendors that provide point-of-sale (POS) software, mobile POS solutions, web surfacing products, and other technologies in order to give “the customer experience” that is expected from today’s retailers.
In retail technology offices, there are individuals who understand how every single piece of hardware works in the retailer’s retail system, and they analyze requirements for both internal needs as well as retail clients.
Below, we explore the potential of technological innovations in retail and how they help boost sales and drive consumer spending.
What are Retail Technology Innovations?
Retail technology innovations refer to technologies that the retail sector can use to make retail stores more efficient, increase sales and retain existing customers.
Retail technology innovation usually consists of a retailer investing in technologies that improve customer service throughout all channels (in-store, online, mobile), as well as provide information that they can use to develop future products.
Examples of Retail Innovation Technology
Here are some examples of retailers using innovative technological advancements to drive sales and consumer spending.
Uniqlo : The Japanese retailer uses a ‘neuroscience stylist’ that suggests apparel to customers based on their mood. The company uses a wearable technology called UMood, which the customers wear on their heads. As the gadget receives psychological reactions and signals from the customer’s mind, it sends them to the algorithm, which further shows suggestions to the wearer for clothing items.
Bloomingdale : In their Manhattan store, Bloomingdale has six window displays showing Ralph Lauren clothing items. Customers, while standing on the sidewalk, can tap the color swatch of their liking on the screen.
As a reaction to this, a clothing item in that color will appear on the screen. If the consumer likes the product, they have to text ‘Polo’ to receive an online link for the product’s checkout page.
On the one hand, this retail technology makes shopping more interactive. On the other hand, it allows the customers to buy products without ever setting foot in the store.
Kohl : Kohl has taken the use of retail digital technology up a notch by offering digital fitting rooms to its customers. The buyers can ‘try on’ clothes in virtual fitting rooms and even put together outfits by pairing different accessories and bags.
How Important are Retail Technology Innovations?
Statistics show that retail technology innovations are paramount in managing the spending behavior of today’s consumers. The US Census Bureau’s report showed that retail spending increased 18% from last year and 0.6% from May to June.
What Are Merchants Doing to Boost Sales?
According to Emarketer, merchants are taking advantage of this trend by doing the following:
Making In-store Technologies Better
As evident from the examples discussed above, merchants are keen on improving in-store retail technology to get consumers to spend more.
For instance, Walmart has launched a store with self-checkout only, making it easier and comfortable for people to shop, given the fear of virus transmission. On top of that, it helps eliminate the inconvenience of waiting in long lines.
But Walmart is not the only retailer that is using retail technology innovations. Kroger has been using Caper smart carts. These smart tech gadgets calculate the total of the customers’ purchases and apply relevant discounts, cutting down their time in the store.
Using Omnichannel Strategies
Retailers are also realizing the importance of being present at every channel their consumers could possibly use. For instance, Sam’s Club uses Scan & Ship, which is a feature allowing customers to purchase products in the store and later get their cart delivered to their homes.
Similarly, some retailers are also allowing customers to pay through mobile wallets and apps. For example, 7-Eleven lets customers pay using the retailer’s app, saving them time at the checkout. Considering the success these retailers are having with these strategies, it’s clear that more companies need to take an omnichannel approach to increase sales.
Retail technology has already played a fundamental role in the consolidation of retail channels (physical and digital) into one omnichannel experience. This is particularly relevant for retailers who have invested heavily in a multichannel strategy, such as Best Buy, John Lewis, and Tesco.
Emerging retail technologies are allowing these companies to deliver a consistent omnichannel customer journey across both physical stores and online platforms.
Consumer Spending Trends for the Future
Emarketer experts forecast that consumer spending will be on the rise in the future, and it will take the following trajectory.
Increase In Back-to-School Spending
As schools open up again after remote learning, retailers will see an increase in sales, especially in the school supplies, clothing, and educational necessities sectors.
Emarketer had already forecasted back-to-school sales to go up to $95.83 billion this year. So, there’s a huge potential for retailers to bag this opportunity by employing retail technology innovations in their stores and online channels.
Expenditure on Services Influencing Growth Rates
A Deloitte report shows that the spending on entertainment, traveling, and dining in the US will increase by 6.2% this year. Therefore, retailers who are directly or indirectly associated with these industries, such as food and beverages, can leverage retail technologies to grow.
Considering the potential of these technologies, retailers should specifically focus on spending more on services that will bring in more sales.
Conclusion
Therefore, retail technologies are bound to alter the way retail works by innovating processes and automating retail business tasks.
Since customers are on board with these technologies, it’s about time retailers also play their part in increasing convenience for consumers. More importantly, an omnichannel experience driven by retail technology can align consumer spending as per a retailer’s business goals.
