Retail, like many other industries, has been steadily transformed by digital technology during the first two decades of the 21st century.
If your business wants to carve out a sustainable niche in the sector, it’s essential that you are in tune with the latest tech concepts and innovations shaping your target markets, particularly in fast-moving spaces like ecommerce.
Recent research has provided insights into the particular technologies having the biggest impact at the moment, from AI to voice search. With global tech spend in the retail sector expected to grow by 3.6 per cent to almost $203.6 billion this year, brands that fail to invest in beneficial technologies could find themselves racing to catch up.
The Technologies Shaping the Industry
While it has traditionally lagged behind other sectors in its appetite for change, retail is now well and truly up to speed on the importance of tech-driven evolution and digital business transformation. That is one of the key findings in the report A World in Motion, which came out of the recent Tech festival, organised by Retail Week.
The study was based on surveys of senior retail industry representatives from France, Germany, the UK and the US. The feedback underlined the pace and importance of technological change at the moment, with the vast majority of respondents agreeing that the need for digital transformation has increased in the past three years. This view was found to be more common in France (100 per cent), Germany (90 per cent) and the UK (88 per cent) than the US (75 per cent).
UK-based retail brands are showing a strong interest in visual search – when web users are specifically looking for images of products. More than four out of ten firms (45 per cent) had invested in this space, while 27 per cent were using voice search and 23 per cent were onboard with augmented/virtual reality.
Here are some other key findings from the research:
- One-third of retail businesses in the UK expect to invest between £100,000 and £500,000 in technology over the next 18 months.
- 40 per cent of US retailers are already using AI.
- Half of French retailers are deploying robotics.
- 60 per cent of German retailers are invested in voice technology.
The Impact of Tech on Marketing and Communications
How you market your products to customers and nurture relationships with your target audience is one of the key areas of business that could be continually transformed by these sorts of technologies in the coming years.
AI, for example, can add a new dimension to your customer communications by enabling chatbots on your website. It can also help you improve your understanding of target markets and demographics through automated data analytics and trend tracking.
A recent IBM study on how AI will transform the retail industry identified marketing, advertising and campaign management, and customer intelligence as two of the areas likely to feel the biggest effects of these technologies.
Mark Mathews, vice-president of research development and industry analysis at the US National Retail Federation, said: “From reducing shipping costs and improving supply chain efficiency to personalising shopping experiences and helping workers acquire new skills, AI technologies allow retailers to compete in the 21st-century economy and better serve their customers. This is what the future of retail looks like.”
Voice search is another key technology that is attracting a lot of attention and investment from retailers. One of the key considerations for brands on this front is the consequences for SEO. If more searches are being carried out by voice, have you carried out the necessary research and acquired the right expertise to ensure your content is optimised to attract this search traffic?
Focusing on the Fundamentals
It’s beyond any doubt that digital technologies and cutting-edge innovations in areas like AI and voice search have already had a huge impact on retail, and will continue to shape the industry in the years to come.
While it’s clearly important for companies to invest in keeping up with these trends, it’s also vital to retain your focus on the fundamentals of good business practice, such as maintaining a sense of humanity in your customer relationships and knowing how to communicate with specific audiences in a relevant, engaging way.
As Rowan Gormley, CEO of Majestic Wine, noted in the World in Motion report: “The fundamentals of running a business, such as marketing, pricing, product and customer service, don’t disappear because of digital – and retailers still need to have concrete plans for these areas of their operations.”
Technology can help you achieve your goals and stay at the forefront of change in the retail industry, but it’s not a replacement for human expertise, particularly when it comes to navigating the nuances and complexities of international communication.
To find out more about how Locaria can support your efforts to make real connections with audiences around the world, browse our services or give us a call on +44 (0)20 3948 6800.