Three areas of retail technology companies should be paying attention to

Day by day, week by week, and year by year, retail technology is evolving—faster, it seems, than we can keep up with it.

But the companies that are able to quickly understand retail technology and implement it as smoothly as possible, will stand out in comparison to their peers. Here are some of the retail technologies where competent implementation is ripe for the picking.

AI

Artificial intelligence has several applications across retail, but we’re going to focus on the most prominent and widespread one: generative AI, which has been popularized in recent months through applications such as ChatGPT.

Generative AI uses data to create new content like audio, text, images, and even video. Brands and tech companies that work with retailers have recently introduced generative AI capabilities to provide a more seamless customer experience.

• For example, Google recently launched a virtual try-on tool that uses generative AI to create multiple product images in different sizes and skin tones for women shopping for tops.
• The goal of the tech is to reassure shoppers they’ve purchased an item that they’re confident will fit their body type. In turn, merchants offering the tool stand to keep their return rates lower and land more conversions.

But there are many other applications: A recent McKinsey report found that 75% of generative AI’s value will come in four areas: customer operations, marketing and sales, software engineering, and R&D. Generative AI can also help with customer service, advertising, and turning natural language commands into code.

Mobile

It’s well understood that everyone is a little embarrassed by their weekly phone screen time. As e-commerce has blossomed over the past half decade, so has mobile, in-store shopping integration. But there is still more that can be done with the tech.

• While most retailers have some sort of mobile application, only 10% of retailers offer in-store features on their apps, according to a report from EKN research.
• Also, mobile commerce is expected to double its share of yearly US retail sales by 2025 to 10.4%.

As opposed to a brick-and-mortar storefront, mobile applications or websites have the capacity to bring a more personalized shopping experience to consumers. Not all mobile apps need to have the same functions, per se. Applications can simply be used to make transactions or build customer loyalty, but the key is to stay accessible to consumers—just a button click away.

• “The reality is there’s a default behavior that happens when people open up their phones, and they tend to use what’s in front of them,” eMarketer analyst Andrew Lipsman previously told Retail Brew. “As a retailer, if your app is not downloaded onto somebody’s phone at a moment when they’re opening [it up] for a shopping occasion, you’re already out of the consideration set.”

There are several other use cases for mobile as well, including virtual fitting rooms, loyalty programs, and customer service.

Robotics

Putting aside all the SkyNet jokes, robotics are an increasingly valuable asset to retailers on several fronts. Fulfillment automation is one of the most prominent areas retailers are using robots in roles where humans are not as efficient.

• For example, last year, Carhartt automated a facility outside of Columbus, Ohio, with the help of Locus Robotics. Locus’s fleet of robots deployed at the facility has automated all of Carhartt’s checking and replenishment functions, and CEO Rick Faulk said Carhartt is seeing significant productivity gains, as measured by the number of units moved per hour. Carhartt’s SKU count at the Columbus facility expanded significantly, and the company needed faster order shipments.

Changes like this are rapidly coming down the pipeline, as retailers will have robots surveying shelves, replenishing inventory, and making deliveries out of warehouses, Jonathan Morav, head of product strategy at Fabric, previously told Retail Brew.

• Plus, there are a slew of robotics firms working with companies like 7-Eleven and Uber Eats to bring lower-cost, less labor-intensive delivery options to their operations.

“In the future, there won’t be a single element of the retail ecosystem that is not impacted by the adoption of automation and robotics at some level,” Morav said. “This will ultimately extend downstream toward last-mile deliveries, where robots and autonomous vehicles will be making deliveries to end customers.”