From blockchain to drones, Retail Week takes a look at the technology that is set to revolutionise how consumers shop and retailers operate in 2018.
Robots on the doorstep
Shopper expectations have never been higher, and guaranteeing customer satisfaction in the final mile is crucial for retailers.
The demand for quick and seamless delivery has been a stumbling block for even the most seasoned of online retailers – in Ocado’s latest financial update, the grocery etailer conceded that its sales growth had been hampered by a lack of available delivery drivers.
“Ground drones delivering shopping to customers in city centres will become more and more common”
Andrew Busby, Retail Reflections
Online deliveries carried out by ground drones will be one way retailers will tackle this issue in 2018, according to Retail Reflections founder and chief executive Andrew Busby.
“Retailers are operating in an on-demand economy and consumer expectations will continue to escalate to the point where they will want something delivered to wherever they are within an hour of having ordered it,” he says.
“Because consumer expectation is so high, automating the final mile will be the only way to deliver to this expectation.”
Amazon completed its first drone delivery by air for a UK customer last December, but Busby thinks this method is a way off becoming mainstream for most retailers.
“Ground drones delivering shopping to customers in city centres will become more and more common,” he predicts, adding that shoppers will be “happy” to pay a premium for that kind of service.
Retailers have been ramping up their online personalisation strategies for the past few years, but many are now examining how to create a similar experience in their stores.
Green Man Gaming chief executive Paul Sulyok says: “An app that tracks your in-store location and gives you notifications when you are in a certain position would be a win-win for retailers and shoppers.”
Graze chief technology officer Mark Wood thinks these in-store physical trackers could become more prevalent next year.
“There are interesting implications with current in-store tracking technology that enables you to better understand why shoppers shop”
Mark Wood, Graze
“There are interesting implications with current in-store tracking technology that enables you to better understand why shoppers shop – it could help you understand statistically how shoppers moved around your store, where they did and didn’t go, and rejig store layouts accordingly.”
Facebook is also reportedly developing facial-recognition technology that will enable cameras in high street stores to identify shoppers and target them with offers or products based on their social media profile.
However, Wood believes shoppers and technology giants alike will need to be sure that any capabilities they do deploy in-store are GDPR-compliant.
“Up until now it’s been a bit of a wild west and you can do what you like with the data you’ve collected, but now that proper fines are going to be in place that’s going to have to change,” he says.
Whatever the future of in-store shopping looks like, it’s clear that retailers are looking to apply the same personalisation capabilities they have online to bricks-and-mortar too.
Augmented reality (AR) has by and large been a retail gimmick in recent years, bar successful roll-outs by beauty retailers such as Charlotte Tilbury.
However, with the emergence of AR development kits from Google and Apple earlier this year, Isobar head of insight Alex Hamilton believes this is set to change.
“This technology has already been used in Ikea and Burberry’s mobile apps in a way that takes AR away from being a gimmick in a shop to something integral in the mobile shopping experience,” he says.
“2018 will be the tipping point for augmented reality – it’ll be the year it goes from being a ‘nice to have’ to a mainstream tool in retailers’ mobile apps”
Alex Hamilton, Isobar
Ikea’s leader of digital transformation Michael Valdsgaard said of its new mobile app: “This will be the first augmented reality app that will enable you to make buying decisions. When we launch new products in the future, they will first appear in the AR app.”
The AR tool kits from Apple and Google were introduced earlier this year, and make this immersive visual technology technology more accessible to retailers and shoppers alike.
“2018 will be the tipping point for augmented reality – it’ll be the year it goes from being a ‘nice to have’ to a mainstream tool in retailers’ mobile apps,” asserts Hamilton.
Although it is early days for voice-enabled online ordering, it is clear this technology has the potential to significantly disrupt how customers shop in 2018 and beyond.
“What is the user interface that comes after the smartphone? Every major operator in that space, from Apple to Google to Microsoft and Amazon, are betting on voice,” says Hamilton.
“I think in five or six years’ time the whole idea of typing on a screen is going to seem quite arbitrary and outdated, so retailers need to start thinking now about what that means for them.”
“Voice could change how customers interact with retailers”
Jon Rudoe, Shop Direct
Retailers including Tesco and Walmart have tied up with Google to integrate voice-ordering capabilities into their existing online shopping propositions.
Tesco Labs head of technology Paul Wilkinson said at Retail Week’s Tech. conference earlier this year that there was “a lot of opportunity” for the grocer to deploy voice search tech in-store.
Amazon, which is one of the front-runners in voice technology, recently brought its Echo Show device to UK shoppers.
The voice-activated, AI-powered device includes a screen that has a range of features including video streaming, shopping lists and weather forecasts.
Shop Direct’s retail, technology and data director Jon Rudoe says: “Voice could change how customers interact with retailers and while it’s still early days, the commercial success of the likes of Google Home suggest it’ll continue to develop in 2018.
“Checking account balances or the status of returns, for example, are simple queries that our customers ask and could work well on voice.”
The supply chain technology, which enables retailers to track their products via a secure and encrypted ledger, has already been employed by etail giant Alibaba.
But so far the technology has mainly been discussed regarding its impact on grocery.
While high amounts of international shipping that need to adhere to best-before dates does make a supermarket an obvious candidate for blockchain technology deployment, it could also have implications for other sectors.
Fashion retailers could be a prime candidate for blockchain technology, for example, as they seek a greater level of supply chain transparency so as to increase consumer trust.
“Blockchain is super-interesting because, from a fashion perspective, it means you can see an item’s complete journey – from warehouse to distribution centre to store,” says Hamilton.
“If you are able to offer total transparency then it will give fashion brands and retailers a lot more collateral to run marketing campaigns around supply chain and sustainability and differentiate themselves from their rivals.
“More and more shoppers are invested in the history and heritage of an item they buy, so particularly for luxury retailers, using blockchain could allow them to communicate a message that will really resonate.”
Shopper expectations continue to evolve – and while there are plenty of big bets to be taken, the retailers that use technology to balance efficiency with exceptional shopping experiences look set to win in 2018.