Consumer-centric strategies are now at the forefront of most brand and retail marketing plans, and the rise of digitalization has transformed this drastically over the last decade. Understanding what your customer wants before they do is now a necessity to stay afloat in an increasingly competitive market. Big data and machine learning now provide more accurate consumer data than ever before, and the IDC have predicted a 43% increase on technology spending by next year, with brands and businesses spend set to exceed $1.7 trillion in 2019.
But what are the latest digital transformation technologies and how can they revolutionize the retail industry?
Augmented Reality (AR)
AR has been transforming industries across the board and is set to be worth over 122 billion by 2022. The retail industry is no exception with 61% of shoppers preferring to shop at a store that offers AR, than one that doesn't. AR has given brands the platform to give their customers a fully immersive and personalized shopping experience without ever visiting a physical store. Swedish retail giant IKEA is a prime example of AR integrating seamlessly with retail marketing strategies. Customers can use IKEA Place, an AR app that has 3D renderings of over 2000 products, and simply order their desired products using the same app. Sales from AR are expected to hit $5.9 billion by 2020, compared to $1.6 billion in 2016 – the future is AR.
Digital supply chains
Supply chains are the beating heart of retail, and without them, the industry simply wouldn't exist. Gartner has forecasted that the supply chain management market will exceed $13 billion in software revenue by 2019, largely due to digitalization increasing the demand for agility and new business models. The digitalization of supply chains has allowed the likes of Amazon and Alibaba to revolutionize the retail industry, with Amazon expected to make up 50% of all US e-commerce by 2021. eBay, Amazon and Alibaba are also paving the way for wholesale businesses to have a slice of the action using their marketplace platforms, allowing them to sell directly to the consumer.
‘V-Commerce’ is the latest technology to make waves in the retail industry. Voice-activated technologies such as Google Home and Amazon’s Alexa are being increasingly utilized to purchase products, further simplifying the process for consumers. A recent study found that 57% of people that owned a virtual assistant device used it to buy a product, with the majority using the devices to buy products they had never purchased before. With nearly 20 million smart speakers in the USA alone, AI is transforming consumer behavior as we know it. People can now order their weekly shop or order their entire Christmas shopping list without even lifting a finger, and brands will need to adapt their retail marketing strategies to incorporate this shift.
For marketers, all the above technologies have the same common goals; to make purchasing products as easy and personalized as possible, and to increase sales as a result. There is no doubt that the future of retail marketing is centered around digital technologies and Deloitte access economics says that this is set to increase with online consumerism leading to a surge in data gathering technologies. The overall marketing workforce is expected to see strong growth over the next five years, and those holding a postgraduate qualification will see a significant salary increase. Digital technologies such as AI, AR and automation will continue to transform the retail industry and there is no sign of this slowing down.