The retail industry has been evolving at a rapid pace in recent years thanks to the exponential growth of technological advancements designed to aid retail businesses. There are plenty of exciting new developments in the retail sphere that became more prominent in 2018 and are expected to reach even more companies in 2019.
Worldwide retail tech spending is slated to grow by 3.6% from 2018 to 2019, reaching $203.6 billion in 2019, according to Gartner. So, where is that money going? Well, our 2019 retail forecast shows that retailers are investing more money in technological operations designed to make the shopping experience more convenient and personalized for customers.
Predictive Analytics Will Transform Retail in 2019
Machine learning (ML), consisting of technology that gathers large amounts of data and identifies patterns within them, will continue to gain prominence. Predictive analytics (PA) takes this concept a step further by predicting future behavior and trends using data—an ability that is particularly useful in the retail sphere.
Retailers are focusing on ways to optimize the inventory management and stocking process, as having too much or too little of a product can hurt your bottom line. Fortunately, PA makes it easy for businesses to lower the amount they spend on inventory while also ensuring that the stock they’re buying leads to sales. Advanced analytical algorithms can determine high-demand areas and growing sales trends with the goal of optimizing delivery to ensure that the right items go to the right stores.
The technology also helps retailers set optimal prices—a process that has traditionally relied on historical data and seasonal trends. However, the growth of e-commerce has pushed many businesses to find new ways to set prices, as seasonal sales are not as significant when buying items online.
With PA, retailers can determine the best times to increase or lower prices gradually, which is more effective than drastically changing a price. ML and PA can consider inventory levels, prices from competition, and current demand. Based on this data, businesses can learn how they should adjust their prices. As a result, sales will increase and you will lose fewer customers to artificially inflated prices.
Improve the Return and Exchange Process for Everyone
Naturally, a high rate of returns and exchanges can be harmful to a retail business, and this is especially true now that worldwide online sales are increasing. To address this issue, startup ZigZag has been working alongside the likes of Gap to monitor the quality of returned products, retag them and send them back to the parent company for re-processing. This strategy provides clearer communication channels and more specific instructions for customers to help them with returns and exchanges.
Working with a business such as ZigZag eases the financial burden on retailers when it comes to returns and exchanges, but companies will also likely develop their own solutions. For instance, an e-commerce site could create a mobile app that includes a returns and exchanges feature that guides customers through the process of returning or trading an item. An internal app could also be developed to streamline the sorting and quality control process.
In addition to managing returns and exchanges, retailers need to find ways to reduce the number that occur in the first place. For instance, retailers can add videos alongside product descriptions online, giving consumers a clear idea of what the product is and how to use it.
Improving Mobile App Security
Retailers, especially e-commerce sites, fear the possibility of a data breach exposing the personal information of its customers. In order to combat this concern, more retailers will migrate their data and applications to the cloud to protect their servers and databases. Cloud storage is more secure because it is typically easier for cybercriminals to tap into a centralized storage location such as a computer or mobile device. The cloud also offers more advanced encryption features.
In addition to traditional cybersecurity practices such as firewalls and having the https:// security protocol, more online retailers will add multi-factor authentication. Retailers may also require employees to use two-step logins that only allow workers who have both their computer and their mobile devices to log into the company’s servers.
Implementing such security features will go a long way towards keeping cybercriminals at bay. And as hackers become more sophisticated with their attacks, retailers will spend more to protect their data.
Real-Time Inventory Management and an Omnichannel Approach
Online retailers have been steadily shifting towards an omnichannel approach, meaning that they market to consumers through multiple channels such as mobile applications, email ads and desktop sites. The idea is that knowing how to reach consumers through the right platform will help increase sales and customer brand loyalty.
More businesses are investing in omnichannel marketing as purchasing behaviors continue to change. Real-time inventory management is a key element of this movement. After all, an omnichannel strategy can only succeed if a retailer’s supply chain, orders, and inventories are all in sync across every channel.
Such synchronization paves the way for offering multiple delivery options, which shows customers that your business is flexible enough to accommodate different shopping preferences. For instance, a retailer could deliver straight to customers’ doorsteps, let them pick up the item at a store, or let them return items in-store that they bought online.
In order to successfully run an omnichannel approach, there needs to be a single-echelon inventory control that updates your inventory. Single-echelon inventory control monitors and shares the location of items with all stores in real-time. This route also ensures that every store has the same information regarding item pricing, as lags in price updates can lower a retailer’s profit margin.
Tapping Into the Potential of Blockchain
Everyone’s heard of blockchain at this point and for good reason; the technology that serves as the backbone of cryptocurrencies has plenty of potential moving forward. Blockchain consists of decentralized digital ledgers designed to transmit financial information or other data.
When it comes to Bitcoin and other cryptocurrencies, blockchain offers retailers a more affordable way of accepting payments, helping to reduce transaction fees. Customer payments become more secure and customers can enjoy greater flexibility in terms of how they pay for items.
Additionally, blockchain can be used to track and trace an item from production to store to consumer. Such visibility helps ensure that retail businesses are meeting the necessary regulations and requirements in their industry.
Blockchain is also making it possible to share product warranty information from a retailer’s servers via the cloud, making it easy to update or transfer a warranty at a moment’s notice. This reduces some of the administrative roadblocks associated with managing product warranties.
2019-2020 Retail Forecast
In the upcoming year, we will see budding technologies expand in some very exciting ways. Thanks to these advancements, retail operations will become faster and more secure, with customers enjoying a more flexible and convenient shopping experience. It’s all about leveraging cutting-edge technology to help retail businesses reach their full potential.
Hoping to develop an app for your retail business? If so, you will need an experienced, talented group of developers by your side. The team at 7T specializes in custom mobile app development with experience in the retail world specifically. We also offer services related to a host of emerging technologies, including augmented reality, blockchain, Internet of Things, artificial intelligence, machine learning, cloud hosting and predictive analytics.