Digital transformation of the retail industry is rising exponentially, especially after the pandemic disrupted supply chains globally. Retailers across the world are seeking new ways to understand and reach a broader customer base, drive sales, and build a unique brand value. The top Retail Industry trends in 2023 include innovation through artificial intelligence (AI), omnichannel distribution, and store automation, among others. While many startups and scaleups are building solutions to create a resilient retail supply chain, immersive technologies and metaverse are taking center stage in providing a highly curated customer experience. Finally, driven by rising climate concerns and informed consumers, retailers are offering sustainably sourced products while also lowering their own carbon footprint.
Innovation Map outlines the Top 8 Retail Industry Trends & 16 Promising Startups
For this in-depth research on the Top 8 Retail Industry Trends & Startups, we analyzed a sample of 2 721 global startups and scaleups. The result of this research is data-driven innovation intelligence that improves strategic decision-making by giving you an overview of emerging technologies & startups in the retail industry. These insights are derived by working with our Big Data & AI-powered StartUs Insights Discovery Platform, covering 2 500 000+ startups & scaleups globally. As the world’s largest resource for data on emerging companies, the SaaS platform enables you to identify relevant startups, emerging technologies & future industry trends quickly & exhaustively. Moreover, the Retail Industry Innovation Map reveals 16 hand-picked startups, all working on emerging technologies that advance their field.
Top 8 Retail Industry Trends
- Retail Fulfillment
- Omnichannel Commerce
- In-Store Automation
- Smart Checkout
- Immersive Customer Experience
- Artificial Intelligence
- Big Data & Analytics
Tree Map reveals the Impact of the Top 8 Retail Industry Trends
Based on the Top 8 Retail Industry Trends & the Innovation map above, the Tree Map below illustrates the impact of the Top 8 Retail Industry Trends in 2023 and beyond. The global pandemic exposed the vulnerabilities of the existing supply chain, making technologies empowering retail fulfillment the biggest trend. A multi-channel presence besides physical stores is no longer an option but rather a necessity to remain competitive in the industry. Retail stores are automating mundane tasks such as merchandising and customer service to account for worker shortages and increase employee productivity. Additionally, it is paving the way for smart payment and self-checkout systems. Further, web3 technologies, metaverse, and extended reality (XR) are further enabling the retail sector to offer hyper-personalized customer journeys and optimize operational efficiency. Supply chain transparency and sustainable practices are also gaining importance in the retail industry.
Global Startup Heat Map covers 2 721 Retail Industry Startups & Scaleups
The Global Startup Heat Map below highlights the global distribution of the 2 721 exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals significant startup activity across the world from USA and Europe to India and the rest of the Asia-Pacific.
Below, you get to meet 16 out of these 2 721 promising startups & scaleups as well as the solutions they develop. These 16 startups are hand-picked based on criteria such as founding year, location, funding raised, and more. Depending on your specific needs, your top picks might look entirely different.
Top 8 Retail Industry Trends for 2023
1. Retail Fulfillment
Retailers are shaping their business strategies around retail fulfillment to achieve better market penetration. Last-mile delivery services and micro fulfillment centers are proliferating as customers expect same-day or faster order deliveries. Physical and online retailers are also providing local and hyper-local delivery services by repurposing stores as distribution centers or through collaboration with logistics partners. Further, buy-online-and-pick-up-in-store (BOPIS) and curbside pickup drive store-based fulfillment. Moreover, automating fulfillment services allow retailers to tackle worker shortage, enable instant fulfillment, and improve order tracking. For this, startups are leveraging last-mile delivery using automated guided vehicles (AGVs), autonomous mobile robots (AMRs), and drones.
Urbx Logistics provides Automated Micro Fulfillment
US-based startup Urbx Logistics develops automated storage and retrieval system (ASRS) for grocery and eCommerce fulfillment. The startup’s system, Curbside, enables micro-fulfillment in existing stores by automating picking and packing with its AMRs, Grid and TowerBots. The system is customizable to store requirements and includes racking systems, totes, pick stations, and software to manage and control the micro warehouse. Urbx Logistics thus cuts down order fulfillment and processing time, increasing the delivery efficiency of local and multi-store retail chains.
Delivers.ai offers Autonomous Last-Mile Delivery Vehicles
Turkish startup Delivers.ai facilitates contactless and zero emissions grocery and package delivery through its proprietary navigation technology and AGVs. The startup leverages camera-based sensor fusion and AI to navigate its autonomous robotic delivery vehicles through traffic signals, pedestrian, and cycling lanes. This mitigates food tampering as well as ensures timely and contactless delivery. Cloud kitchens, virtual restaurants, and online order platforms use Delivers.ai’s solution to optimize last-mile deliveries.
2. Omnichannel Commerce
Both digital-native and brick-and-mortar retailers are embracing a unified approach to gain consumer attention. While the big box and small store retailers are integrating eCommerce and mobile commerce, online-only retailers are inventing new ways to offer physical experiences for customers. Phygital retail enables a natural transition to a direct-to-consumer (D2C) strategy while enabling retailers to adapt to minimum inventory small store formats. As a result, brands are spending more on targeted digital advertisements for customer retention, demand shaping, and loyalty-building. Social media platforms are the new storefronts that enable micro sales without redirecting customers to the store website. Live streaming, post sharing, podcasting, and influencer networks on social media are all advancing social commerce. Additionally, technologies such as voice and visual commerce generate opportunities for retailers to interactively upsell, cross-sell, and remarket their offerings.
Confer With enables Social Commerce
Confer With is a UK-based startup that provides a social commerce platform to create a store-like shopping environment for customers. The platform equips in-store staff to directly share product images as well as provide demos and shopping recommendations while engaging customers with video. This live video shopping approach enables retailers to provide a personalized experience and boost customer loyalty.
Pairzon simplifies Omnichannel Marketing Automation
Israeli startup Pairzon combines customer data from online and offline touchpoints to automate omnichannel marketing. The startup’s eponymous platform utilizes AI to enrich first-party business data from unknown in-store shoppers and assigns it an online identity. This data is used to form audience segments and automatically deliver personalized promotions to previously unreachable shoppers online. This optimizes digital marketing efforts and drives revenue for physical retailers and brands.
3. In-Store Automation
To provide a better, hygienic, and safer in-store experience, retailers are using cleaning robots and chatbots that offer optimum times to visit stores. Startups are also upgrading the retail workforce to adapt to social distancing norms, operate in sync with an automated store, and increase overall productivity. These advances enable them to manage orders from home and function as virtual shopping assistants. Startups also leverage conversational chatbots to answer customer questions. Further, the Internet of Things (IoT), 5G, AI, edge computing, augmented reality (AR), and virtual reality (VR) are automating store operations. These technologies enable retailers to quickly manage shelf space, inventory levels, and product labels. It also guides customers through large stores via store navigation and positioning. In-store automation equips retailers with useful data points that uncover revenue opportunities, engage customers, and optimize store operations.
Milky Way AI enables Remote Shelf Management
Singaporean startup Milky Way AI builds InstaShelf, a proprietary merchandising platform for remote shelf management. It combines computer vision and AI algorithms to analyze shelf photographs in real-time. The platform then provides insights into product performance and suggests corrective actions such as shelf replenishment. It also generates alerts if products are out-of-stock, placed out of specification, or priced incorrectly. This reduces the time and cost of manual shelf audits and empowers retailers to remotely manage store operations.
Forkbeard develops Indoor Positioning Systems
Forkbeard is a Norweigan startup that advances in-store product search and way-finding through its patented technology, Fast Ultrasound Echo Location (FUEL). The startup’s platform, Phone-FUEL, integrates into the retailer’s app. Once customers walk into the store, the retailer’s app sends ultrasound signals from the customer’s smartphones. The startup’s store-based Bluetooth beacon, ultraBeacon, processes these signals and aids customers in finding product locations. Retail chains utilize this solution to provide a seamless shopping experience while increasing customer loyalty and sales revenue.
4. Smart Checkout
Advanced technologies such as contactless payments and cashier-less checkouts increase convenience and reduce customer wait time. Startups utilize sensors, blockchain, near-field communication (NFC), and biometrics-based technologies to automate and authenticate retail payments. Smartphones are usually the first digital touchpoint for a majority of customers and therefore mobile checkout is a necessity. While contactless point-of-sale (POS) solutions like scan-and-go leverage the user’s smartphone to authenticate payments, facial ID checkouts and wearables use biometrics. Self-service kiosks or automated checkouts and strategies such as Buy Now Pay Later (BNPL) reduce the queue and waiting times in stores. These technologies further provide the flexibility of converting customers beyond the physical limitations of the store.
Zeroqs builds a Smart Shopping Cart
Polish startup Zeroqs manufactures a patented smart shopping cart that functions as a self-service kiosk for faster checkout. The startup’s shopping trolley, SmartCart, combines a barcode scanner, touchscreen monitor, as well as weight and vision sensors to scan products added to the cart. Furthermore, shoppers use the monitor to navigate through the store, make shopping lists and automate payment using their preferred method. This allows physical store owners to eliminate shopping queues and inventory shrinkage as well as push personalized offers to shoppers.
Leav offers Contactless Mobile Checkouts
Canadian startup Leav develops a smartphone-based contactless self-checkout platform. It is integrable into new or existing stores with minimum infrastructural changes. Shoppers scan product QR codes using smartphones which redirects them to the retail store portal on Leav’s platform. It functions as a digital shopping cart and allows shoppers to pay for each item after scanning the product. This prevents theft, tracks inventory cycles, and provides real-time insights into store operations.
5. Immersive Customer Experience
Engaging customer experience translates into customer loyalty, ensures repeated sales, and reduces product returns. Immersive technologies such as AR and VR provide immersive shopping experiences such as virtual try-on, personalized recommendations, and 3D product visualizations. Additionally, they enable retailers to test new products before launch, train employees, and promote no inventory store format. Metaverse, non-fungible tokens (NFTs), and gamified brand experiences are the other upcoming trends in retail-marketing-as-entertainment or retailtainment. These trends and technologies are proven effective in boosting brand engagement and loyalty, especially among Gen Z shoppers. Other trends that improve customer journeys include interactive and holographic displays, and scent and sound-based experiences.
Dybo offers Virtual Product Try-ons
Dybo is an Indian startup that provides AR-based virtual product visualizations for furniture businesses. The startup’s WebAR solution allows users to scan a QR code and virtually try the furniture in their surroundings. Its product visualizations are true to real-world dimensions and feature dynamic lighting that adapts to the room’s ambiance. This enables virtual product trials in the buyer’s own environment, thereby reducing the rate of product returns as well as increasing virtual sales and customer engagement.
So Real develops Immersive 3D Catalogs
Swiss startup So Real offers 3D product catalogs for eCommerce brands. The startup uses its patented scanning and conversion technology to develop digital twins of products. These plug-and-play models are ready to use with XR and other immersive technologies. So Real’s virtual asset viewer allows retailers to leverage these digital twins and virtually showcase their products in simulated physical environments. This allows online retailers to promote their products and make engaging marketing materials.
Sustainability emerges as a key trend as more customers are conscious of how their lifestyles and shopping habits impact climate change. Startups and legacy retailers are thus integrating sustainability as a metric in their product assortments and operations while other startups incentivize climate-positive behavior. Organically grown food, locally sourced products, digital receipts, biodegradable packaging, and emission-free shipping are the trends advancing retail sustainability. Retailers are also measuring the carbon footprint and energy efficiency of their operations to achieve net-zero goals. Further, on-demand manufacturing tackles overproduction, rental or subscription business model reduces wastage, and reverse commerce or reCommerce promotes a circular economy. Retail startups also leverage blockchain, NFTs, IoT, and 5G to improve supply chain transparency, enable product authenticity, and facilitate distributed order management.
Textile Genesis aids Supply Chain Traceability
Hong Kong-based startup Textile Genesis provides TextileGenesis, a fiber-to-retail supply chain traceability platform for the textile and fashion industry. It uses blockchain, AI, and digital twin to trace and authenticate textiles to their source of origin across supply tiers. The platform digitizes any textile assets such as fiber, yarns, or garments into its blockchain tokens, Fibercoins, that trace the flow of goods in real-time. Sustainable textile and apparel manufacturers use this platform to certify the provenance information of their products and ensure ESG compliance.
reverse. supply enables ReCommerce
German startup reverse.supply develops a circular retail platform to advance retail reCommerce. The startup’s reCommerce-as-a-service platform sources information on the second-hand market of a brand’s products. It then optimizes the second sale operations using an AI-driven grading system, enabling brands to resale products through their own channels, extending product lifecycles. This enables brands and retailers to increase brand value and sustainability efforts while improving customer loyalty.
7. Artificial Intelligence
AI and subset technologies like natural language processing (NLP), machine learning (ML), and deep learning (DL) in retail improve in-store operations and enhance customer experiences. AI optimizes algorithmic merchandising for predictive inventory planning and stock allocation as well as increases supply chain efficiency. Cost and pricing optimization in the storefront and while sourcing goods from suppliers is another important area of application for AI. This allows retailers to improve margins and optimize marketing strategies. Further, AI-based consumer behavior and sentiment analysis aid in the hyper-personalization of product offerings and promotions. Other customer-centric solutions leverage AI for product design customization and personalized recommendations to enable hassle-free customer journeys.
Puzl facilitates Advertisement Cost Optimization
US-based startup Puzl is an AI-based advertisement planning platform for supermarkets. It is a cloud-based platform that combines data from POS and enterprise retail planning (ERP) systems. The platform then automates weekly ad planning and gross margin management. This allows supermarket brands and grocery stores to drive more traffic into the stores and, in turn, improve profitability.
Horavision provides Automated Customer Behavior Analysis
Italian startup Horavision builds an AI-powered image and facial recognition platform that provides customer behavior analysis. It uses IoT sensors to scrutinize visitor sentiments towards every product in stock and marketing campaigns across the store. The platform uses this data to provide insights such as customer demographics, reaction assessment, and footfall analysis. It also improves planogramming, marketing campaign efficacy, and conversion rates while maintaining consumer privacy.
8. Big Data & Analytics
Big data and analytics provide insights into previously unmeasured metrics of retail that reveal unexpected areas for process improvements. Startups also utilize collaborative analytics to personalize the customer experience across channels. Further, data from first and third-party business sources when clustered into targeted segments provides valuable insights across key performance indicators (KPIs). For example, retail analytics leads to a better understanding of store and workforce performance as well as customer traffic data. Big data also empowers retail planning based on demand forecasting and inventory management. Numerous opportunities to innovate and streamline retail businesses makes big data one of the top retail industry trends.
Neural Trend advances Retail Demand Forecasting
US-based startup Neural Trend develops a data analytics platform for retail demand forecasting and inventory management. It reviews trending products in the apparel market by analyzing thousands of high-demand products already in the market. The platform uses this data to predict apparel demands and provide smart merchandising suggestions. This enables inventory reallocation to high-demand geography. The platform thus enables fashion and textile retailers to increase conversion, lower returns costs, and reduce time to market for new products.
Palexy provides Retail Store Analytics
Singaporean startup Palexy builds Store Optimizer, a business intelligence platform for store health analytics. It combines big data and AI to collect data from POS systems, surveillance camera feeds, weather information, and promotion calendars. Based on this data, the platform generates tailored reports on store performance and customer traffic. This offers insights into store layout, product assortment, and workforce performance, enabling small stores and retail chains to improve promotion planning, staff allocation, and customer experience.
Discover all Retail Industry Trends, Innovations, & Startups
The retail industry is accelerating toward digital transformation, mainly due to the COVID-19 pandemic. The retail industry is also embracing distributed order management and multi-hyphenate business models. Edge computing is an exciting solution to data collection and processing in a cookieless world. However, digitization comes with its own risks, and startups address growing cyber security, customer data protection, and privacy challenges. Finally, sustainability remains at the core of these advances with AI, blockchain, IoT, and data analytics aiming for net-zero retail in the near future.
The Retail Industry Trends & Startups outlined in this report only scratch the surface of innovation that we identified during our data-driven startup scouting process. Among others, customer analytics, climate-positive retail operations, immersive shopping experiences, and retail supply chain transparency will transform the sector as we know it today. Identifying new opportunities and emerging technologies to implement into your business goes a long way in gaining a competitive advantage. Get in touch to easily and exhaustively scout startups, technologies & trends that matter to you!