Like every other sector, retail saw massive operational transformations in 2021 to recover from the shocks of a global pandemic. Businesses had to rewire their modus operandi to stay afloat amidst an existential crisis. Retailers’ ability to connect with their customers is more critical than ever as consumer habits evolve. Despite large-scale changes, the industry is yet to recover completely and is still looking for ways and means to drive sales.
Agility and adaptability became the mantra in 2021 to optimize in-store operations and remodel them for future market trends. Customers today are much more knowledgeable and expect personalized services delivered right at their doorstep. Having experienced the convenience of online shopping, customers want the same experience across offline channels as well. Going forward in 2022, retailers must embrace a customer-first approach and deliver frictionless shopping experiences using tech-led retail solutions. Let’s look at some forward-looking trends that are going to shape retail businesses in 2022.
#1 Making retail smarter with artificial intelligence
The digital transformation of retail has increased speed, efficiency, and accuracy across all business processes using advanced data and predictive analytics tools. With customers expecting a high degree of personalization, AI-powered recommendation engines are gradually gaining prominence. According to a market survey, it is predicted that 77% of retailers are going to use AI in their operations by 2022.
Machine vision is also making retail more intelligent through its in-store tracking mechanisms. It tracks what customers are looking at and what they are putting in their baskets, which is then automatically billed. It relieves customers from queuing up to check out.
Furthermore, AI in retail helps create better demand forecasting using detailed customer, product, and competitor data. Finally, building AI-powered chatbots is a great way to interact, guide, and troubleshoot customer grievances.
#2 Contactless shopping experience
Increased hygiene awareness and fears of contagion mean that touchless shopping experience across the customer’s entire shopping journey is integral to retail success. While virtual retail stores are already a norm across different business verticals, contactless shopping also includes other approaches:
BOPIS: ‘Buy online pickup at store’ facility allows customers to pick up pre-selected goods at the store without having to spend time in a crowded store and queuing up. Further, it reduces physical interaction between customers.
Contactless payment: Most customers shopping offline today expect one-click payment or mobile payment models to avoid waiting at the checkout counter and speed up sales processing. Digital payment models like UPI will become an essential element in the retail mix come 2022.
Virtual try-on: Big retail brands have already adopted virtual try-on features on their website and mobile apps. It allows customers to virtually try out the look and feel of the product with call-in support from virtual sales assistants.
#3 Voice commerce
Another specialist application of AI in retail is the increased use of voice search using voice assistant devices and smart speakers. These smart home devices are increasingly used for online shopping. Around 20% of smart speaker owners use these devices to perform online shopping activities like product search, placing orders, and tracking deliveries. And as we enter 2022, more and more people will shop through voice assistants without even looking at the screen.
#4 Experience and experiential retail
We live in an experience economy, where retailers must create immersive experiences to lure customers to visit their offline or online stores. New flagship stores are being set up to entice customers by a mixture of a café, art gallery, shop, etc. Physical stores will evolve as a place of socializing; a concept rationalized as retail entertainment to drive richer customer experiences.
Experiential retail is an important trend linked to omnichannel design that will shape businesses in 2022. Interactive displays, personalized branding, and the use of AR and VR will help drive brand loyalty and engrossing shopping experiences.
#5 Supply chain transformation
Retailers are heavily dependent on an integrated supply chain to maintain inventories and fulfil the consumer demand. Supply chain transparency will be key to driving sales success in 2022. It empowers retailers to understand demand at a granular level and draw predictions about what consumers actually want. Companies will increasingly adopt blockchain technology to make supply chains transparent and give customers a view of where the products are coming from.
While some innovations still seem far-fetched, automated supply chain processes are here to stay. Furthermore, the use of IoT and RFID devices for inventory tracking and tracing will offer stakeholders access to real-time data. Combined with advanced BI analytics tools, these technologies will enable a complete understanding of the KPIs.
Wrapping up
While the last 2 years have brought immense challenges for businesses worldwide, the retail industry has found its alchemical elixir in technology to revamp its operations. Digital transformation of retail offers a deep understanding of consumer needs, a high degree of personalization, and horses for courses approach. Businesses need an integrated store ecosystem that seamlessly moves from online to offline to deliver a wholesome and immersive shopping experience. Implementing tech-enabled retail solutions might seem overwhelming, but companies that want to compete and grow in the future need to address these trends. Which of the retail trends are you looking forward to in 2022?
(By Sunil Munshi, CEO, APAC at Denave)
