What is RetailTech?
RetailTech refers to the digital technologies and innovations used by brick-and-mortar retailers and e-commerce platforms in their in-store and supply chain operations. It’s at the heart of the retail industry’s digital transition. Automation, the Internet of Things (IoT), and Artificial Intelligence (AI) are frequently used in retail technology platforms.
Retailers choose their technology solutions based on the goals they wish to achieve. It could include things like increasing profits, improving customer service, and boosting conversion rates.
Since its inception in the late 1800s, the retail industry has continued to influence consumer expectations through the deployment of cutting-edge technologies. No other industry has seen such drastic shifts in consumer behaviour. From the first cash register and bank-issued credit cards in the 1950s to autonomous checkout options, the industry continues to evolve and innovate.
The RetailTech industry has evolved due to numerous factors including:
- COVID-19 accelerated the adoption of retail technology and boosted the growth of e-commerce as consumer behaviour changed dramatically due to the lack of physical and sensory shopping experiences, forcing retailers to change both in-store and online channels to provide a seamless customer experience.
- Investment in new technology, such as extended reality and artificial intelligence, has aided retailers in their digital transition.
- An increase in funding for RetailTech and E-commerce businesses as the industry grows in response to customer demand.
Gartner reports that by 2023, retailers will spend $268 billion on technological services and products. Customer opinion is a major driving force for retailers to adopt new technology. As consumer preferences shift, retailers will invest in new technologies to keep up with changing demands.
Subsectors of RetailTech
RetailTech can be separated into several areas. Most RetailTech companies fall under more than one subsector, which can be further divided into even smaller categories. The following are some of the most important RetailTech subsectors:
- Instore (operations and analytics)
- Supply Chain and logistics tech
- Robotic fulfilment
- Last Mile Delivery
- Cashier-less Checkout
- Loyalty and Rewards Tech
eCommerce, also known as electronic commerce or internet commerce, is the purchasing and selling of goods and services through the internet, as well as the financial and data transfers required to complete these transactions.
E-commerce is frequently used to refer to the online sale of real goods, but it can also refer to any type of economic transaction that is made possible by the internet. Major players disrupting the market include the likes of Amazon, Shopify and Alibaba.
Instore (operations and analytics)
For brick-and-mortar retailers, the ‘frictionless’ store has become the new big thing. However, the title is a little misleading. The goal is to employ digital technology to match consumer expectations for convenience, immersive shopping, safety and speed. Retailers can collect and analayze more data on consumer preferences and behaviour as a result of digitization, levelling the playing field with online merchants and enabling personalised recommendations and promotions.
Disruptive tech can include the likes of “just walk out” technology, immersive extended reality experiences and the Internet of Things.
Mercaux assists retailers in transforming their stores from a simple sales channel to a multi-purpose experience with all of their products seamlessly integrated as a “Digital Lego” Platform. For instance, their Digital Fitting Room allows customers to simplify operations between the fitting room, shop floor, and stock room, empowering them to engage with in-store store content while also boosting the customer experience by allowing them to self-serve.
Supply Chain and logistics tech
Supply chain and logistics technology entails effectively controlling the flow of materials and services from their origins in raw materials to their final destination at the point of consumption. It is a necessary component of most businesses’ profitability and customers satisfaction.
Customers, both individuals and businesses, exert a lot of pressure, asking that their products or services arrive faster and cheaper than ever before. Artificial and augmented intelligence, advanced analytics, and automation, to mention a few, have all experienced significant advancement in the logistics sector in recent years at a tremendous speed.
GXO Logistics, Inc. is the largest pure-play contract logistics provider in the world. With technologically advanced and customized supply chain and e-commerce solutions, the company tackles challenging logistics problems at scale and speed.
Robotic fulfilment is a subsector of supply chain and logistics tech. It refers to the use of robots to accelerate the delivery of products for certain tasks, such as moving shelves closer to staff to reduce order pickup time.
While robotics has been involved in fulfilment to some extent for decades, new developments are always being made. Some examples are:
- Automated Guided Vehicles using sensors and metallic strips as guides to transport large items across warehouses and fulfilment centres
- Drones to collect data from the air to speed up cycle counts and pinpoint inventory locations
- Autonomous mobile robots alongside human personnel for picking, packing and sorting products
Fabric is a significant disruptor in the sector. In urban areas, the company uses robotics for micro-fulfilment. It can either integrate its system into its retailer partners’ current storefronts or real estate, or it can fulfil orders from its own micro warehouses.
Last Mile Delivery
Last Mile delivery is the final and most essential stage of the delivery process. It’s when a parcel is transferred from a transportation hub to its final destination. This is usually a retail store or a customer’s home. The purpose of last-mile delivery logistics is to transport goods to their destinations as inexpensively, quickly, and accurately as possible.
Rapid delivery / q-commerce is a subsector of last mile delivery that is shaking things up. Q-commerce combines the advantages of traditional e-commerce with last-mile delivery advancements. The principle is largely the same, with the important difference being the speed of delivery. To be competitive, delivery is measured in minutes with a goal of 30 or less. Many companies are disrupting the market with the likes of Gorillas, Instacart and Getir to name a few.
The definition is quite literally in the name. Cashier-less checkout, also referred to as autonomous checkout, is where customers can select items that are automatically tracked as they travel about the store using cameras and shelf-weighted sensors. When finished with shopping, they can leave the store without scanning or dealing with the cashier. The payment is processed automatically by the time customers leave.
Amazon Go popularised the technology, and companies like Standard AI and Mishipay have since made waves in the market.
Loyalty and Rewards Tech
Loyalty technology platforms do exactly what the title suggests: they provide retailers with the software as a service (SaaS) technology platforms they need to manage their loyalty programmes.
These businesses recognize how difficult it is to identify and influence retailers’ most important customers. As a result, they provide a variety of tailored technological, marketing, and analysis services to assist retailers in better understanding their customers.
Thanks to the ongoing advancement of technology, customer loyalty programmes of all kinds are more accessible than they’ve ever been, from digital loyalty marketing platforms to custom-branded loyalty apps and mobile wallets.
Starbucks is an example of a company that is getting it right. Starbucks Rewards, their digital loyalty marketing platform, was established alongside their app. Users can load money or gift cards directly into the Starbucks Rewards app, which can then be utilised with a simple QR code scan at the register or for mobile ordering ahead of time.
What’s next for RetailTech?
As new markets and subsectors emerge every day, the market will continue to expand. There have been significant investments in robotics, rapid delivery, and last-mile delivery as a result of supply chain and logistics innovation alone. This trend will continue in other RetailTech sectors.
Many retailers’ top priority right now is to invest in their omnichannel strategy, ensuring that both their brick-and-mortar locations and their e-commerce platforms provide customers with an engaging and seamless experience.
RetailTech is a fast-paced market that is constantly changing. As a specialist recruitment agency, Storm5 has a strong team of experts who are trained and equipped to locate the perfect candidate for an emerging RetailTech firm’s success in this ever-evolving retail landscape. Get in touch with us if you’d like to learn more!