2020 was a bittersweet year for the retail industry due to the coronavirus pandemic. While businesses that were able to adapt quickly to the sudden change in market dynamics and customer behavior survived, others were forced to either pivot or shut shop. Many retailers also adopted digital technologies for their survival during COVID-19.
Several retailers have continuously incorporated technology to improve their processes, operations, or customer experience, both in-store and online. However, with changing customer behaviors and advancements in technology, several technology trends emerge.
We asked a few experts what they think would be some of the important retail technology trends to look out for in 2021. Here are some of them.
1. AI Will Take on a Bigger Role in Customer Experience
There has been much emphasis on AI playing a pivotal role in enhancing the customer experience (CX). However, there was more hype than reality and a few proof of concepts than actual implementation. In 2020, several big brands moved beyond the proof of concept stage and started implementing AI solutions such as chatbots and virtual assistants in their contact centers and online assets. Robots have also been tested to serve customers in select stores across the world. We can expect to see more of these robots on shop floors and virtual assistants addressing our queries and concerns in the coming year.
Further, the popularity of smart AI-enabled voice assistants is growing. According to InvespcroOpens a new window , voice shopping is expected to touch $40 billion in the U.S. alone by 2022. Hence, more shopping activity can be expected on these devices, both in-store and ecommerce, in the coming year.
        Olga Andrienko
In the overcrowded and highly competitive ‘traditional’ SEO industry, optimizing for voice search is still something new for local businesses. Yet, thanks to the range of devices and the variety of algorithms determining who shows up for a given query, voice search provides many opportunities for those locals who are still struggling to get their sites onto the front page of Google.
– Olga AndrienkoOpens a new window , head of global marketing, SEMrushOpens a new window
Learn more: How Does AI Help with Social Media Marketing? A Detailed Look
2. Data Visibility Will Gain More Importance
While AI and ML will play a bigger role in enhancing customer relationships and experience, they still depend on customer data. Brands currently face the challenge of insufficient and disparate data. To add to this challenge, they will have to get used to a world without third-party cookies. Due to the lack of available information and siloed data, they are struggling to deliver a seamless experience to their customers. Hence, creating a single view of data will become essential in brands regaining control of their customer relationships. “Brands today are grappling with incomplete information about their customers,†says Ashish SinhaOpens a new window , managing director, India, APAC & MEA, EpsilonOpens a new window . “This is largely because they do not have the means to combine data gleaned from their loyalty programs, email/digital marketing, and in-store interactions and create a single view of the customer. Added to these limitations is the impending deprecation of third-party cookies, privacy regulations, and the immense challenge that brands face with large consumer platforms, known as walled gardens,†he explains.
        Ashish Sinha
Despite the enormous spends into some of these walled gardens, the marketer has no visibility into the relationship with the consumer—the platform does. This lack of visibility does not allow the brand to personalize the full journey of a customer and give a differentiated experience.
 – Ashish SinhaOpens a new window , managing director, India, APAC & MEA, EpsilonOpens a new window
Giving an example, Sinha adds, “Let us look at this example. You are an auto dealer, and you know that a customer is looking to buy the latest SUV model based on their online research and behaviour, comparing prices, models, and brands. Imagine what you could do with data at this scale and precision to personalize their shopping experience with you? It is time for brands to regain control of their customer relationships, while adhering to privacy norms.â€
3. There Will Be Increased Focus on Automation and Hyper-Automation
Automation has traditionally played an important role in retail, the most popular areas being point of sale (POS) and online checkout. It will continue to do so as more ways of payment and technologies emerge. However, automation extends into other areas such as managing inventory, gaining important product and customer insights, optimizing the supply chain, delivering products, and providing personalized experiences to customers. Several retailers are already using robotic process automation (RPA) and hyper-automation using machine learning (ML) and AI.
RPA and hyper-automation will play a more critical role in the next year. For example, it may be used to automate marketing personalization, where the automation engine can be trained to decide what offers and product recommendations to be given to a particular shopper.
According to Alex TimlinOpens a new window , senior vice president verticals, EmarsysOpens a new window , 2021 will be the year marketers can personalize online experiences for each individual customer for the first time.
        Alex Timlin
Breakthroughs in artificial intelligence (AI) and visual recognition are making it possible for retailers to automate product recommendations online to customers based on behavior and preference.
– Alex TimlinOpens a new window , senior vice president verticals, EmarsysOpens a new window
“Visual recognition can pick up on size, shape, pattern, style, color, and more of any product from just a product photo on the website,†Timlin suggests. “AI will then be able to automatically promote certain products to individuals based on their preferences without any human intervention. This is noticeably more effective than firing generalized messages at swathes of customers, usually based on broad assumptions of taste defined by audience segmentation.â€
4. Focus on Immersive Technologies Will Increase
Immersive technologies such as virtual reality (VR) and augmented reality (AR) are already being used in the retail industry in various applications. These applications include in-store navigation, virtual product placements, 360-degree videos, and visualization tools like ‘magic mirror’. The COVID-19 pandemic and the resulting stay-at-home mandates have given impetus to these technologies on ecommerce platforms. According to a report by StatistaOpens a new window , the total consumer spending on these technologies is expected to reach 6.36 billion by the end of this year.
According to other studies, more consumers increasingly prefer to use these technologies to evaluate products. Hence, once a nice-to-have technology is now becoming essential for brands to enhance customer satisfaction and experience. Further, as more shoppers now look for improved experiences online and in-store, immersive technologies will help brands bridge the gap between the online and offline world.
Further, immersive technologies will not be limited to big brands such as Ikea, Walmart, and Lowe’s. In 2018, Shopify launched Shopify AROpens a new window to help small businesses create their own AR experiences for customers.
Learn more: 5 Ways Immersive Technologies Are Remodeling Retail’s Future
5. The Approach To Influencer Marketing Will Evolve
Influencer marketing has slowly evolved over the years. What was once more about selfies, enhanced images, and brand promotions for remuneration has seen deeper collaboration between brands and influencers in the last couple of years. Authenticity is a crucial aspect that is important to brand-influencer collaboration. People are increasingly losing trust in brands. Audiences are increasingly expecting brands to showcase authentic voices in their communication. If they feel that either the brand or the influencer is dishonest, they will not hesitate to walk away. Hence, authenticity will continue to play a vital role in 2021.
From a content perspective, the video content format will be an important aspect of influencer partnership. With shoppers still hesitant to set foot into physical stores, the next best way to experience a product is through videos. Hence, more influencers will be expected to create videos to build trust. Several brands are already partnering with influencers to publish video content on Instagram (IGTV, Live, and Reels), TikTok, and other social platforms.
6. Customers Will Have More Payment Options
One retail trend that has been evolving over time is the flexibility in making payments. As technology advances and customer needs evolve, shoppers expect brands to provide more flexibility to pay for goods and services. This is even more important now as the COVID-19 pandemic compelled various generations, from Generation X to Generation Z, to use ecommerce for shopping.
As such, payments on online portals will no longer be restricted to credit cards, debit cards, online transfers, or even PayPal. With more payment solutions entering the market, shoppers will look for more ways to pay, including mobile wallets, peer-to-peer payments (e.g., Venmo), and cryptocurrencies, among others. In fact, several retailers have already started implementing these payment options on their ecommerce portals. This can be expected to become commonplace in 2021.
Another payment option gaining much popularity is ‘buy-now-pay-later’ or point of sale financing. Several vendors such as Affirm, Klarna, and Blispay are already gaining popularity among millennials and the younger generation.
Further, as more in-store shoppers become concerned about their health and safety owing to the pandemic, brick-and-mortar stores, too, are adding multiple payment options. For example, WalmartOpens a new window and other retailers have already incorporated scan-and-go, self-checkout, and touchless payment options in their stores.
Learn more: Walmart Store Redesign: A Retailer’s Guide To Boost In-Store Shopping Experience
Heading into the Future
As we head toward 2021, the line between physical and digital stores is thinning rapidly. Customers expect seamless convenience and experience wherever they are, be it on an online portal, mobile device, or a physical store. This will define how retail technology will evolve. Knowing how customer behavior is evolving and where retail technology is headed will help you fill the gaps, improve your offerings, and gain an advantage over competitors.
What retail tech trends do you think will define shopping in 2021? Do let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .