7 Retail Technology Innovations Reviving the Stores in 2023
Andrew Makarov, Head of Mobile Development at MobiDev
Yevhen Krasnokutsky, AI/ML Team Leader, PhD
Advanced technologies help retail businesses refine every aspect of their service to their customers. This applies to both large and small companies. These technologies may directly impact consumers, or they may improve the efficiency of retail teams. Most importantly, businesses that produce new and innovative solutions to problems can stand out among the rest and get more profit. Let’s talk about seven retail technology trends that will shape business outcomes in 2023.
Trend #1: Bridging the Gap Between Online and Offline Shopping Experiences
In addition to selling products in brick-and-mortar stores, many storefronts are now offering buy online pick up in store (BOPIS) services, same-day delivery, and online shipping. With so many new ways to order goods, businesses need to implement point-of-sale systems in a more intelligent manner.
- When a guest orders a product online, how does that affect the store’s sales floor quantity in the database?
- If a product is on hold for a pickup order, does that reduce the count on the sales floor?
These are questions that a modern POS system must be able to answer. The key to this is more than just having systems in place to handle both online and in-store purchases. This will require a unified and connected system that integrates with other technologies. Integrating online and offline transactions, inventory, and promotions across all in-person locations and online stores are some of the greatest hurdles that software engineers seek to overcome when creating the next generation of PoS systems for retail businesses.
One critical component of bridging the gap between online and offline shopping experiences is payment. Being able to accept various digital payment methods adds convenience and consistency to the customer experience. Accepting buy now pay later, QR code payments, virtual payments like Google Pay and Apple Pay, and even cryptocurrency can provide better accessibility for online and offline shoppers. That is why retail business is closely related to innovation in fintech. The more affordable and effective the solutions offered by fintech companies are, the easier it is for a retail business to organize the smooth operation of online and offline stores regarding the financial part.
Trend #2: Simplifying Store Navigation With Indoor Positioning
Indoor positioning systems (IPS) have been a trend of interest for a few years now for helping users navigate indoor areas where GPS is not applicable. However, there are many more applications for this technology than first meets the eye.
On the surface, indoor navigation has a great deal of potential for user navigation. Stores, office buildings, airports, and hospitals have begun to realize this. Hong Kong International Airport uses this technology in their “HKG My Flight” mobile application. In the retail industry, Lowes and Target are utilizing this technology as well.
Implementing IPS Systems in Stores
Implementing in-store navigation solutions for your business can be a challenging task. The first step is hardware. Having the right infrastructure in place is essential, whether it be Visual Markers, Bluetooth beacons, Wi-Fi RTT, or Ultra-wideband (UWB). For example, Target chose to implement Bluetooth IoT lighting systems at many of its locations. When guests shop with the Target app on their phones in stores, they can get access to a map that helps them find their position in the store and find the items that they need.
This particular solution placed Bluetooth beacons in the lighting systems above the sales floor. However, other solutions may be possible based on the layout and size of the store since the use of beacons can be prohibitively expensive and provide insufficiently accurate navigation. After the infrastructure is set up, all that’s left is to develop the software that can take advantage of it.
IPS systems have much more potential than just helping guests shop. Having data about where guests shop in the store has three beneficial implications: targeted suggestions, tracking customer traffic, and item tracking.
When guests are in a particular part of the store using the store’s official app, the IPS system can track where they are and offer them targeted suggestions on products and deals on their smartphones. This can improve conversions as guests shop.
Customer Traffic Data
More profoundly, data about where shoppers are in the store is useful for improving the placement of products on shelves. It also helps answer a few questions:
- Where do guests go when they enter the store?
- Do they tend to prefer one location in the store over another?
- Are there any locations in the store that guests tend to avoid?
All of these questions can be answered by IPS tracking. Of course, anonymized data is important to protect user privacy, but these analytics could be crucial for helping business owners make decisions on where to place certain products. In fact, this data could be a valuable bargaining chip when negotiating with vendors with regard to how much they should pay to have their product included in a particularly high-traffic area of the store.
RFID technology used for tracking down products in retail locations is useful but short-range. As these technologies improve, IPS can offer more detailed data on the locations of products on the sales floor. This can not only help to improve the efforts of asset protection but it can also make it easier to return moved items to their correct locations.
IoT devices are becoming smaller and cheaper as time goes on, but right now the IoT technology may need to be limited to a few high-value items if it’s to be implemented. Property managers can also use this technology to track work equipment like laptops and mobile computers.
For tasks like order fulfillment, retail workers can use their work devices with IPS maps to find the item’s location in the store. If the item has IPS tracking set up, they could navigate to the item instead. This would be useful in instances where the item has been moved from its original location by mistake.
Trend #3: Transforming Customer and Employee Experience With Augmented Reality
Augmented reality has been a big part of retail for years now. However, Facebook’s rebranding to Meta has exacerbated augmented reality’s importance. Regardless of one’s opinion about what the future of AR in the metaverse might look like, there’s no mistaking that businesses are providing more immersive and digitally consistent experiences for customers. This, at the very least, provides many opportunities for businesses to engage with audiences in new and valuable ways.
A few paths toward providing these immersive experiences involve virtual try-on solutions, indoor navigation powered by augmented reality, and other applications. This is one of the key technologies bridging the gap between digital ecommerce storefronts and brick and mortar shopping.
Try Before You Buy
Some of the most useful applications of AR that help digital customers in the retail industry are the “try before you buy” applications. One of the best examples of this is virtual try-on technology. By using AR technologies, shoppers can see how they look when trying various kinds of products on themselves. Similarly, they can also see what other kinds of products look like, such as furniture. Virtual try-on technology is already being implemented by stores like Sephora, Target, Ikea, and more.
In fact, Ikea’s version of this lets you do much more than just see the size and shape of furniture. Ikea Studio can use the unique LiDAR technology on iPhones to display rooms, measurements, windows, doorways, and more to visualize interior design like never before.
Case Study:AR Solution for Home Renovation
Although indoor positioning was already a trend we discussed, when combined with AR, it can enrich the experiences of customers and workers even further. Indoor navigation powered by augmented reality technology can help shoppers find the items that they need in store just by following directions on their phone’s screen. This can be very engaging for shoppers if implemented correctly and can provide more opportunities to show guests targeted suggestions on-screen.
AR navigation can help retail workers too. Some of the most popular devices for workers in the industry, Zebra’s TC52, TC57, and TC77 portable computers are ARCore-capable. With the potential of these devices to use their cameras for AR navigation, order fulfillment workers can simply look for directions on their screen to find the aisle that they’re looking for.
Aiding Retail Workers with Other Tasks
Augmented reality can be useful in helping retail workers visualize shelves before they are set up. By using a planogram as a base, AR-enabled enterprise devices can display a 3D planogram on the sales floor to serve as a guide for the setup process. This can make it easier for workers to set pegs, shelves, and fixtures in their appropriate locations.
Augmented reality could also help workers identify problems with a shelf. Combined with AI-based object detection technologies used by manufacturing industries, a worker could hold their device’s camera up to a shelf to find areas for improvement. By comparing the shelf with its corresponding planogram, AR rendering can show the worker which parts of the shelf do not align with the planogram. This could be an out-of-place product, improperly zoned items, and even the identification of damaged products.
Trend #4: Smart Store Automation With Artificial Intelligence
In every one of the previous trends, artificial intelligence has played a role in some fashion. For example, modern AI powers AR scene analysis. However, AI can offer many more benefits in the retail industry than this. Demand forecasting, inventory management, and other kinds of analysis on consumer behavior use artificial intelligence.
The Future of Self-Checkout
Thanks to innovations in artificial intelligence and Internet of Things technologies, self-checkout has become more advanced than ever. With evolved sensor arrays, businesses can choose to highly automate checkout processes for customers. This allows customers to shop more conveniently.
Amazon takes it a step further with its Amazon Go Grocery model stores powered by Just Walk Out. The project uses computer vision, sensor fusion, and deep learning. The store’s rich network of cameras and IoT sensors can detect when a consumer has taken an item off the shelf and placed it into their cart. When the guest leaves the store, the system charges their credit card for the items that they took.
This requires not only a deep understanding of what the guest has placed into their cart but also where items are in the store. If an item moves away from its shelf, the system must still be able to keep track of how much of it that it has on hand.
However, not every business is as big as Amazon. It could be difficult to implement an advanced self-checkout solution for your store. Luckily, AI-based self-checkout technology is scalable. Vending machines can incorporate this technology. For example, customers can open a designated refrigerator and remove an item from it. After closing the door, the machine can charge their card automatically. This allows for a seamless experience that is more accessible for smaller businesses.
Inventory Management Powered by AI
Computers and rich databases drive the retail industry in 2023. However, the complexity of these systems has resulted in a number of inefficiencies from errors. Retail workers may find that the system has incorrect sales floor quantities of certain SKUs. This also leads to problems like backroom location accuracy. Tackling these issues is critical to saving time and money for businesses.
Artificial intelligence can help us manage these inventories more effectively with several different methods. For example, AI can analyze consumers’ spending to predict when certain types of items may be more likely to move around on the sales floor. This can drive the system to require manual auditing of certain areas over others. While auditing the entire store is a challenging task, auditing only the areas that need attention is much more effective.
If a more advanced network of cameras isn’t the solution, perhaps the work can be done manually while still using machine learning algorithms. Instead of auditing empty spots on a shelf one by one, a retail worker could take a photo of each shelf section with their device. Comparing the image to a planogram with object recognition, deep learning software could speed up the process. This would allow the system to see which items were missing. However, this system requires careful zoning. This method also may not be able to detect quantities, as items may obstruct each other.
Consumer Behavior Analysis
Earlier we touched on this with an analysis of in-store foot traffic with indoor positioning systems. However, the potential of analyzing consumer behavior doesn’t stop there. In addition to their spending habits, we can measure their interest in what they’re spending money on alongside their demographics with artificial intelligence. This can give businesses a better idea of how they should be marketing to their audiences.
The focus so far has been analyzing consumers that are already in the store, but what about drawing in new ones? A store using Kimola’s platform decided to remodel a location for soccer fans using data analyzed by AI. By using social media accounts as a basis for the data, the algorithm was able to determine the most optimal location for the store. As a result, they saw a 210% sales increase when redesigning this store for soccer fans.
This idea extends to e-commerce as well. Online storefronts can track user behavior. This includes what items their cursor hovers over, how much time they spend on a particular page, as well as where they come from. This type of information is familiar to any web marketer using Google Analytics.
However, behind that technology is a powerful AI engine that can search for connections and trends faster than we can on our own.
Trend #5: AI-Driven Demand Forecasting
This is a powerful tool used by some of the largest brands in the world. Demand forecasting helps businesses build trust with their customers. It allows them to supply efficiently in preparation for market changes. This is especially important in disaster and emergency situations. During times of crisis, supplies can be short. As products fly off the shelves, stores that are able to adapt and get their hands on high-demand items are able to thrive.
Amazon is again an example of a company that leverages the power of machine learning for this purpose. This technology can also improve inventory planning, and relationship management for both customers and suppliers, as well as logistics, manufacturing, and marketing.
Demand forecasting leads to more sustainable consumption and production. When demand is predicted much more accurately, items can be produced and ordered according to how much is needed by the consumer.
AI-based demand forecasting approaches are much more versatile and adaptive than their traditional counterparts. Since businesses can implement machine learning much more quickly, they can better follow customer demand trends. With ever-shifting customer behaviors, it’s more important than ever that your business is deeply interested in data on customer spending trends. Technologies that analyze this data to get meaningful insights are key to maintaining a competitive foothold in the market.
Trend #6: Robots and Automation in Retail
Closely related to artificial intelligence is the hardware of robotics. This has a multitude of applications, such as delivery, inventory management, and customer service.
As artificial intelligence improves, so too have autonomous vehicles. Delivery is evolving in 2023 and autonomous delivery is becoming the new norm. The Safeway cart, developed by Tortoise, was introduced last year as an autonomous delivery vehicle. Serve Robotics, formerly called Postmates X, is also making a delivery robot for Uber. Grubhub successfully rolled out autonomous food delivery robots to college campuses like the Ohio State University. The company is working to expand its robotic delivery to other campuses.
Businesses are also exploring retail delivery with drones. Verizon and UPS Flight Forward are working to leverage 5G technologies to improve drone delivery in Florida.
Customer Service Robotics
Retail businesses are also exploring robots for customer service. In January of last year, Hyundai introduced a robot called DAL-e that would aid in automotive showrooms. The robot can greet customers and help them find the vehicle that meets their needs. The robot also uses facial recognition and AI to detect if the customer is wearing a mask and to advise them appropriately.
Robotic Inventory Management
Special hardware can sometimes aid with inventory management where ceiling and shelf-mounted cameras cannot. Machines like SmartSight can automate the process of identifying misplaced items on shelves and sales floor quantities and alert workers when certain items are running low.
Trend #7: Voice Commerce
As artificial intelligence improves in 2023, so does natural language processing (NLP). Smart assistants like Google Assistant, Alexa, and Siri are becoming increasingly advanced in their speech recognition and responsiveness. Their ability to serve customers in the retail industry has improved tremendously. Ordering products from home with your voice, with or without a screen, leaves a lot of nuances to be explored.
Smart home devices are expected to be used in more than 77 million homes in the United States by 2025, meaning that this is a huge opportunity that businesses can take advantage of. Other kinds of IoT devices in customers’ homes can prove valuable too, such as AR-capable smart mirrors. The most important part of the process is making sure that these devices are not intrusive and are genuinely helpful for the consumer.
Walmart’s Voice Ordering is a notable example of this technology in action. By asking smart speakers to add products to a cart, they can place orders entirely by voice. Walmart workers then make these items available for pickup.
Read also:AI Virtual Assistant Technology Guide
Challenges and Future of Technologies in Retail
As disruption impacts retail businesses, those who are quick to innovate will thrive.
Capturing and Maintaining Customers
In an increasingly digitized world, it’s important for businesses to remember the value of rich communication and engagement with their customers. Providing immersive experiences both online and in person can achieve this goal.
Thanks to demand forecasting tools available to businesses in 2023, managing inventories has become easier than ever. However, there will always be challenges that will persist into the future. Setting clear and focused goals will help solve these problems.
The Problem with Upgrades
As technology improves in the retail industry, legacy technologies like older PoS systems, and inventory management solutions are being replaced. However, during these transitions, many hiccups tend to bog down the process. There are sometimes oversights and unforeseen issues that require special attention.
Partnering with Vendors
The most important part of introducing innovative technologies into the retail space is the relationship between the business and the vendor developing the technology. How they work together to develop and maintain the solution determines the success of the product, no matter if the technology is intended for the consumer directly or if it’s intended to aid the business’s own tasks first.
What the Future Holds
As technology evolves, there are many new niches waiting to be monetized and opportunities to take advantage of. Digital transformation and a data-driven culture will continue to disrupt businesses that cannot adapt to meet rapidly changing customer preferences, new technologies, and supply chains. That’s why retail companies must provide consumers with an experience that they find engaging, accessible, and valuable.
Businesses that make that first move to have thoughtful discussions about their needs and ideas with retail software developers will be the forerunners in a future where consumers have more information available to them than ever.
If you’re ready to take that first step into the future of retail, all you have to do is reach out.
Read more about the Retail Software Development services we provide.