Has your life changed after pandemic became a part of our everyday vocabulary? 2 years ago, we faced one of the biggest challenges of the 21-st century — Covid-19. We didn’t know what would happen tomorrow, how we would cope with all problems, and what would happen to the global economy and business. We learned how to live and work from scratch; our businesses adjusted to the new reality. The economic sector started its recovery.

But what will the future of retail technology and the ecommerce sector look like? Will it gradually return to the pre-Covid state? Or some even more significant changes are waiting for business people in the upcoming time? In this article, we discuss the future of retail after it has faced digital transformation.

What to Be Ready for?

In 2020, the ecommerce industry and service sector were experiencing a historical decline. According to the Handbook of Statistics for 2021, world trade decreased by 7% after the start of the pandemic. Global exports fell by $1.5 trillion, marking the greatest decline in sales since 2009.

The situation in the service sector was even worse. The yearly value of global services fell by 20% in contrast to 2019. If we compare the decline of 2020 with the decline of 2009, we will see that the pandemic brought more adverse consequences to the service sector than the world crisis. This is a brief description of what the situation looked like in 2020:

future of retail technology

And then the world economy started its slow but stable recovery. By the end of 2020, the commerce industry reached its pre-crisis metrics and even exceeded them. Brick-and-mortar stores began to invest in strengthening their online presence, building ecommerce websites and mobile applications, and integrating AI technology or chatbots.

The same goes for the services trade, which in 2021 improved its metrics by 23% compared to the year before. And this is how. Restaurants started to offer delivery; coaches and trainers began to launch online courses; most industry representatives found ways to move (completely or partially) to the online dimension.

Going online and adjusting to the new circumstances opened new opportunities for businesses across the globe. They expanded their client base by reaching other countries, set a close connection with users online, implemented data analysis into their strategies for better results, and so on. People realized that there is always a bright side to the matter and started to adjust to the pandemic challenges. In fact, the ability to adjust and start getting benefits in any situation has been boosting human evolution for centuries. And the period of Covid is no exception.

Online sales of the key world economies also started to grow:

future of the retail industry

With all this happening, we may assume that the future of retail won’t be the same as we thought it to be a couple of years ago. What can we wait for, and how to prepare for the challenges and changes of tomorrow? Let’s analyze it step-by-step.

Bringing the Gap Between Offline and Online

Consumers of the retail sector won’t be ready to sacrifice the convenience of technology when they return to brick-and-mortar stores. Yes, it would be nice to return to pre-covid habits. But still, some of these habits turned out to be pointless in the background of technology potential. People realized that they wasted so much time on the tasks that can be done in a few clicks online.

This is why the future of the retail industry will combine the benefits of offline and online. It will enable clients to use technology when making purchases in real life. A great example of how this tendency will work is the application of augmented reality in commerce. Yes, we all know about the benefits of AR-powered apps that allow users to try goods before making online orders. And what if to use this technology in brick-and-mortar trade?

AR in Offline Experience

Augmented reality is becoming a part of the offline consumer experience and is adopted by progressive ecommerce businesses. One of its most effective applications is called trying before buying, which allows you to try goods online on the company’s website or app and then come to a brick-and-mortar store to make a purchase. It reduces the time spent in fitting room queues and makes customer journey more goal-oriented. Here is how AR generally works:

future of retail

One more way to apply this cutting-edge technology offline is linked to in-store stock management. By using AR, employees will hold their smartphone’s camera up to a particular shelf and detect problems. This can improve the placement of goods and zoning of the related items.

How to arrange products on a shelf properly? The answer also lies in the use of this technology. AI-based product suggestions generated on the basis of user behavior analysis may be used for this purpose. The same principle can be integrated into the analysis of offline purchases to detect product combinations frequently seen in receipts. Being aware of these data, it will be much easier for workers to organize product shelves properly, with the right item combination and order.

AI-Powered Store Management

There is nothing new in the fact that AI development is applied for better management. The future retail transformations are not going to ruin this trend. Instead, the retail of the nearest future is going to expand it. Most ecommerce businesses know how useful it is to integrate AI-powered data into the management strategy. The same can will be done in stock management.

With AI technology integrated for offline stock management, employees will be able to regulate the number of goods presented on the sales floor. Should we change the number of identical items on the shelf to increase product visibility? What product combination attracts user attention the most? The answers to these questions can be generated from AI-driven data on offline store management.

Online Predictions on the Offline Demand

At the start of the pandemic, we all witnessed how people swept products off the shelves, leaving empty spaces hereafter. While some products were in high demand, others kept being almost untouched throughout the whole period of panic. To prevent shortages, commerce businesses will rely on AI-powered demand prediction as a future retail technology.

Demand forecasting can be relevant for both offline retail and ecommerce. The greatest advantage of AI-driven analysis is its adaptiveness. That is, to get a personalized output, you only need to choose the right input data, be it offline or online mode. By using the top-notch technology broader and more often, retailers will be able to facilitate inventory management, communication, logistics, and promotion. In the background of changing client behavior, forecasting demands will allow businesses to build a more efficient and goal-focused strategy.

Moreover, predictions on demand can help reduce the inefficient consumption of goods. This is a part of green philosophy, one of the greatest digitalization trends in retail.

What Will We See in Brick-and-Mortar Stores?

When we think about a point of sale, we imagine a cash register that allows retailers to accept payments from clients and manage stock. Usually, the POS system in a physical store looks like this:

the future of retail

What’s inside such a system? The time of primitive stock management is coming to an end. Now, we see how POS (point of sale) is becoming more complex and multi-function. Let’s look at this retail technology more in-depth.

Adjusted POS Systems

As a powerful digitalization trend, the growth of POS systems enables retailers to manage their business in real-time. No need for manual updates: as soon as a customer or an employee makes an action in the system, it synchronizes data across channels.

With the rise of Covid-19, retailers were looking for any way to stay relevant and competitive. This is how many of them came to different forms of making orders. Some commerce businesses offered BOPIS (buy online and pick up in-store), others presented clients with the chance for same-day delivery, and so on. Meantime, they also ensured the functioning of their offline stores and tried to maintain the balance between offline and online.

This day, POS systems are adjusted to multichannel commerce, with the opportunity to manage stock in general and separately across channels. Suppose that you have 100 items in storage. 10 items were reserved on your ecommerce website, and 23 were sold offline. You have 67 items left. But some clients decide to cancel the reserved orders and you get 5 items back to your general quantity. How to inform the offline employees about these changes in stock? The answer is, to use a unified POS system that allows for real-time data updates for effective stock management.

Integrated Indoor Positioning

Bill Gates once said, “Your most unhappy customers are your greatest source of learning.” Indeed, by knowing what dissatisfies your store visitor, you increase the chances to convert them into a customer.

Indoor positioning is a technology that can help you reach this goal. First and foremost, indoor positioning systems (IPSs) are used for in-store navigation. Why not to use GPS? A good question. GPS technology is accurate when it comes to a location a whole. Yet, when we talk about the particular area inside the location, GPS lacks accuracy and cannot provide detailed guidance for a user.

In the Covid-19 reality, indoor positioning was examined as a way to ensure a proper level of social distancing. By tracking where a customer is, the technology could be used for measuring the distance between people and informing them if this distance is not safe enough. In post-Covid reality, IPS is integrated into a brick-and-mortar store system for better customer navigation and analytics.

If a store visitor uses your ecommerce application, indoor positioning technology can help them navigate through the sales floor in the search of a necessary item. The data gathered on the basis of client navigation can help you detect the places in your store that clients avoid. This, in turn, may point to the problem: issues with item combination, bad access to goods on shelves, unattractive part of the store interior, etc. This is how big data in retail may help you turn dissatisfied visitors into happy clients.

The use of indoor positioning systems is not limited to detecting weak spots in your store. You can use the data gathered from IPS for better product placement and effective use of high-traffic areas of your store. The latter can be applied to the placement of products on sale or special offers for higher engagement.

Is There Something New Entering the Game?

The Covid reality did not provoke completely new digitalization trends or inventions that became a success. Yet, it has taught retailers how to use the old to make the new. That is, they have learned how to implement the well-known ecommerce trends for making a difference and building a novel commerce experience. Let’s have a look at two important aspects of post-Covid retail that make the shopping process easier and more convenient.

Robotics Is Coming. But Not the Way You Expect

Both clients and retailers are sometimes afraid that robots will replace humans in business in the future. Employees will lose their jobs, while customers will be deprived of the right to human contact and communication. Although the time of robotics is close, it will be not like many people expect. Instead of taking away human jobs, robotics will only facilitate interaction, drive ecommerce automation, and ease mundane tasks. Here is how.

Robotics requires a combination of powerful AI-driven software and hardware. The results from such an investment can be revolutionary for your business. When Covid-19 came into people’s lives, the need for contactless delivery arose. Many companies, including Uber, Tortoise, and Grubhub, started to adopt autonomous delivery devices and vehicles even before the pandemic. But it also turned out to be a useful solution for a health safety problem. As for now, such tools are at the stage of testing and experiments. But as soon as they evolve, they can significantly reduce the delivery time and facilitate the order fulfillment process in general.

Doing Business by Word of Mouth

The rise of AI allowed for the improvement of NLP, or natural language processing. The technology teaches the machines to understand and process language with the aim of responding to client requests. A good example of NPL in action is the use of Alexa, Siri, and other voice assistants that are known for their actionable voice detection and recognition.

future retail

Voice commerce is gaining popularity. This digital transformation trend demonstrates how to make queries effortlessly and get instant results. By using their voice, customers can make orders, provide order information details, look for goods and stores, choose the best product combination, and so on. Still, there are data safety concerns associated with this trend. When making a request, the risks are that third-party people will hear it and use your information for fraud purposes. This is why voice commerce is not expected to replace traditional commerce and is treated as a complementary trend in future retail.

So What Is the Future of Retail?

As we describe above, the future of retail will be penetrated by technology nearly in all aspects. The process is not only linked to ecommerce; brick-and-mortar stores are also under the influence of changes. But an important thing to highlight is that technology is not going to turn the retail market upside down, completely changing people’s habits, approaches, or principles of doing business. Instead, technology is naturally integrating into the commerce industry, facilitating what is already done and slowly introducing what is new.

The future of retail will be based on effective human interaction, based on little effort and maximum pleasure. If you also want to modernize your commerce business and prepare it for the challenges of tomorrow, you can leave us your contact details, and we will get in touch with you. And if you are still wondering whether your choice of a partner is right, check the tips on how to choose an ecommerce development company.