Deploying the right digital technologies is essential for retailers to differentiate themselves and survive, GlobalData has claimed.
According to the analytics company’s Technology Trends in Retail, 2018 report retailers can use various digital solutions to deliver a more personalised shopping experience to its customers.
Suggestions included artificial intelligence (AI) for customer service, analytics and smart supply chain management, as well as interactive tools based on augmented reality and the latest digital payment methods.
However, GlobalData claimed that improving last-mile delivery is another major challenge for retailers this year, with consumers demanding shorter delivery windows and innovative approaches.
“Personalisation can drive customer loyalty and the ability to collect more data about their behaviour and preferences,” said Andreas Olah, lead analyst for digital retail at GlobalData. “By establishing what customers are likely to be interested in through the latest analytics and AI technologies, retailers can up-sell more products and avoid going out of fashion.”
GlobalData predicts that as shopping habits change and digital technologies advance, customer service will become more automated through AI and robotics, combined with augmented reality experiences and new retail store formats will evolve further in the next few years.
However, the company claimed that retailers are already starting to embrace digital payment technologies, which include digital wallets, mobile readers, integrated apps such as WeChat, as well as Blockchain to provide a seamless omni-channel experience to customers.
Mr Olah added: “Instead of jumping on every trend bandwagon, retailers need to be judicious while selecting digital technologies, which should match customers’ specific needs and the retailer’s brand identity to address existing problems and challenges. In addition, customers should be allowed to choose their preferred channels of shopping and interaction rather than forcing them to use certain digital tools.”
However, research from digital agency Visualsoft found that retailers were missing out sales opportunities because of a lack of investment in multichannel technology.
It claimed that while 98 per cent of retailers have a website there is a shortfall in the number of businesses supporting this with other sales channels and potentially losing out on millions in revenue.
Despite four out of five shoppers using a retailer’s mobile app, only half (51 per cent) have invested in this technology, Visualsoft said. App conversion rates are also three to four times higher than mobile sites alone, it added.
It also argued that 61 per cent of retailers are neglecting to use marketplaces such as Amazon or eBay to reach a wider audience. The latest figures show that eBay counts an audience of 170 million shoppers, while Amazon continues to dominate online retail on a global scale.
Chris Fletcher, Visualsoft’s head of onboarding, said: “Despite huge growth opportunities for retailers that use multichannel technology, more than half of the UK’s leading brands are failing to invest in these invaluable platforms – a worryingly large figure.
“We know that consumer behaviour is changing, with an increasing number of customers starting their purchase journey on Amazon and eBay. Our data shows that mobile devices account for over half of online transactions in the UK, so making it as easy as possible for customers to shop in this way is more important than ever.
“Retailers need to ensure they maximise sales by making the most of all available marketing tools. This could be particularly important with Easter just around the corner and future spending holidays in the retail calendar on the horizon throughout 2018.”
Retailers are already adopting a number of Internet of Things (IoT) devices in-store to connect with customers and collect data.
However, with these devices being connected via open networks, they are becoming increasingly vulnerable to cyber-attacks, with GlobalData foreseeing that cyber-security and data protection capabilities becoming key differentiators for technology solutions in 2018.
Mr Olah concluded: “Supply chain management systems are expected to get upgraded, with the addition of greater automation and predictive analytics, which is also increasingly powered by artificial intelligence and machine learning capabilities.”