Analytics, AI/ML

How Technology Will Revolutionize Retail

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The onset of the pandemic at a global scale has accelerated the use of technology in the retail space, an industry facing challenges on many fronts. The focus on online retail has increased sharply, with $3 in every $10 spent by consumers taking place online. What are the current challenges retail organizations face in the adoption of technology, and how will technology shape the future of retail? 

For most traditional companies, P&L is the primary focus of the business; how the company performs in the short term is more important than long-term growth potential. This is especially true for retail players. Investment in technology may not give an immediate ROI, making it difficult for many retailers to evolve. A UK-based bank did not buy a credit scoring start-up when it was available for $250 Mn, only because no incremental cash flow was expected immediately. But a few years down the line, the bank spent much more to use similar services.

Another challenge that most legacy retailers are facing comes in the face of internal data availability and processing capability. According to Mckinsey experts, most organizations are not even 80% close to knowing what data they've got. Adding to this is the availability or even appetite to look out for external data. Further, many organizations are not investing in hiring data scientists and analysts who can scour such data and develop insights to help boost technological advancements.

Companies That Are Doing It Right

While some companies struggle to implement technology in their retail businesses, a few are doing exemplary work. IKEA realized that its big-ticket items are analyzed by consumers a lot before making a purchase decision. Hence, the company ventured into AR recently. It acquired Geomagical Labs, a tech company that helped them develop an app allowing the customer to point their phone at any portion of the room and then overlay IKEA furniture from the catalog, recolor it, position it, and even switch it around. This made the shopping experience very easy (and rather fun) for the consumer. Being a category creator and innovation leader, Apple will soon launch XR glasses, which will help its mobile users get an optical see-through AR experience.

What The Future Holds

Retail companies must ride on the technology bandwagon and start to focus on long-term potential. Experts are projecting some trends that will play a significant role in shaping the retail space. Virtual assistants are likely to become big couples with chatbots. Digitally enhanced shopping baskets, robot-servicing, and holograms will be other technologies that will continue to see advancements in the retail space. However, for these technologies, retail players need to have a good amount of data that they can leverage to provide a more personalized experience to customers.

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