Retail Technology: Upgrade Your Toolstack With These 6 Trends

Despite the “retail apocalypse” we’ve been hearing about for the last couple of years, the truth is that retail isn’t going anywhere. By 2024, experts predict that 72% of U.S. retail sales will still occur in brick-and-mortar stores. 

But that’s not to say the retail industry will look the same. COVID-19’s impact on in-store commerce, along with other trends, means malls are reinventing themselves to stay relevant. 

Meanwhile, we’re in a world of constant digital transformation. Shoppers are becoming less hands-on and more tech-enabled. While you don’t have to go as far as JD.com’s robotic stores, investing in retail technology can pay dividends. Customer satisfaction increases—as does the time your retail team spends on higher-impact tasks. 

There’s no better time to start investing in retail technology than now. If you’re not sure where to begin, see below for a guide to auditing your current tech stack, plus six retail tech trends you need to be aware of. 

The importance of technology in retail

Making technology a bigger part of your brick-and-mortar store is an intimidating idea for many store managers. Let’s look at why it’s worth the investment.

Streamline store operations

The quicker you can complete mundane tasks, the more time you have to spend on higher-impact activities. For example, a self-checkout process leaves retail store associates more time to engage with shoppers who have pre-purchase questions. 

In addition to freeing up time, cost savings are a natural byproduct of these efficiencies. Surveys show that 10% of retailers using automation throughout the buy online, pick up in-store (BOPIS) process cut costs due to faster delivery of orders. Another 8% saw cost savings from implementing technology that avoided stockouts.

Pre-pandemic, technology certainly played a big role in retail; but now it’s clear that technology is the heart of the future of the entire industry.

Gather valuable data

Technology is powered by data. It creates opportunities to collect information about your customer base—something retailers struggle to do when three-quarters of consumers are becoming increasingly concerned about their privacy.

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QR codes, for example, are a relatively simple way to collect information about shoppers. When customers scan a coupon QR code on their smartphone, they’re taken directly to your newsletter subscription page. You get their email address, and the customer gets a coupon to redeem in-store. It’s a win-win for everyone involved.

Connect with customers 

Whether because of privacy concerns or the lingering effect of the pandemic, consumers are becoming increasingly standoffish. Technology that doesn’t require close contact (or any interaction with human store assistants) is preferred by some.

In addition, the majority of consumers (66%) believe that automation can improve their shopping experience. It’s seen as a solution to common challenges—particularly long queues at the payment desk.

But it’s not just in-store customer experiences that are affected by retail technology. Successful brands meet customers where they are—be that in-store, online, or via their mobile devices. Omnichannel technology like advanced point of sale (POS) systems send email shopping carts for unsure shoppers to complete their purchase at home.

Overall, almost six in 10 consumers would prefer to shop in-store with a retailer that uses technology to make the experience more fun and engaging.

The best thing about technology is that it allows you to connect your offline and online worlds. Customers expect a complete shopping experience, which you can give with the help of technology.

Retail technology trends

As we said, a big difficulty with implementing new tech is knowing where to start. After studying the available research, talking to experts, and keeping a close eye on what retailers are doing to improve in-store experiences, we’ve identified six retail tech trends we’re expecting to hear a lot more about this year:

1. QR codes
2. RFID technology
3. Augmented reality
4. NFTs
5. Smart checkout
6. Store management

QR codes

Quick response (QR) codes are small, barcode-like combinations of black squares that retrieve information when scanned using a smartphone camera. 

While they might seem outdated, social distancing rules means QR codes are coming back into fashion: 59% of US shoppers expect them to be a regular part of their retail experience in the near future.

We mentioned these earlier in regard to coupon redemption and data gathering. Here are some other retail use cases for QR codes:

• Place Shopcodes next to product shelving so in-store shoppers can complete their purchase via your website or social media storefront. (This endless aisle approach appeals to the 74% of shoppers who consult their smartphone while shopping in-store.)
• Add QR codes to paper receipts, and direct shoppers towards completing a survey or leaving a review.
• When your store hits capacity, encourage shoppers to scan a QR code and join the virtual queue. They’ll get a text when it’s their turn to enter.
• Create interactive window displays by placing Shopcodes in your storefront window.

Alexa Allamano, owner of Foamy Wader, is one retailer using QR codes to build smart window displays. She says, “Using a system of scannable QR codes merchandised in my store windows allows me to drive traffic to my Shopify and capture sales and leads outside normal open hours.

Shoppers use their smartphone camera to scan the QR code next to an item in the window and be led to order that exact item on my website. One customer recently said it was like shopping online in real life.

The result? Alexa says, “Business has returned to pre-pandemic levels despite having relocated and being available in-store by appointment only.”

Scan-to-shop window shopping now available 24/7!✨

Please enjoy a little tour of our newest shopping experience at our Whidbey Island jewel box (and it’s my first @tiktok, so I promise I’ll get better ?)#windowshopping #whidbey #scantoshop #innovation #retailtherapy pic.twitter.com/juY17Wqqu2

— Alexa Allamano (@FoamyWader) November 23, 2020

RFID technology

Ask any retailer what tasks they hate most, and “managing inventory” is bound to make the list. Retailers spend hours stock-taking, and 62% blame human error when things don’t line up.

RFID technology exists to solve that problem—or at least the amount of time you spend counting store inventory. Scan RFID tags, small chips that transmit product data to a portable reader, and update stock levels in your inventory management system within just a few seconds.

RFID technology not only streamlines inventory processes, but also provides 100% accuracy when it comes to restocking.

Beyond inventory management, advanced use cases of RFID technology include unmanned stores like Amazon Go. Scanners inside product shelving detect which items a customer has picked up. Data from the RFID scanner feeds back through to a payment system for a shopper to pay upon exit. 

Augmented reality

Augmented reality (AR) is a relatively new technology that places graphics over real-world settings. Think Snapchat filters—cartoon ears, glasses, or features that appear over your face and move when you do.

Retailers will want to identify the new and best customers now shopping across channels. They must use this insight to drive more effective digital engagement and commerce through owned and paid channels, including social, DTC and marketplaces. Expect mobile apps, live-streaming, video chat and augmented reality (AR) developments here.

AR is increasing in popularity. Data suggests that 48.3 million people will be engaging with AR on social media in 2022. 

That usage is overflowing into retail stores, bridging the gap between germ-conscious shoppers and the outside world. People get as close as they can to a product (sometimes trying it on) without actually touching it. An estimated one-third of brands plan to invest in AR to help shoppers visualize how the products they sell fit into customers’ lives. 

Examples of AR in a retail setting include:

• Virtual fitting rooms. Make it easy for customers to try on products with virtual fitting rooms. RFID technology scans the products in their hand, while the livestream camera overlays it onto a shopper’s body. No changing clothes necessary. These AR interactions have a 94% higher conversion rate than standard.
• Extend the in-store experience at home. If an ecommerce website provides images of your brick-and-mortar store, give online shoppers the chance to experience your retail store with AR. Show them life-size versions of products without having to leave their home.
• Virtual product tours. Go big on experiential retail with virtual reality experiences in-store. Furniture brands with low-inventory stores, for example, could take shoppers on a “guided tour” through the unit, with AR technology placing life size inventory in a livestream through the customer’s smartphone.

When the shopper realizes the mirror they’re using in a store is also a touchscreen to find products, get outfit recommendations, and even check out, it’s an unexpected and delightful experience with a mundane object in an everyday context.

NFTs

Non-fungible tokens (NFTs) are unique, digital pieces of content—such as images, video, tweets, and audio—owned by one person. Information about the token is stored on a secure and decentralized data record known as a blockchain. Sales involving NFTs hit $13.9 billion in 2021. Retailers are getting in on the action.

In October of 2021, luxury fashion brand Dolce & Gabbana launched the Genesis Collection—an NFT drop that generated $5.65 million at auction. Its Glass Suit offering, one physical suit bundled with a NFT image of it, sold for more than $1 million.

“Brands who see NFTs as visual storytelling opportunities and not just transactional relationships will see how they can pay dividends long-term,” says B. Earl, Partner at Skyview Way Studios.

As brands race to the NFT gold rush, they should understand NFTs create more than digital scarcity—they offer ways to connect to their greater brand story. When NFTs are tied to physical products, and they will be soon, the value prop will click with more merchants.

A loyalty concept:

Jewelry company creates NFT meant to be gifted to a newborn. NFT is a lifetime object that airdrops products at milestones – bdays, sweet sixteen, graduation, wedding, etc.

Heirloom object that can be passed to next generation.

— michaelmiraflor.eth (@michaelmiraflor) November 12, 2021

Smart checkout

The traditional checkout experience is fast becoming out of date. Retailers who fail to implement mobile point-of-sale technology at their stores face long queues. Some 60% of customers say long checkout queues are a major pain point while shopping, though two-thirds think automation could ease it.

Let’s take a look at smart checkout features contributing to the death of the checkout queue:

• Contactless payment. Contactless technology is speeding up the payment process. Shoppers can tap their credit card or mobile device onto a payment terminal, pay for their products, and leave the store within just a few seconds.
• Payment installations. Almost one-third of shoppers admit to abandoning a purchase because they couldn’t use their preferred payment method. Buy now, pay later (BNPL) is increasing in popularity. Help customers finance expensive purchases by allowing them to pay in installments.
• Ship to home. Not all customers can take in-store purchases home with them. Whether the item’s out of stock or simply too heavy to carry home, take payment in-store and ship the item directly to the customer’s shipping address. 
• Digital receipts. Research shows 63% of consumers would rather shop with retailers who reduce the need for consumables. Another 58% would shop with merchants who take steps to lower their carbon footprint. Reduce paper waste and collect customer data by emailing a copy of their receipt.
• Self-checkout. Customers prefer unattended retail because they can shop at their own pace. Continue that experience through to self-checkout with technology like Mashgin.

Mashgin uses cameras and artificial intelligence to identify items instead of barcodes. This lets us ring up multiple items at once, so customers simply place their items down on the tray of our touchless checkout system and everything will ring up instantly. As a result, we see transaction times as much as 400% faster than traditional checkout and self-checkout methods.

The secret to smart checkout is a POS system that offers the smart features your customers want.

With Shopify POS, for instance, you can customize your checkout to make it faster, accept contactless payments, email digital receipts, ship items purchased in store to your customer’s home, and more. 

Store management

No matter how much technology impacts the experience of visiting your store, you can’t run a successful physical location without a human team. You need people on hand to open the store, display inventory, and assist shoppers who still prefer a human touch.

Look at your employees in a different way, not just as store staff, because that mundanity gets to everyone. Use technology to empower your store employees, as opposed to replacing them. In independent retail, you still need that touchpoint to add a human element even during virtual interactions.

Blend technology and people with team management tools. Some 39% of retailers are investing in improving the tools and technologies employees use to do their day-to-day work, such as:

• Payroll. Pay your employees on time by automating payroll. Add their salary, plus tips and commissions, with Shopify apps like Gusto.
• Staff scheduling. “The pandemic has helped increase business usage of technology that helps them manage their workforce remotely, through things like time attendance, scheduling and communications,” says Damien Tampling, Global Chief Strategy Officer at Xero. “Planday is a good example of this, which is helping businesses manage their day from a single platform.” 
• Retail analytics. Understand store performance better with apps like Dor. Its thermal-sensing camera tracks how many people enter your store, and connects the traffic data with revenue from your POS system. Find peak times, optimal team rotations, and local marketing campaign impact.

Auditing your retail technology stack

Already using technology in your brick-and-mortar store? Here’s how to audit your current tech stack and decide on new additions.

Review performance

With so many new retail technology trends coming to light this year, you might feel an urge to implement as many as you can in your store. That’s not always the best approach to take. 

Take stock of the technologies you’re currently using to run your store, and list them in order of necessity. Tools like POS platforms, security systems, and team management naturally fall higher on the list, since your store can’t run without them.

Once you’ve got your list, ask yourself how satisfied you are with the tech you’re currently using. Get your retail staff involved, too. Ask them to share any struggles they have with the technology, or features they would like to see that aren’t available within your current toolstack. 

See what else is available

By this point, you’ll have your priority-organized list of retail tools you need to change. Keep costs down by contacting your current tool provider and asking for an upgrade. If upgrading isn’t an option, look for tools to replace your existing technology.

Accessible, affordable tech is opening up new opportunities for independent retailers because they can now do things themselves that previously were prohibitively expensive, or something only big box stores had the resources to offer.

Make a change

Once you’ve found your replacement, it’s time to make the change. Take advantage of any provider’s onboarding program, and deliver training to bring employees up to speed with your new retail technology.

The first few weeks might be tough as you transition tools, but remember the long-term impact of making a better use of technology in your store. Staff will be more organized, you’ll have greater insight into how your store is performing, and most importantly, customers will have a more enjoyable experience when they visit.

Get the right retail tools in your store

The bottom line: technology is changing the way people shop in-store. Your store needs to meet customers’ needs if you’re to stay competitive. 

So audit your current toolstack and find areas for improvement. Once you nail the basics, experiment with new retail tech trends—from smart checkout features to incorporating NFTs into the store experience. 

But remember, it’s always better to build from the ground up than to overload shoppers with unfamiliar tech.

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