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[Whitepaper] Using Retail Tech Innovation To Enhance The Customer Experience – A report by Euromonitor International

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Over the last decade, consumers have become comfortable with technologies being interwoven into the commerce experience. The growing reliance on technology became that much more apparent during the COVID-19 pandemic, as retailers and brands sought to stay connected with consumers as the spread of the virus escalated safety concerns.

In a report, published by Euromonitor International, in collaboration with the National Retail Federation (NRF), showed how digital shopper’s relationship towards technology has shifted in light of the pandemic, offering retailers and brands insight as to where they should make technological investments today and in the years ahead. The report titled, ‘Using Retail Tech Innovation to Enhance the Customer Experience’ is organised into five aspects of the retail shopping experience with the order mimicking the typical transaction flow: 

  • Online discovery
  • Online purchase 
  • In-store shopping
  • Payments 
  • Delivery and collection

Online Discovery

Being able to connect virtually with consumers on digital platforms turned the static online experience into a multisensory one, conjuring up the emotions most often associated with in-person interactions. Retailers and brands leveraged digital platforms, technologies like augmented reality (AR) and virtual reality (VR) as well as emerging content mediums like livestreaming to mimic elements of the in-person shopping experience.

From a consumer perspective, gaming remains the main avenue for exploration. Of those that have used AR / VR in the past year, 30 percent utilised it to shop for household items and furniture as well as clothes. In fact, both figures are up from the 2020 survey fielding as more consumers turned to these technologies to enhance the online experience for these more visual products.

Online Purchase

 Euromonitor International estimates that global online sales of products grew by 25 per cent in real terms in 2020, projecting that e-commerce will account for 51 percent of the retail industry’s growth globally from 2020 to 2025.

The percentage of minimal online shoppers — connected consumers who did not use digital during the research and purchase steps in the consumer journey or only used digital to shop for one category — dropped significantly from pre-pandemic levels. In turn, there was a sharp rise in the number of heavy online shoppers — those purchasing across four or five of the categories explored in this analysis.

In-store Shopping 

The report states that, although much attention over the last year has been given to the overnight boom in e-commerce and the shift away from stores, physical outlets remain a critical part of the shopping journey. While consumers are migrating towards the online channel, Euromonitor International estimates that 76 per cent of goods will still be bought in store in 2025, though down from 81 per cent in 2020.

Tech-infused experiences that reduce physical contact saw the greatest bump in consumer sentiment over the last year. More global connected consumers stated technologies like facial recognition, virtual fitting rooms and touchless checkout added more value to their in-store shopping experience than a year ago. Almost 40 per cent of connected consumers point to scan-as-you-go, smart carts and walk-in, walk-out technologies as options that would most improve their in-store experience.

Payments 

The report states that global retail professionals will continue development of digital wallets, contactless checkouts and new products like installments. Beyond that, other payment trends will continue to emerge including using blockchain for cryptocurrency, AR / VR to execute purchases and the Internet of Things (IoT) to automate purchases. All of these technologies are expected to have a greater impact on commerce five years from now. 

Almost 30 percent of retail respondents believe that IoT to automate purchases has already had an impact. Overall, they are less confident about a future where blockchain powers cryptocurrency; 37 per cent expect it will have no impact at all, compared with 7 per cent for AR / VR purchase execution and 6 per cent for IoT automation.

Delivery and Collection

Rising last-mile delivery costs and environmental concerns are forcing retailers to explore new delivery and collection methods. 51 per cent of global retail professionals viewed delivery as a key trend that impacted their market in 2020. 

Consumer electronics and appliances remains the top category for click-and-collect services, with 53 per cent of connected consumers saying they make at least some of their purchases in that manner, and 12 percent saying they make all purchases that way. Food and beverages saw the strongest growth year-over-year as consumers sought safer ways to obtain necessities like food.

Conclusion

COVID-19 transformed the economic and consumer landscape, ushering in a “new normal” almost overnight. Industry professionals expect this period to have a long-lasting impact on consumers’ social and shopping behaviour. 

While technology has been interwoven into commerce experiences in recent years, the growing reliance on technology became that much more apparent during the crisis, as retailers and brands sought to stay connected with consumers.