Retail technology trends are changing more rapidly than ever before. The COVID-19 pandemic alone launched a wave of new business practices, such as contactless payment and in-store pick-up, while also pushing retailers to focus more closely on their eCommerce strategies.
For retail business owners to capitalize on the future, they must understand where these technology shifts are forecasted to go. There are three retail technology trends poised to redefine the industry over the next few years.
1. Cashless Adoption
In 2022, shoppers spent over $13 billion via cashless transactions. In fact, four in ten Americans (41%) said they do not make any of their regular purchases in cash—an 11 percentage-point jump from just four years earlier. This indicates that what may have seemed to some a temporary pandemic shift in purchase modality could in fact have real staying power in the market.
This cashless transaction trend is likely driven by technological advancements. Smartphones now enable consumers to purchase goods and services using Apple Pay, Google Pay, Venmo, and PayPal. Most modern POS and card reader systems have contactless payment capabilities that can connect to these digital payment and wallet services. If your business has not yet integrated cashless payment options, the time has come.
Cashless transactions also enhance customer experience. The technology enables a seamless checkout experience, allowing customers to cash out faster than ever before.
2. Integrated Point of Sale (POS) Systems
Today, point-of-sale systems have become an integral piece of retail technology, tracking customer behaviors, collecting data, and managing inventory. It’s all thanks to seamless integrations with other technology.
Integrated POS systems can connect multiple business processes, such as inventory management, accounting, CRM, reporting, and employee management. According to Motley Fool, data from POS systems make up as much as 51 percent of retailers’ most valuable data. Everything about your business flows through one system, allowing that data to work together to help your store run more efficiently.
Say a customer buys Item X. The POS automatically updates your inventory management to record the change. As more people buy Item X, the system may trigger automatic reorder, assuring you are restocked when customer demand surges. That same information flows into your accounting software, totaling how profitable Item X is compared to other products.
Heartland Payment Systems, an integrated POS system, helps retail business owners adapt to the changes in supply and demand. Business owners that leverage various POS assets (both hardware and software) are able to build a seamless customer experience both in-store and online. In fact, Heartland Mobile POS accepts cashless payments from anywhere on the sales floor.
These systems level up your customer relationship management (CRM) strategies. They bridge the gap between your physical and online stores; if you offer a rewards program, loyal shoppers can collect their points through either shopping modality. CRM systems also track spending data across platforms, enabling you to launch personalized campaigns based on their habits.
3. Big Data and AI Predicts Supply and Demand
Imagine if you could read your customers’ minds. You’d know exactly what they want and—more importantly—what they’re going to want. From there, you can tweak your sales floor and online shop to meet those needs and drive sales.
That isn’t all fantasy. By leveraging Big Data, retailers are able to gain valuable insights into what their customers want... when, where, why, and how they want it. While it’s not literally reading your customers’ minds, it’s pretty close. Surveys have found that 76% of shoppers expect companies to know their needs and expectations; the shift toward AI-filtered data in the retail space is somewhat the product of this demand.
Data is a retail store’s ticket to higher revenue. It encompasses everything, from what customers buy in-store to what they hover over online. It helps predict where trends are going, what items are in high demand, and how much buyers are willing to spend.
Luckily, retail business owners can rely on a plethora of available technology to collect, process, and analyze data before taking action. In fact, you can glean this data from many of the sources you already have. Things like sales records, customer databases, social media, reviews, and website traffic are bursting at the seams with actionable insights.
Big Data is all about volume. To truly leverage it, you’ll need to invest in cloud-based storage solutions that are both scalable and flexible. Such solutions will help you format, clean, and manage your data for easy access.
Once you’ve gathered data and aggregated it, you can leverage advanced AI tools to provide unique insights. Retailers can leverage machine learning algorithms to run predictive analytics on the data they’ve collected. Ideally, all this happens in real time, so you never miss a beat in a highly competitive market.
Determine which course of action you’d like to pursue and consider how Big Data will help you achieve those goals. Are you trying to optimize your supply chains? Build tailored marketing campaigns? A/B test new products and sales tactics? Big Data can help achieve all of these goals and more.
Let’s look at a handful of ways AI is already helping retailers meet their CX goals:
- Demand Forecasting
Understand what customers want, when they want it, where they’re looking for it, and how much they need. This data is critical to managing supply chains and inventory levels. AI-driven demand forecasting helps you see the peaks before they happen, to avoid over- or understocking. - Personalization
AI helps retailers recommend items to shoppers based on their past shopping history. When you buy something on Amazon, the site automatically suggests related items you may also be interested in. Not only does it help Amazon increase sales, but it also improves the overall customer experience. - Inventory Management
AI can take a significant load off your shoulders thanks to robust automated inventory management. With automated data recording, AI can tell retailers which items aren’t selling very well so they can determine whether to discontinue the product or adjust their inventory. - Feedback
AI can scan the internet for reviews and social media posts about your brand to help you better understand customer sentiment. You can respond to complaints before they get worse, while doubling down on your strengths to increase customer satisfaction.
Make Smart Business Investments with a Trusted Financial Partner
Technology is driving, and will continue to drive, the retail industry. The future is in cashless transactions, integrated POS, and Big Data analytics. To succeed, retail owners must be ready to embrace these changes—their customers certainly expect it!
Thankfully, business owners don’t have to walk the tech road alone. A financial partner like Illinois Bank & Trust, a division of HTLF Bank can help to navigate evolving trends and make better business decisions. Together, you can build an actionable plan to incorporate emerging retail technology into your already-thriving business.