As consumer preferences and behavior have changed with the introduction of eCommerce businesses and on-demand delivery, retailers turn to emerging technologies to find alternative ways to keep their customers happy and serve them from all angles.
Our innovation & startup scouting analysts researched 8.000+ startups to identify the key technologies driving the digital transformation in the retail industry. This research is backed by our proprietary AI- and data-driven innovation scouting approach, allowing us to provide you with actionable intelligence on startup-driven innovation. Let’s take a look at what’s next for the retail industry:
Augmented Reality (AR)
Augmented reality is one of the more common technologies already used by retailers globally. As brick-and-mortar stores increasingly face challenges due to the rise of eCommerce, traditional stores are on a journey to transform into showrooms. In these, AR supports vendors to increase the interaction with customers through smart dressing rooms, beacons, or AR catalog apps – resulting in increased customer satisfaction and higher sales.
Virtual Reality (VR)
Utilizing VR in physical stores massively increases opportunities for retailers. Specifically, retailers can draw from two core application cases. Firstly, the virtual redesign of a physical store allows for the optimization and even creation of a new experience for customers – every single time they enter that store. Secondly, the virtual demonstration of products holds great potential as shown by the clothing and cosmetics industry. Moreover, virtual reality offers to create a very personalized shopping experience thus overall improving it.
Artificial Intelligence (AI)
Through understanding customer behavior (including individual preferences) and anticipating what customers will purchase next, forward-looking retailers make use of artificial intelligence to drive sales. AI has a history of high accuracy as famously demonstrated by Target which predicted the pregnancy and due date of a 23-year old back in 2012. Said to eventually replace shopping assistants, AI also powers chatbots and voice-assisted shopping devices.
With 82% of customers already consulting their smartphones before finalizing their purchase decision, the trend toward mobile will continue its significant influence on the retail sector. Vendors not only optimize their websites accordingly but also start to add emerging technologies such as AR- and VR-enhanced apps, smart packaging or upgraded mobile payment models to their business models to increase convenience for customers.
Internet of Things (IoT)
In the retail industry, the Internet of Things allows for the gathering of data which is further analyzed to enable more informed decision-making in regards to stock control, product placement, and increasing efficiency. RFID, NFC tags as well as different sensors are used for tracking items through the supply chain and keeping an eye on in-store inventory in real-time. Another application for the IoT in the retail industry is the utilization of iBeacons to send consumers notifications on their smartphones when passing by a store in a pursuit to increase sales.
We have already established that consumers provide retailers with various data sources. However, this data is only valuable once vendors can make sense of it. When done right, the possibilities of big data range from forecasting product demand, optimizing the price range (markup and markdown optimization) to identifying target audiences.
Disruptive Startups In The Retail Industry Include:
- Paris-based Augment connects on- and offline channels through an augmented reality platform, therefore creating a seamless omnichannel retail experience.
- Virt brings “reality into virtual reality”. The startup’s technology allows retailers to upgrade from simple product or store photos to a virtual walk-through tour by using a 360-degree video rover which maps a location before deploying it cross-platform.
- French startup Planorama makes use of deep learning algorithms and neural networks to equip vendors with actionable insights based on shelf pictures. Through leveraging AI, their solution analyzed and recognizes millions of product items.
- SplitIt provides a unique way to make retail purchases by removing a barrier that often stops consumers to finalize a purchase. SplitIt 360° offers consumers to pay by using their existing credit cards and divide the total cost across as many interest-free payments as they choose.
- Israeli WiseShelf develops a solution that is designed to improve stock status visibility via an appliance that is mounted on top of any standard retail shelf. Dozens of light sensors detecting the light level above them allow for a visual presentation of shelf planogram and can highlight products that need attention or special promotions.
- Berlin-based MiNODES’ solution understands and retains customers. The startup provides consumer insights through a big data SaaS solution by integrating a comprehensive set of technologies and tools, including state-of-the-art WiFi, beacon, and camera technology.
To conclude, the retail industry is in the middle of an evolution that challenges traditional brick-and-mortar stores as well as online sellers. Ultimately, developing technologies along with new customer expectations will deeply impact the retail industry, making tomorrow’s shopping a personalized, faster, and more convenient experience.
Technologies such as 3D Printing & Imaging, in-store customization, biometrics, gamification, and face recognition shape the way consumers shop, calling for vendors to deploy these technologies in order to profit from this transition.