Jan 06, 2021To say that COVID-19 has been disruptive to the retail sector would be an understatement, but the ongoing pandemic is far from the only factor contributing to a significant shift in retail technology trends dictating how store owners and operators are now approaching shopping experiences. As the pandemic rages through the heart of this year's holiday shopping season, smart retail technology is firmly in the spotlight and can be instrumental in helping small retailers up to big-box chains meet customer needs.
Amazon's Prime Day in October kicked off the 2020 holiday shopping season with a massive 60 percent year-over-year increase in online sales, underscoring just how heavily consumers and retailers alike are depending on smart, connected technologies to transact. Deloitte has forecast that—despite hardships brought on by a struggling economy and job losses—holiday retail sales are still expected to rise up to 1.5 percent, and online shopping will see huge growth of up to 35 percent, totaling nearly $200 billion in holiday sales. The majority of this year's holiday retail transactions are made possible because of smart retail technologies.
We work with a number of the world's largest retailers to design and implement smart retail technology, and we see five clear trends emerging. I'll share each of these trends, but it's important to first understand what's driving them. Obviously, consumers are shopping online more due to the ongoing pandemic. Second, those who are shopping in brick-and-mortar stores want to do so safely, meaning minimal time spent shopping indoors and minimal physical contact. The same goes for store management and personnel, who are also focused on safety and efficiency for everyone inside a store. These drivers are having a profound impact, requiring retailers to develop and deploy omnichannel retail strategies which effectively merge online and offline shopping.
With the pandemic as an accelerator, consumers have come to expect more from their shopping experiences than the traditional transactional shopping we've done with retail brands. Above all, we want our shopping experiences to be personalized and useful across the devices and channels with which we're familiar. We want retail brands to meet us where we are, and increasingly, that's on our wireless Internet of Things (IoT) devices like smartphones, tablets and voice assistants. Emerging retail technology trends include everything from real-time information being made available to consumers about the products they're browsing, to utilizing data to predict preferences, to connected experiences being key to desirable shopping experiences.
Taken together, smart retail technology implementations can pay dividends in logistics, manufacturing, and even how products are marketed and promoted across channels. Here are the five retail trends that will have a big impact on the future of the retail industry for brands and consumers alike.
The Rise of Asset Tracking
According to Gartner, 65 percent of enterprises will require indoor location asset tracking by 2022. There are numerous advantages to asset tracking, from driving business results to improving customer satisfaction. First, more visibility into and control of the supply chain enables more efficient manufacturing, shipping and transportation. A well-designed tracking strategy can also identify production issues and help managers make more informed purchasing decisions. But asset tracking is complex. If you don't know what you have or if you can't find it, you can't make informed decisions.
For large retailers, this might mean tracking thousands, if not hundreds of thousands of individual items. Doing this manually is rife with errors and incredibly time-consuming. But a smart asset-tracking strategy that utilizes commercially available low-cost, low-power products can dramatically reduce the costs associated with asset tracking with huge value-add. The advent of Bluetooth direction finding now makes it possible to locate and track all kinds of assets, from pallets of appliances down to a small box of jewelry.
Using Bluetooth, developers can bring small, affordable and energy-efficient products to market that enable device direction and achieve sub-meter location accuracy. One of the best Bluetooth Low Energy (BLE) asset-tracking technologies we've seen is Quuppa's Intelligent Location System, a highly accurate yet low-cost and low-power indoor asset-tracking solution. Intelligent Location System uses advanced angle-of-arrival (AoA) technology capable of tracking products, equipment and people with sub-one-meter accuracy, making this technology compelling for so many use cases.
Mass Adoption of Electronic Shelf Labels
Electronic shelf labels (ESLs) are another area in which technology can add bottom-line value, as well as enable a more safe and desirable shopping experience. According to TimeTrade, 87 percent of retailers say creating a seamless customer experience across all channels is the most important element of their company's omnichannel strategy. This is especially true in stores where frequent price changes have traditionally been carried out by store employees manually updating pricing information. The instant pricing updates made possible by ESLs mean far less contact with inventory, which helps to prevent the spread of bacteria and potential viruses.
Grocery stores are realizing big efficiency gains in this area as produce pricing changes with the season, but fashion brands are also getting in on the action by using ESLs to provide shoppers with detailed merchandise information. Clothing retailers are actually at the forefront of pioneering the omnichannel buying experience and see a lot of potential in coordinating the product information that's available to consumers online with real-time, in-store browsing.
Strengthening Security Where People Shop: On Their Edge Devices
Protecting business and consumer data in a connected retail environment is a necessity. The rise of online shopping through IoT edge devices like smartphones, voice assistants, watches and even connected appliances has caught the attention of hackers, who have increased the scope and complexity of attacks on IoT devices as they proliferate. Retailers must ensure their customers' data remains private and secure, because once trust is broken it is very difficult to rebuild. And with hackers increasingly probing for hardware and software vulnerabilities in our wireless devices, new IoT-specific hardware and software security solutions are a must.
Compelling new IoT-specific security solutions are now making their way into the marketplace, with features like physically unclonable function (PUF) hardware technology to protect in-store and online transactions. In addition to mounting security threats, government regulators are taking steps on behalf of consumers to protect data and privacy. Retailers will need to be in compliance with these regulations. The United States and European Union have already begun implementing policies designed to protect consumer privacy and security, with more regulation expected in the future.
New, Pleasantly Surprising In-Store Experiences
In order to attract more shoppers to physical stores, retailers are making a renewed effort to create compelling in-store experiences. One new and surprising way in which retailers are creating better in-store experiences for shoppers and staff alike is through a very unlikely source: loss-prevention tags.
According to the National Association for Shoplifting Prevention, shoplifting accounts for nearly $50 billion in retail crime every year in the United States, and almost $100 billion globally. While loss-prevention tags continue to be necessary, technology is teaching this old dog a number of new tricks. Old-school anti-tamper tags tend to malfunction frequently. Most of us have had the experience of paying for an item, yet the tired, old loss-prevention tag still sets an alarm off as we attempt to leave the store. Yes, it's annoying. But there's hope on the horizon by way of a new generation of tags.
Innovations in size, weight and power consumption now make it convenient, durable and cost-effective for manufacturers to combine quite a bit of functionality into small, yet feature-rich loss-prevention tags. These new tags bring excellent connectivity and data management to a form factor that can double as an asset tracker and more. An exciting example of this comes from Zliide, which has created state-of-the-art loss-prevention tags that not only keep merchandise secure and help store personnel focus on service, but also deliver value-add for shoppers.
Zliide's Security Tag enables self-checkout, digital promotions and receipts, and can transmit audiovisual product information to shoppers' phone screens. The data collection these new wireless tags are capable of also give retailers valuable insights into their customers, providing store-by-store insights that can be used to better tailor specific store locations to their local customers preferences.
Interoperability: Smart Retail Technology Must Work Together Seamlessly
Finally, in order for retailers and consumers alike to realize the benefits of smart retail solutions, those technologies must be able to work with one another, and do so seamlessly. The retailers who get this right—those that adopt a comprehensive omnichannel tech stack and experience—are the retailers that will win.
As retailers begin to deploy more smart retail asset tracking, ESLs, edge security and loss-prevention solutions, the key to success will be ensuring that all of these smart retail technologies work together in harmony. Several retailers have already demonstrated that this can be done effectively. Examples include Amazon's cashier-less GO convenience stores, Walmart's Intelligent Retail Lab and Walmart+ efforts, and 7-Eleven's cashier-less store pilot. These retailers are the ones to watch, and others that effectively deploy omnichannel approaches featuring seamless smart retail technology implementations will achieve the greatest success in the years ahead.
Ross Sabolcik is the VP and general manager of industrial and commercial IoT products at Silicon Labs. For more information about these and other smart retail trends, read "What's New in Smart Retail," in which Silicon Labs examines some of the most compelling solutions offered today by the leading smart retail technology innovators.
