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23 Sep 2022

How In-Store Technology is Transforming the Retail Industry

In-store technology in retail has completely transformed the industry. According to research, store management tech funding in 2022 YTD exceeds that of 2020 at $5.3B…

In-store technology in retail has completely transformed the industry.

According to research, store management tech funding in 2022 YTD exceeds that of 2020 at $5.3B compared to $4.1B.

With consumers increasingly turning to online shopping (a trend accelerated by COVID-19), digital-first companies are entering the territory of brick-and-mortar retailers by opening their own physical stores with both online and offline features.

If traditional retailers want to stay competitive, they must accept and embrace in-store technology to enhance the customer experience, provide access to more data on consumer preferences and behaviours, and improve omnichannel operations.

The Frictionless Store

The frictionless store has elevated itself to the new standard in retail. The aim is to match consumer expectations of flexibility, instant gratification, convenience, immersive shopping, safety, and speed, with digital technology. However, a lot of retailers aren’t eradicating all points of friction. Instead, depending on the friction points they aim to reduce, their approaches differ greatly.

The traditional retail model can benefit from the adoption of digital technologies that reduce friction. Firstly and foremost, there’s an enhanced customer experience. The modern consumer anticipates the same level of efficiency and convenience in-store as they do online. Customers will show greater loyalty to stores that can provide that experience, making them more competitive with online vendors and giving them an edge over brick-and-mortar retail competitors who can’t provide the same speed and convenience.

Artificial Intelligence

Retailers are using artificial intelligence (AI) to revolutionise in-store operations in an effort to boost customer satisfaction while lowering costs.

Thanks to AI and wider in-store technology, retailers’ understanding of their customers is massively improving. They can now collect and analyse more granular data on customer preferences and behaviour by digitising, levelling the playing field with online merchants and enabling personalised recommendations and promotions.

Physical retailers are using AI to capture what customers do in stores, such as the paths they take, the products they pick up and put back down, and even how long they pause while deciding between two products. This data is being used to improve operations such as inventory management, pricing, and physical product placement.


Retail store automation is mainly a process of utilising technology to perform specific processes that previously required manual labour. The primary motivators are cost reduction, increased productivity, and improved customer service.

Automated assistants can provide a seamless customer experience by bridging the gap between a customer’s request and a retailer’s customer service team. Warehouse robots powered by machine learning can pick, pack, and sort packages in a fraction of the time, significantly reducing company outlay on manual labour while eliminating the risk of human error. Meanwhile, drone delivery can do the same for delivery costs, allowing retailers to save money on fleet management and reinvest it in their customer offering.

When retailers use automation in-store technology, they can make better use of human capital by allowing employees to focus on higher-value tasks like customer service.

Investments in Customer Service Are Key to the In-Store Experience

55% of people actively choose not to shop online because they feel it gives them less control over their purchases.

Predictions of the death of the physical store will fail to come true due to one major factor – customer service.

Despite advances in e-commerce, consumers continue to value the in-store customer service experience. Many customers crave the human interaction that comes with in-store shopping, where they can speak directly to sales representatives and get more information and advice about products or services.

Customer support can also include a variety of technological features such as digital displays, virtual assistants, apps that enhance the in-store experience, and self-service checkouts. 42% of shoppers have noticed an improvement in customer service over the last year or so, thanks in part to advances in tech-driven customer service.

Even though consumer tastes change, the desire to be attended to while shopping remains constant. Customer service remains the foundation of the in-store experience, whether it’s an employee eager to answer a question or a digital display assisting a shopper in locating a product.

Creating Unique In-Store Experiences

Retailers are using in-store technology to create one-of-a-kind experiences. These experiences elevate the physical store to the status of a destination, giving customers a reason to return even after the widespread adoption of e-commerce. Experiential escapes have the most potential for innovation. In-store tech devices can now see, hear, speak, search, understand, and accelerate decision-making, enabling a plethora of experiential use cases.

The reality is that many retailers who once dominated their respective retail verticals have struggled or gone out of business completely in the last year or so. Retail longevity is impossible to achieve without foresight and continuous improvement.

The time has come for retail experiences to step up, especially in ways that benefit the 64% of global customers who say their lives are becoming busier. Smart technology is becoming more prevalent, artificial intelligence powers our recommendations, and automation technology is reducing the need for manual labour.

Your stores ought to reflect the demands of the younger generation of customers, who are currently driving the direction of retail. Younger consumers tailor their purchases to reflect their personal values. If your brand doesn’t radiate authenticity and recognition of the individual, most modern consumers won’t spend time at your stores.

Understanding who your customers are and what they want is the first step in providing unique and personalised experiences. By investing in in-store technology, you will align your brand with today’s shoppers and, somewhat more importantly, with the shoppers of tomorrow.

With a market like Retail Technology accelerating at such a rapid pace, there will be numerous opportunities for growth for startups and scaleups. Finding the right talent to fill roles may be difficult for some due to the specifics. That’s where Storm5 comes in handy! We take pride in working with the best candidates in the market, so please do not hesitate to contact us and our expert consultants.

We’ve helped some of the most successful RetailTech startups grow.

— now it’s your turn.