The role of technology in the retail industry touches nearly every aspect of business for both e-commerce sites and brick-and-mortar stores. For example, retail inventory management software for small businesses and other IT tools help "behind-the-scenes" business operations by guiding supply chain processes using big data analytics. Digital technology in retail stores can facilitate marketing, aid in sales, and help retailers efficiently process payments.
Despite e-commerce pushing several notable brick-and-mortar stores out of business in the past decade, e-commerce currently holds only a small portion of the retail market share in Canada—but it is growing1. Technological innovation affecting the retail industry, including artificial intelligence (AI) driven by big data analytics and self-driving delivery vans, point to e-commerce taking the lead over the next several decades.
Nonetheless, a smart brick-and-mortar retail business could survive in the internet age by understanding modern retail technology and the advantages of business intelligence in the retail industry, adopting retail technology effectively to stay ahead of competitors.
Retail industry market: An overview
According to a Statistics Canada report from December 2019, retail sales decreased 1.2% to $50.9 billion in October 2019. Lower sales were reported in 8 of 11 subsectors, representing 81% of retail trade2 .
Small- and medium-sized stores could face challenges going into the next decade, including the following:
- Potential property tax increases and high rents in major metro areas. Being more selective about locations or opening smaller storefronts while strengthening the store's e-commerce presence can help keep costs down.
- Staffing. Low unemployment rates could make it harder to recruit and retain quality employees. Adopting digital kiosks and other modern technology in retail could help preserve the personalized, in-store experience by allowing customers to get their specific questions answered digitally while reducing the number of required personnel on the sales floor.
- The continued rise of e-commerce. By leveraging emerging technologies in retail, store owners could compete with online retailers.
The future of retail design: Technological trends in the retail industry
By understanding the digital trends in retail and incorporating digital technology in retail stores, retailers may enhance the customers' shopping experience and compete with growing e-commerce organizations.
- Big data analytics in retail business management. Stores have a wealth of data at their disposal. Collecting, sorting and analyzing it can help at every stage of the supply chain to reduce costs and improve efficiencies. It can also help deliver a superior, personalized customer experience.
- Retail inventory management software for small business. The best retail technology will improve supply chain processes, helping to enable cost savings and just-in-time delivery.
- Shelves embedded with sensors for more accurate inventory management. Retail inventory management for small businesses promises to change dramatically with automation. Sensors embedded in shelves can send automatic, real-time reports to buyers so they can re-stock before merchandise runs out.
- Virtual reality (VR) and augmented reality (AR) technology to enhance the in-store shopping experience. Whether it's test-driving a car or trying on a shirt the store doesn't have in stock, VR and AR retail technology could change the way people shop.
- Robotic AI assistants that deliver next-level service. Robots powered by robust AI software could help stores meet some of the staffing challenges of the next decade.
- Recommendation engines. Create a more personalized shopping experience in-store or through the customer's mobile device by harvesting big data, analyzing past behavior and using look-alike modeling to provide more relevant product recommendations.
- In-store micro moments created by leveraging digital trends in retail. The best retail technology doesn't just make predictions when a customer asks. It can create micro-moments and send recommendations or experiences to consumers' mobile devices depending on their location in the store.
Advantages of new technology in retail industry
Modern retail technology can offer several advantages to brick-and-mortar stores, helping to enable them to stand a chance against e-commerce giants. Whether you deploy retail business management software or embrace digital technology innovation to improve your in-store experience, you may see the following benefits:
- Reduce costs by creating just-in-time relationships with suppliers. By combining big data and forecasting technologies, you can shorten the time between delivery and sale to reduce costs and improve profitability.
- Better manage inventory may improve profitability. From reducing shrinkage to better estimating inventory needs, retail technology can streamline inventory management.
- Make the supply chain processes more efficient. Automation of inventory processes ultimately creates efficiency across your supply chain, helping to free up capital for business growth.
- Improve customer satisfaction. By creating a superior technology experience in your stores, you could improve customer satisfaction before, during and after the sale.
More than ever today, people don't invest in products—they support brands. When you understand the technological factors affecting retail industry and deploy the latest tools to enhance the customer experience, you'll create brand advocates passionate about your products, stores and—more importantly—the lifestyle you're selling.
Outfitting your establishment with cutting-edge technology or incorporating big data into your business processes represents a large upfront investment. Improve your cash flow or tap into additional credit with business solutions from American Express.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.