The Future of Retail 2020: Top 4 Retail Industry Trends
Matthew Shay, president of the National Retail Federation, commented on the retail industry’s achievements in 2019 and provides insights into the future of the industry in 2020 in the December 30th, 2019 episode of the NRF podcast.
He stated that 2019 was an amazing year for the industry with a lot of accomplishments. Regardless of multiple uncertainties in the political environment, such as the impact of the US-China trade war or US-Canada-Mexico relationships, retailers have found ways to become successful.
According to Mr. Shay, in 2020, the industry will keep transforming digitally and adapting to new political and economic fluctuations. At the NRF 2020 conference this year, hundreds of industry leaders will discuss retail trends. For those attending the event, we have outlined the top retail technology trends to help prepare for the big show.
Retail Technology Trends: Machine Learning
According to this survey conducted by Statista in 2019, most of the companies in the retail industry use machine learning to increase user engagement and predict customer shopping behavior.
In 2002, Target, the sixth-biggest retail company in the USA, started applying predictive analytics to segment its audience and market the right products to the right customers. The company focused on women in their second trimester because new parents tend to be long-term and loyal customers.
Thus, Target’s marketing team analyzed shopping data of female customers and determined 25 items that pregnant women usually buy during their second trimester, including prenatal vitamins, unscented lotion, and maternity clothing.
Based on this analyzed information, Target marketers started displaying ads with relevant products, along with other goods, for pregnant women. Such audience targeting helped the company significantly enhance engagement. Now, Target is using complicated ML algorithms that analyze customer data to forecast demand for a wider range of products.
Benefits of the ML Retail Trends
Amazon, Walmart, Alibaba, Costco, The North Face, and many other retail companies are using ML in their operations for a number of reasons. Some of the biggest benefits that ML can deliver are:
- Improved personalization that makes customers buy recommended products
- Dynamic, real-time optimization of the prices, which increases sales
- Enhanced facilities maintenance and in-store inventory planning
- Advancement of the website and app UI / UX based on the analysis of customer behavior
- Better audience segmentation and targeting
- Effective prevention of fraud activities regarding payments
If you’re interested in boosting your sales with a digital solution powered by ML and benefit from the above statements, Innovecs is ready to help. Our teams are experienced in creating and supporting ML retail software solutions. Their highly polished solutions will help you sell efficiently and increase profit.
Augmented Reality to Revamp the Future of Retail
Today, shopping is not only about looking through the products in stores and testing them before making a purchase. Due to augmented reality technology, shopping provides a greatly immersive experience that allows consumers to feel the product without even touching it. AR was a hot retail trend in 2019, and it is not going to lose its value in 2020.
A survey conducted by Retail Perceptions identified the most popular products people would like to shop with AR.
According to the research conducted by ABI Research, by 2022, more than 120,000 shops will be equipped with AR appliances to improve the shopping experience for customers.
First, AR will be used for simplified, in-store navigation through mobile devices. Such applications are programmed to build optimal routes based on the customer’s “to buy list” that they created.
For example, Lowe’s has its own AR navigation app called Lowe’s Vision Navigation. Customers search for necessary goods in the app, and it guides to the right location.
Secondly, AR can be used to receive detailed information about the product customers want to buy. All they have to do is point their mobile device at the product, and all its data will be displayed on the screen. Having access to extended information significantly affects decision-making towards buying the item.
Thirdly, AR is one of the retail trends that simplifies the process of trying products before paying for them. AR mirrors and fitting rooms are becoming more and more popular. For example, in 2018, Amazon created an AR mirror that allows you to see how you will look in a certain fashion item.
Benefits of AR Retail Trends
In 2020, AR technology is going to boost the industry. Not only does it create an entertaining and gamified shopping experience for your customers, but it also provides a number of benefits:
- Improved visualization of the products
- Enhanced brand awareness
- Reduced amount of returns
- Great competitive advantage
- Customizable user experience content
- Improved in-store navigation
Retail Industry Trends: Robotic Process Automation (RPA)
Robotic process automation is one of the retail trends in 2020 that continues to improve the workflow in stores and warehouses. RPA applies to a variety of retail sectors, including healthcare and pharmacy production, banking, furniture, clothing, and hardware. Here are some of the common use cases of RPA retail trends:
- Sales analytics: RPA solutions allow for generating comprehensive reports in real-time based on a number of various factors, such as product or customer data.
- Store/warehouse planning: Designing the layout of the store is more effective with PRA tools, which allow for optimal space utilization.
- Data management: With RPA, you can collect, format, standardize, and analyze data more efficiently.
- Goods categorization. If you sell various types of goods, automation tools help streamline their categorization process.
- Errors eliminations: The implementation of RPA software into your operations minimizes the number of errors that could be made by human employees.
Benefits of the PRA Retail Trends
RPA is going to improve the industry in the USA, Canada, Asia, Europe, Australia, and many other locations. Here is how your business can benefit from implementing such a solution:
- Possibility to fulfill the demand of a rapidly changing market
- A higher level of customer satisfaction due to smart product offerings
- Cost and error minimization in both stores and warehouses
- Effective marketing planning through detailed data analytics
- Accelerated in-store operations
By partnering with Innovecs, you can benefit from all of this by creating and integrating an RPA solution into your operations. For one globally-recognized company, we developed an automated solution for warehouse automation that reduced human errors and saved them money.
Omnichannel Shopping Is the Future of the Industry
It is important to find ways to satisfy all customers, including those who are used to shopping online and offline. At this point, retail and e-commerce have to co-exist. To understand the value of omnichannel retail in 2020, let’s take a look at some successful examples:
- Oasis, a famous UK retailer in the fashion sector, applies various means of connection with its customers, including a website, mobile application, and a physical store with its products. If a sales associate can’t find some fashion element in a store, they quickly make an order online through an app or a website, and the customer leaves the store satisfied.
- REI, a retailer of outdoor equipment and clothing, has a mobile application with all its products. Over 80% of their consumers use the app when making purchases in their stores to find product information. Also, if they see that the product is not available via the app, they can visit the store. Moreover, the app can guide people to the desired products within the store.
- Another great example of an omnichannel retail experience is Timberland. To connect their physical store locations, the company uses near-field communication (NFC) technology. This software solution supports data transfers via Android and Apple Pay. In stores, employees, as well as shoppers, can use tablets with NFC chips to get product information displayed on the screen.
Benefits of the Omnichannel Shopping Retail Trends
Orvis, Starbucks, VIP.com, Chipotle, and many other companies try to provide different channels of buying experience to their customers to:
- Increase customer engagement
- Boost overall sales profit
- Enhance customer support services
- Scale-out the audience
- Stay agile
Summarizing the Future of Retail in 2020
This year will be focused on the development and implementation of innovative technologies that help analyze customer data and improve decision making. Thus, the following retail trends will dominate in 2020:
- Machine learning to analyze customer behavior and make smart predictions
- Augmented reality to improve the customer shopping experience
- Robotic process automation software to eliminate human errors and cut down on related costs
- Omnichannel buying experience to seize a wider audience and satisfy customers
These are the latest technological insights. If you want to know more about the future of the retail industry, book a meeting with our expert at NRF 2020 to discuss business opportunities within emerging technologies.