Tech Forces Shaping the Retail Industry
The retail industry remains one of the most lucrative sectors for value chain providers with publicly available reports suggesting that the global market size for retail may reach about $ 32 billion USD by 2023, growing at a CAGR of over 5%. This lucrative nature of the sector has resulted in ecosystem players consistently striving to evolve and reach the next level of advancement particularly on aspects related to customer experience, convenience for end-users, business excellence, and even business transformation altogether
How tech is disrupting retail
A key enabler to achieve the above-listed parameters is technology. The influence of technology within the retail sector is so pronounced and significant that the convergence of the two is now popularly termed as ‘RetailTech’. RetailTech encompasses disruptive technologies such as Data Analytics, Artificial Intelligence, Machine Learning, Robotic Process Automation (RPA), Augmented Reality, Virtual Reality to cite a few.
The resultant positive impact of the application of these concepts is that the retail industry has transformed to an altogether different level. It is now possible to have individualized targeted marketing as per behavior analysis of each customer which helps make the most of each footfall. The business model of the retail segment has been completely transformed with a nexus of technology forces disrupting the industry.
India’s retail segment too has been considerably embracing the benefits of RetailTech– either through value chain partner engagement or by building its capabilities around it. This segment has the advantage of not having many legacy systems to worry about and of the ability to learn from the advanced western world. However, the broad spectrum of customer tastes and shopping patterns poses a disadvantage to the retail segment.
Advanced data technologies are tested here to the core. One such instance is of Walmart India acquiring an Indian startup specializing in Artificial Intelligence (AI) to sharpen its customer experience quotient. The acquisition allowed Walmart India to enhance its data analytics and machine learning capabilities. Walmart is reported to be planning to acquire about five startups in the RetailTech space.
THE ROAD AHEAD
Today RetailTech has transpired into a mainstream technology proposition. For instance, a few of the prominent applications of new-age disruptive technologies that picked up pace in the year gone by including the use of Data Analytics combined with Artificial Intelligence to enable retailers to generate, Analyze Data and make actions based on the data to hasten decision making.
From a cybersecurity perspective, AI combined with Machine Learning can now enable computers to record and keep up with big data produced by security systems. It can detect any abnormality from the normal patterns and send distress signals to warn against a threat or a breach.
From an inventory management perspective, the use of IoT can now offer precise visibility into the product cycle by providing real-time updates about the status, location, and movement of each product.
This is a direct reflection of the fact that user experience is gaining the utmost attention. The user experience encompasses multiple dimensions such as customer centricity, customization, speed, agility, convenience, ease of use, digital payment avenues, security, and operational efficiency to name a few.
The ongoing year is expected to see a further rise in migration from a B2B to B2C environment within the retail industry. Interestingly it will be developing countries that will embrace RetailTech in a big way as compared to developed markets. The reason behind this anticipated trend is that it will be the technology that will act as a savior to overcome age-old issues.
To summarize, the RetailTech trends to watch out for actual mainstream implementations in the ongoing year will be:
- Leveraging data analytics for management to take data driven actions for store/channel operations.
- ML and AI driven customer engagement and recommendation systems.
- RPA to take care of conventional processes.
- Use of IoT to streamline inventory management.
- Adoption of B2B applications and systems influenced by B2C.
A couple of emerging trends around the corner are Drones for inventory management or product delivery or new innovative business models connecting completely different segments. The new-age digital wave is enabling possibilities way beyond the normal imagination and the future certainly appears exciting for the retail industry!