The current pandemic has affected the retail industry unlike any other. It has given rise to various challenges that can only be addressed using the best of innovative approaches. Thankfully, it is such unfathomable challenges that help us push the envelope of innovation. In 2020, one such innovative use case was seen driven by MG Motor India vis-a-vis its in-store customer experience. Though the British legacy automaker accepted online bookings before the pandemic struck, it nevertheless depended on its retail dealerships for vehicle demonstrations.
However, people became anxious about man-to-man contact and the sales started dwindling, thereby falling from 3,130 in January to 1,518 units in March. Hence, the innovation. Following the lockdown, the automotive player not only introduced industry-leading on-premises sanitization practices by late-May, but even empowered its customers to visit MG dealerships and enjoy voice-guided showroom experience with ‘MG V Phy’. The home delivery of sanitized cars simply served as the cherry on the top. The result? The sales, which stood at 710 units in May, grew to 1,867 units in June and continued to increase in successions. It broke the January record by October and stood at 4,163 units in November. All of it became possible because of the automaker’s tech-driven approach and superior digital connect.
However, the scope of such retail innovations is not limited to the automotive segment. They are becoming apparent across the horizontal retail sector. So, as we look towards 2021 with high hopes and curiosity, let us also have a look at some of the top tech trends that the year is most likely to bring in the market:
Loyalty Program Accessibility via Mobile Avenues
As things stand, loyalty programs are a big hit with consumers. They comprise an attribute that most consumers look for in a retailer. It is no wonder that many deal-seeking consumers narrow down their choices of retailers based on loyalty programs offered by them. The preferred mode of delivery of the smartphone-loving generation is a mobile app or text. And, it appears that shrewd retail players are wasting no time wondering before hopping on to the mobile bandwagon – especially in the wake of COVID-19.
Today, the retail sector has witnessed the emergence of apps that can facilitate customizable experiences and product recommendations based on consumer traits, activities and locations. Take, for example, Starbucks. It has a policy of giving rewards to consumers who choose to use its app. Consumers’ benefits range from ordering and paying in-app with money or loyalty stars to receiving orders at a designated counter without the need for human interaction. Simplicity coupled with personalization at its best!
Leveraging Augmented Reality (AR) for Virtual Consumer Experience
The new generation of consumers has behaviours that differ significantly from those of the previous generations. Millennials are more excited about a user experience that involves Augmented Reality (AR). For retailers, the objective is to build immersive retail experiences that take shopping to new heights. In a nutshell, the retail industry is shifting emphasis from features-and-benefits to an immersive experience that prompts customers to ‘go for more’.
In what seems to be quite an optimistic prediction, the global market for AR in retail space is estimated to reach $1.6 billion by 2025. It simply means that there is a massive potential for Augmented Reality in the retail market, and players must lay priority on the adoption of AR-powered technologies. At present, 61% of consumers prefer retail brands that offer some AR feature as part of their consumer service. Today, brands like Lacoste have integrated AR into their mobile apps so that potential customers can try their shoes virtually. Such AR-enabled services also entail window displays, in-store signage, as well as promotional postcards.
This new transactional model has been the solution for many beleaguered industries from the start of the pandemic to this point. However, when one takes into accounts the present dynamics and that of the foreseeable future, there is every certainty that contactless interactions will be the new normal even in the post-pandemic world. For now, coronavirus is here to stay till we find the cure, and the only way to co-exist with it and continue everyday life is through a safe, contactless experience. Various retail players and fintech companies are working towards achieving the same through multiple technologies.
Although contactless payments have comprised a minority of transactions in the past, the COVID-19-induced pandemic has driven consumers to their mass adoption. Popular brands and retail chains have already adopted contactless payment options and so have the others. In fact, digital payments in India now stand at Rs. 2,153 trillion, which is approx. 961% of our GDP, and will become worth Rs. 7,092 trillion by FY2025 with a five-fold growth in mobile payments. It only makes more sense for the retail players to follow this trend rather than bucking the same.
Complete Digitization of Stores
By 2020, much of the data and analytics that transform e-commerce sites will also find utility across physical stores by keeping track of consumers’ shopping activities. This transformation means that the Internet of Things (IoT) will be a workhorse technology for the in-store shopping experience, with broad applications encompassing store aisles as well as operations. The information added to the existing data lakes will help retailers to predict and anticipate new consumer trends and demands with greater accuracy, thereby serving their customers better.
As things stand, Amazon Go is set to take sensors to a new height by introducing staff-free brick-and-mortar storefronts. It envisions equipping its convenience stores with sensors that can identify pre-registered, regular customers along with the items they select and automate the whole process by charging their accounts. To that end, some of the technologies that can streamline this automated consumer experience manifest in the form of machine learning that can identify specific items, and high-resolution cameras that include image recognition.
Players that continue to dominate the retail ecosystem, even against the backdrop of a global pandemic, are those that reinvent themselves by ramping up their physical stores and supply chains. The objective of it all is to connect with the new-age consumers who are highly digital and tech-savvy. Therefore, the retail space is going to be a dynamic realm in the days to come, and brands that invest in technologies will emerge as the top players of the retail ecosystem.
By Anil Kaul, Co-Founder and CEO, Absolutdata