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Upgrades In Tech: Why 2021 Is A Pivotal Year For Retail

By News Creatives Authors , in Small Business , at September 8, 2021

As VP of Operations at BairesDev, Damian oversees the entire customer relations life-cycle, safeguarding the company’s operations.  

Saying that the retail industry is in a transitional stage isn’t precisely new. In fact, the sector has been suffering structural modifications for the last decade or so (with the infamous Great Retail Apocalypse of 2017 as its most dramatic peak). The reasons aren’t hard to imagine: the irruption of e-commerce and changes in consumer habits.

As if things weren’t already turbulent in the industry, the Covid-19 pandemic accelerated those phenomena and shattered the already-shaky foundations of companies across the board. All of those factors converged into a new landscape that is establishing itself throughout 2021. As we move forward, retailers everywhere will have to deal with the new scenario in the best possible way.

I’m the VP of operations for a nearshore software outsourcing company. We’ve been talking with our clients in the retail industry and hearing that they’ll massively resort to technology to weather the coming storm. In fact, here are two tech-related reasons why I believe retail will change forever this year. 

1. AI will usher in the new decade.

A Juniper Research study found that investments in artificial intelligence (AI) in the retail sector are growing with each passing year, so much so that global retail spending on the technology will reach $7.3 billion annually by 2022. It’s easy to see those investments trending upward during this year as retail businesses accelerate their AI implementations to catch up with new consumer habits.

And there’s plenty of things to catch up to, especially when looking at a recent study by NTT DATA and Oxford Economics on AI and automation that found that only 10% of businesses have implemented AI at scale. Of course, executives aren’t sitting back and doing nothing. That same study found that 96% of executives have already invested or are planning to invest in AI — an obvious move. 

Why am I saying that’s obvious? Because AI has enormous potential for retailers, especially as a way to maximize revenue. Some of the examples of AI in use today point toward a significant jump in revenue for companies using algorithms in a number of ways. The key is using AI for predictive analytics and allowing retailers to offer sophisticated customized experiences both online and offline. AI can help with data analysis to better understand customers and provide the experiences retail clients are now demanding.

With the consequences of the pandemic still impacting the industry (something that will likely last for years to come), adopting AI is now a must, especially because those consequences are shifting retail in unforeseeable ways. Thus, the road to widespread adoption of AI will surely begin in 2021.

2. Data science will provide a gateway to frictionless, multichannel shopping.

Regardless of the general feeling that e-commerce is killing retail stores (a sentiment that has increased ever since the pandemic began in my view), the reality shows otherwise. That’s according to recent estimates that say e-commerce sales will account for 19.5% of all retail sales worldwide by the end of 2021. In other words, the predictions that speak of the end of physical stores don’t have any real support to them.

Reading between the lines, I think we can safely say that retailers will have to create a multichannel experience that is as frictionless as possible. Basically, this means that customers are now expecting stores to offer the same kind of shopping experience they get when they buy online — personalized, fast and seamless.

To do so, retailers have data science as their biggest ally. I’ve already mentioned how AI can help businesses leverage data to predict future behaviors and market shifts and adapt what they offer. That’s clearly the way to go when it comes to in-store experiences: using data-derived insights to make real-time decisions when facing customers in physical stores. 

That might look like this: Whenever a new client arrives, sales representatives will use real-time information coming from multiple touchpoints to offer relevant advice that improves the sales process for the customer. These representatives may have to use devices that provide them with a clear background on the client’s interests, shopping habits and history that allow them to provide better recommendations and offer hyper-personalized promotions and dynamic prices.

A step beyond all that would be to remove the sales representatives and provide an almost automatic experience that lets clients arrive at a physical store and have multiple interactive points prepared for them. Basically, this might mean having products already prepared for pick-up, but it could also include adjusting prices depending on a specific nearby client or offering self-checkout options that allow customers to pay easily and without having to wait in line for a cashier. 

2021: The Year We Meet The Future Of Retail

All of this isn’t an impossible thing to achieve. The technologies are already developed enough for retailers to adopt them. What’s more important is that customers are already expecting this kind of seamless experience, mainly because that’s what they get when shopping online.

As the year progresses, retailers will have to redefine themselves and look for a balance of online and offline shopping to provide more sophisticated instances that increase comfort for clients and profit for businesses. 


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