Emerging technology reshaping retail
By Bruce Ross & Chris O’Brien, Point Group. How global and local retailers are using technological advancements to influence consumer behaviour and create interconnected and deeply tailored shopping experiences.
By Bruce Ross & Chris O’Brien, Point Group. Retail spaces have undergone transformative shifts over the years, greatly influenced by technology, evolving consumer preferences, and emerging global trends. What does the future trajectory hold?
From the boom of e-commerce and heightened focus on customer experience to juggling between brick-and-mortar stores and online operations, retailers today grapple with a diverse set of challenges. Striving to meet the ever-evolving consumer expectations and managing intricate operations, like optimising supply chains, have become the order of the day.
Retail evolution and challenges
Modern retail is impacted by ecommerce growth, increasing mobile commerce, the rise of omnichannel retailing, and personalised marketing. As consumers become more eco-conscious, sustainability has emerged as a significant trend, prompting retailers to adapt their practices.
Technological advancements, ranging from AI, AR, and VR to IoT, have significantly influenced consumer behaviour, creating an interconnected and deeply tailored shopping experience. Retailers worldwide, like Nike, Sephora, Starbucks, and Warby Parker, have already begun to harness these technologies to stay relevant and ahead. Some examples include:
- Nike created immersive flagship stores, globally, that offer interactive experiences, personalised services, and customisation options. They focus on creating a community-driven environment that goes beyond selling products.
- Sephora utilises AR technology to enable customers to virtually try on make-up products. They provide tailored beauty consultations and use customer data to offer targeted recommendations.
- Starbucks transformed its coffee shops into experiential spaces by offering mobile ordering, loyalty programs, and customised recommendations. They curate music playlists and frequently update store layouts to provide an inviting atmosphere.
- Warby Parkerdisrupted the eyewear industry by combining online and offline channels effectively. They offer a home try-on programme, allowing customers to try frames before purchasing. Their physical stores provide individual assistance and immersive experiences.
- We are EGGat Cavendish Square, Cape Town, is a revolutionary concept that showcases smaller creative retailers while at the same time meeting the landlord’s need to fill a big space. There will be more demand for smaller independent stores that are in sync with consumers’ needs.
Data and insights
Innovation remains key. Retailers are increasingly integrating omnichannel strategies, focusing on experiential retail, tapping into the potential of subscription models, and leveraging the power of social media and influencer marketing. Strategies like offering customised product recommendations, seamless payment solutions, and implementing mobile payment options are also gaining traction.
Data-driven strategies dominate today’s retail decisions. Retailers use data analytics to segment customers, forecast demand, gain real-time insights, and enhance customer journeys. Furthermore, integrating online and offline data creates unified customer profiles, facilitating distinctive experiences. From AI in individual recommendations to AR/VR for immersive shopping experiences, emerging technologies play a pivotal role.
Retailers looking to stay ahead are investing in R&D and fostering innovation within their operations. And, as consumer consciousness grows, sustainability and ethical practices have become integral to modern retail. Practices such as eco-friendly packaging, ethically sourced products, and transparent communication about sustainability initiatives are now almost a norm.
Reimagining retail spaces
Reimagining the retail space isn’t without challenges. Whether it’s fierce competition, ensuring smooth technological implementation, or managing financial investments, retailers need to be agile and receptive to feedback. While bigger players have the advantage of scale, smaller retailers can focus on niche markets, build community ties, and offer personalised service to compete effectively.
The future of retail will continue to evolve with advancements in technology and changing consumer expectations. To stay ahead of the curve, retailers can:
- Embrace innovation: Stay updated with emerging technologies and adopt them to enhance operations and customer experiences.
- Anticipate customer needs: Use data analytics and market research to understand changing consumer behaviour and preferences.
- Foster agility: Remain flexible and adaptive to respond quickly to market trends and shifts in consumer demands.
- Prioritise sustainability: Incorporate sustainable practices and communicate them transparently to align with growing environmental concerns.
- Continuously evolving and leveraging technology: Retailers can create engaging, seamless, and personalised experiences that meet the evolving needs of customers in the future retail landscape.
Bruce Ross is Executive Creative Director – Retail and Built Environments at Point Group, and Chris O’Brien is Head of Sustainability and Innovation at Point Group.
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