2020 marked a monumental shift in consumer behavior, with the retail industry particularly affected by the global spread of COVID-19. Between nationwide quarantines and the looming threat of disease, retailers had to adapt quickly to survive the forced seclusion and distancing. While some have been building their e-commerce brands and marketplaces for years, others were less prepared and were left to either sink or swim.
To meet the new challenges facing the retail industry, businesses are now looking to disruptive technologies and innovations in the race to claim a piece of consumers’ hearts, and wallets. As eloquently put by Albert Einstein: “In the midst of every crisis, lies great opportunity.”
Following are some of the rising trends we can expect see:
Augmented Reality and Image Recognition
AR and body measurement based on image recognition are not new technologies. However, the past year has made these technologies staples for more than just clothing and apparel lines that allow consumers to obtain precise measurements and even simulate clothing on their bodies from the comfort of their own homes. Interior designers and furniture shops are utilizing these technologies as well. They are making placement simulations much more accessible while also giving consumers the confidence their products are the perfect fit.
With business hours extending to round-the-clock services in online spaces, there is a growing need for reliable customer service and support. While it would seem a human interaction is irreplaceable, great strides have been made in creating efficient chat-bots powered by AI that can solve rudimentary problems without a guiding human hand. We can expect these bots to become more intelligent and address complex inquires as AI becomes more advanced.
We cannot discuss AI improvements without also addressing adverts and consumer recommendations. AI is taking a prominent role in tailor-making product recommendations and targeting specific consumers based on behavioral analytics. This is greatly improving the chances to complete a purchase, even for products consumers did not previously consider acquiring.
Even with the move to the virtual world, retailers still need to properly manage their inventories and internal operations in the physical one. Technological advances in machine learning and analytics can assist retailers’ management of their own businesses, and allow them to optimize as necessary. These systems can analyze individual staff performances, track sales, and provide information on supply chain deliveries. With proficient AI, these systems can even automatically replenish missing inventory.
Cloud and Data Center Infrastructure
Heavier internet traffic can be strenuous on cloud databases and data centers. This means cloud and database providers are constantly upgrading and perfecting their infrastructures. Retailers, meanwhile, will be looking for reliable services able to support their growing online needs. Some of the biggest acquisitions of Israeli tech made in 2020 had to do with data center and cloud technologies. This includes the USD 7 billion purchase of Mellanox by Nvidia.
The rise in online transactions also means an influx in fraud, data theft, and security breaches. Consumers will only shop where they feel safe. Thus, retailers have to be on the cutting-edge of security technologies or risk losing the trust, and wallets, of their customers.
Expect to see more technologies dealing with protection from ransomeware attacks, as well as better AI. There will also be a growing need for expertise in cybersecurity IT advisors.
Notable data security acquisitions in 2020 included Checkmarx, which analyzes technological security flaws, and Armis, which addresses the threats from connectivity of IoT devices. (Each were sold for over USD 1 billion.)