IT Services, Thought Leaders

Top Retail Technology Trends That Will Drive Business Results in 2020

September 26, 2019

by Solomiia Ryfiak

Retail Industry Lead, Intellias

How do you connect with consumers to drive your retail business? Is it different from the way you did it in 2018, for example? Will it differ in 2020? If your answer is “no” to the second and the third questions, I have bad news for you: Digital transformation in retail is on the rise. 

Consumer behavior is changing. People continue buying at brick-and-mortar stores but do most of their product research online. They are willing to try new aspects of online shopping but are still afraid to share personal data on the web. 

E-commerce share reached 15% of total retail sales, according to BOND Internet Trends 2019.  

E-commerce share reached 15% of total retail sales and has been steadily increasing since 2000.

This trend is predicted to continue to grow in 2020 and beyond. 

Since new retail technologies are changing the industry landscape, companies should be aware of advancements in technology and prepare for market challenges.
If you aim to stay at the forefront of retail technology trends in 2020 (which you should be), here’s the industry vision on what to expect from technology in the upcoming year. 

Trend 1: Augmented Reality (AR) and Virtual Reality (VR) Keep Pushing the Limits

Augmented reality is expected to lead to more augmented shopping experiences. 

Success in tomorrow’s business depends on how well you can adapt and take advantage of tech changes. Consumer needs are what’s the most important, and they demand a smooth, immersive shopping experience. 

According to BRP, nearly 50% of shoppers would buy from a retailer that provides AR/VR experiences. The future of shopping is virtual and augmented. 

Use cases are the following: 

Trying, Modeling, and Testing Products From Their Mobile Devices

AR and VR tech can help your customers visualize the merch they want to buy — be it online or in-store. Offer consumers model living spaces, try on makeup or clothes, or run through a store as if it’s a game, all virtually. 

Let’s consider Walmart. You may think the retailer of such a great name doesn’t need to stay tuned to modern trends, but this assumption is false. 

The ability to keep up with the times is what helps Walmart succeed. This year, Walmart is sponsoring Jurassic World’s AR game, offering to hunt and capture dinosaurs in their stores. With the help of an AR game, the retailer encourages foot traffic to the store. 

Sephora, for example, offers magic mirrors in-store and mobile apps that allow testing makeup tools. IKEA lets consumers design spaces with their try-before-you-buy app. 

Consumers want to know what the experience of a product is before they buy it and AR-enabled experiences can help businesses meet these expectations. 

Browse Facilities and Catalogs 

Transform your brick-and-mortar shop into an online one. Let consumers roam through your VR-based stores no matter their location and buy items they find on virtual shelves. 

Lots of brands already offer virtual showrooms to their customers as well as virtual catalogs of goods on sale. 

In 2020, this trend will expand. Retailers will be able to offer consumers AR navigation assistance and build routes around shops/shelves to make shopping effective. 

Design Custom Merchandise

AR and VR in retail help to produce custom goods times quicker. 

Nike, for example, enabled a customized design to appear on sneakers an hour after a customer made it. 

For now, that was a single event on a single location, but 2020 may grant retailers more means to implement such an idea. 

Trend 2: Cybersecurity as a Top Priority

No customer should ever be deceived: That's the rule no brand should ever compromise.

 The comfort and security of buyers should be the first thing retailers mind when switching to new technology. Retailers have always been prime targets for hackers.

Understanding risks, along with the preventive measures, will help retailers keep their customers' data secure. 

One of the latest and most massive data breaches in the retail world happened last spring. Under Armour, activewear company announced that they experienced the data breach that affected 150 million users of their food and nutrition application. 

Company shares dropped 3.8% that day. 

Despite their quick incident announcement and transparent communications, Under Armour received criticism for their approach to user's data security. 

The statistics from more than 50+ projects over the last two years from the security team in my company tells us companies can eliminate risk by using available practices.

Main culprits for cybersecurity issues include: 

Culprit 1: Input Validation

SQL and code injections issues can result in system vulnerabilities. Companies should validate parameters on both the front and backend, validate content, and set in place a content security policy. 

Culprit 2: Insecure Data Storage

Even if a company stores customers’ passwords in a relatively secure manner, these systems can still be breached. 
To enforce cybersecurity, I suggest applying these simple steps:

Provide awareness and training in the information security field. Provide real-life examples, both non-technical and technical so that experts could avoid similar behavior. 

  • Include consultancy on the early stage of system development helps developers and architects to identify security flows and save up to 70% of the budget on fixing issues after the release. 
  • Hold a post-production security assessment. Find the most critical issues which are available to entire internet users. 
  • Embed secure software development and SecDevOps practices into your software development pipeline. 
  • Consider adding automated vulnerabilities testing block to CI/CD processes. 
  • Always use latest third-party libraries and don't neglect security patches installation within your network

Additionally, regularly organize external penetration testing exercises, that could be provided by ethical hackers. 

External penetration testing involves inputting the minimum amount of information about the target to see where vulnerabilities lie.

External penetration testing involves inputting the minimum amount of information about the target and seeing what aspects of the system are vulnerable. 

Retailers must take a 360-degree 24/7 approach that should address a variety of security risks involving people, processes, environment, and technology. 

Perimeter firewalls are not enough in 2020 to ensure your data and your customers' data to be safe. 

Trend 3: Indoor Location-Based Services (LBS) Can Help Identify Patterns

Another trend is rising to support stores' effort to recognize customer buying patterns within brick and mortar stores is indoor location-based services. 

These solutions include such components such as compact 3D laser scanning carts and web/mobile solutions for viewing and analyzing digitized building panoramas. 
And, of course, an advanced indoor navigation toolkit that supports indoor 3D mapping and navigation applications.

LBS are aimed to improve customer experiences in physical retail stores by proposing them relevant information and provide directions in-store. 

The most prominent technologies in this area include:

  • Bluetooth beacons — small devices that continuously broadcast signal to Bluetooth and WiFi and are focused on locating customers nearby

These devices allow identifying customer's phones that in turn, help to identify customers with their purchase history and buying patterns. This data processed real-time help to build personalized discounts and special offers via push notifications as they walk past.

  • Digital representation of the indoor space and its integration into internal applications

This space-mapping technology combined with facial recognition, beacons, and loyalty programs allow drawing and managing customer journeys within physical stores.

Trend 4: Know Your Customer's Face

Facial recognition applications were initiated in the mid-'60s. 

At that time, companies lack both computation power and data storages to enable this approach. But within the next few years, I expect that thousands of stores will use facial recognition as part of their security circuits and marketing. 

Retailers are very secretive in regards to their experiments with facial recognition. Only a few companies such as Walmart and Saks guardedly share their experiences.

In the retail world, people's faces caught on camera are converted into biometric templates and checked with a database for a possible match of known criminals or shoplifters. There is even a trend that some shops in the U.S. give shoplifters a choice to be photographed or to be arrested. 

The second option offers supermarkets high chances to decrease potential losses. This technology was enabled by advanced image analytics software and high-fidelity networked cameras.

These data and approaches also enable new opportunities for merchandising. Several companies, such as NEC, Axis Communications, offer their complex applications to allow shops to gather real-time data on traffic flow and product displays.

Merchants also use face recognition to verify payments and decrease financial fraud rates.

Trend 5: Staff-Free Shops

The first Amazon Go opened to the broad audience in early 2018, and its first real competitor, Zippin, entered the market. 

A few prominent tech companies such as Microsoft, Toshiba, and Walmart have announced opening staff-free shops. 

Cashier-free self-checkout stores are possible thanks to AI advancements within the last few years. 

Staff-free stores rely on technologies such as: 

  • Machine Vision, which is an AI subset that focuses on image recognition. Cashier-free store uses machine vision to track.
  • Facial Recognition, which can be used not only for shoplifters tracking but for linking shoppers and their virtual identities. If new customer image was added to a store database and facial recognition technology is in place.
  • Big Data, which makes it possible to stream pictures and video that are parsed in real-time and require specific approaches to data storage and data processing. That requires specific software, advanced data processing techniques, data enrichment, and quality check techniques in place.  
  • Barcodes: The quick classic tech that helps shoppers scan their purchases with mobile app.
  • Shelf Sensors: This set of IoT sensors can be used to control inventory and manage products on shelves. 
  • Quick Response (QR) Codes: This tool is quite a traditional one that allows to identify the customer quickly, help them download the app or get more information about the product.
  • Augmented Reality: AR apps allow shoppers to learn more about products, check how specific product look inside the box or how will it suit them.
  • RFID Tags: Due to the additional cost, this approach is used to track some more expensive products. The RFID tag could be attached to products and sensors can read information to confirm products a shopper is carrying out.

The key focus in all these tech approaches is how to be able to keep track of customer preferences without asking them to do anything in return.

Trend 6: Uniting Customer Touchpoints into a Unified Commerce

Unified commerce is a centralized platform. 

It connects all aspects of retail business into one unit: websites, mobile applications, brick and mortar stores systems, marketplaces, and internal fulfillment systems.

All aspects of retail business are in once place in unified commerce.

Every time customers contact your business using any touchpoint, they can be sure to receive the most relevant information about goods and services, their availability, personal offerings, and discounts. 

A centralized data storage and fast messaging information channels ensure it's possible. 

Retail Will Evolve as Technology Advances

2020 will be here soon, and in a fast-moving world with fierce competition, it is essential to know what will be driving the year. 

AR, VR, increased attention to cybersecurity, use of facial recognition, and staff-free stores are all trends that will shape the retail industry in 2020. Keep your businesses up to date on the latest trends so you don’t get left behind.  

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